goldf3q15_6k.htm - Generated by SEC Publisher for SEC Filing
 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

 
FORM 6-K
 
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
 
For the month of November, 2015
(Commission File No. 001-32221) ,
 

 
GOL LINHAS AÉREAS INTELIGENTES S.A.
(Exact name of registrant as specified in its charter)
 
GOL INTELLIGENT AIRLINES INC.
(Translation of Registrant's name into English)
 


 
Praça Comandante Linneu Gomes, Portaria 3, Prédio 24
Jd. Aeroporto 
04630-000 São Paulo, São Paulo
Federative Republic of Brazil
(Address of Regristrant's principal executive offices)

 


Indicate by check mark whether the registrant files or will file
annual reports under cover Form 20-F or Form 40-F.

Form 20-F ___X___ Form 40-F ______

Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under
the Securities Exchange Act of 1934.

Yes ______ No ___X___

If "Yes" is marked, indicated below the file number assigned to the
registrant in connection with Rule 12g3-2(b):

 

 

 

 

Individual and Consolidated

Interim Financial Information - ITR

 

GOL Linhas Aéreas Inteligentes S.A.

 

September 30, 2015

and Report on Review of Interim Financial Information

 

 


 

 

 

GOL Linhas Aéreas Inteligentes S.A.

 

Individual and Consolidated Interim Financial Information - ITR

September 30, 2015

 

 

 

Contents

 
Performance report  01 
Audit committee statement  06 
Directors' statement on the interim financial information  07 
Directors' statement on the auditor’s report on review of interim financial information  08 
Independent auditor’s report on the interim financial information  09 
Capital  11 
 
Individual interim financial information – ITR for the period ended September 30, 2015   
 
Statements of financial position  12 
Statements of operations  14 
Statements of comprehensive loss  15 
Statements of cash flows  16 
Statements of changes in equity  17 
Statements of value added  19 
 
Consolidated interim financial information - ITR for the period ended September 30, 2015   
 
Statements of financial position  20 
Statements of operations  22 
Statements of comprehensive loss  23 
Statements of cash flows  24 
Statements of changes in equity  26 
Statements of value added  28 
Notes to the interim financial information - ITR  29 

 


 

 

Message from Management

 

Brazil’s current economic climate - with an increase in inflation, credit restriction and, above all, strong devaluation of the real – has had a direct impact on the commercial aviation sector and on our company.

Despite maintaining a positive operating income (EBIT) in the quarter, we have recorded an accounting loss of R$2,133.6 million due to the depreciation of the real and the resulting exchange rate variation of liabilities in US dollars.

The exchange rate is a variable that significantly affects our results, since about 50% of our operating expenses and 86.8% of our financial liabilities, including aircraft, are denominated in US dollars. In the quarter, the minimum and maximum dollar price rate raged between 37.3% and, for the average of the same period of 2014, the increase was even higher, at 55.5%.

Therefore, we are working with all of our focus on mitigating the consequences of this macro scenario on our activities. There are three major areas of action: exercising strong control over costs and expenses; seeking continuous evolution of our operational efficiency; and adjusting capacity with discipline, in order to reach maximum productivity and utilization of our aircraft. In addition, we are taking all measures to ensure a solid cash position.

Costs and expenses optimization

As an example of cost and expenses control initiatives and expected productivity gains, we highlight the new optimization processes and tools of our crew and airport team working schedule; our network; the review of  maintenance contracts, ramp, hospitality and corporate services in general; the redesign of the organizational structure by eliminating layers and the cancellation of new hires.

Network improvements to ensure maximum profitability

Our network is constantly improving and adjusting to the economies in which we operate. As a result, the flights to Miami and Orlando, in the United States, will only be operated seasonally from February 19, 2016. We have also studied the feasibility of continuing operations to Caracas, Venezuela, which are currently ongoing but at a reduced frequency to once a week.

We have also planned two new destinations in Latin America, including Havana, in Cuba, and, as the example of the flights departing from Fortaleza and Natal to Buenos Aires, we studied new direct operations to Argentina’s capital departing from other Northeastern cities.

Maintaining our commitment to reduce 1% of the Company's domestic supply for 2015, we redesigned our network with frequencies adjustments, as well as launched new routes and flights departing from Congonhas Airport in São Paulo to the coastal cities of Salvador, Porto Seguro, Ilhéus and Florianópolis, which are in high demand during the summer. In addition, we expanded operations to Maringá, Londrina, and Presidente Prudente.

For the High Season, we will operate direct flights from Santos Dumont Airport, in Rio de Janeiro, to Navegantes and Florianópolis, in the South of the country. More cities will also be connected to Porto Seguro with direct flights departing from Belo Horizonte, Rio de Janeiro and Brasília. From Campinas, we will have operations to Natal, Fortaleza, Salvador, Recife and Maceió.

 

 

1


 
 

 

Fleet reduction

Considering the adjustments in our capacity previously disclosed and always monitoring the efficient management of our standard fleet of Boeing 737-700 and 800 NG, we have negotiated with our supplier the flexibility in the delivery schedule of the next two years. Therefore, instead of fifteen Boeing 737-800 NG scheduled to be delivered in 2016 and 2017, we will add four aircraft to our fleet in the period. In addition, as we have already done in recent years, we will sublease 12 aircraft in 2016 to foreign counterparts during our low season – compared to 7 in 2015.

All these initiatives, that are already being incorporated, helped us reached a net revenue of R$2,489.6 million in 3Q15, an increase of 1.1% compared to 3Q14. The results also benefited from our efforts to increase the representation of ancillary and cargo revenues on total revenue. Today, they already account for 12.3% of GOL's total revenue.

Strong liquidity position

Anticipating the effects of the economy on our operations and in order to maintain our strong liquidity position and the continuation of projects, we have completed major financial transactions in the quarter. They were: the capital increase of R$461.3 million, held mainly by our controlling shareholder and by Delta Air Lines; the issuance of a long term loan with third parties amounting to US$300 million, with Delta as the guarantor. Adding these two transactions to the figures that we had in the previous period, we have reached R$3,073.3 million in cash in 3Q15, representing 31.2% of our net revenue in the last twelve months. Apart from these, we held the issuance of the 6th series of debentures, amounting to R$1,050.0 million, maturing 2019, with total resources used exclusively for the early redemption of the 4th and 5th issuances which had maturities in2017 and 2018.

2015 guidance review

I would also like to announce a new operating margin (EBIT) guidance for 2015, with the range of -2% to neutral, since the earlier range was between + 2% and + 5%. The review reflects the Brazilian economic scenario already described above, which produced an impact on GOL’s costs and expenses, and on passenger transportation revenues, which mix of leisure and corporate customers has changed.

Our Team of Eagles is devoting all their energy in performing this solid strategy to overcome the challenges of the current economic scenario. I have total confidence in our people and believe that the initiatives announced here and in other studies will lead us to overcome these challenges with security and liquidity, ensuring our strength, and leaving us ready to resume our path of success and achievements.

Paulo Sérgio Kakinoff 

CEO of GOL Linhas Aéreas Inteligentes S.A.

 

2


 
 

 

 

Operating and financial indicators

Traffic Data - GOL

3Q15

3Q14

% Var.

9M15

9M14

% Var.

RPK GOL – Total

9,684

9,459

2.4%

28,970

27,732

4.5%

RPK GOL - Domestic

8,442

8,289

1.8%

25,487

24,550

3.8%

RPK GOL - International

1,243

1,170

6.3%

3,484

3,182

9.5%

ASK GOL – Total

12,321

12,201

1.0%

37,226

36,348

2.4%

ASK GOL – Domestic

10,651

10,587

0.6%

32,378

31,876

1.6%

ASK GOL - International

1,672

1,614

3.6%

4,848

4,472

8.4%

GOL Load Factor - Total

78.6%

77.5%

1.1 p.p

77.8%

76.3%

1.5 p.p

GOL Load Factor - Domestic

79.3%

78.3%

1.0 p.p

78.7%

77.0%

1.7 p.p

GOL Load Factor - International

74.4%

72.5%

1.9 p.p

71.9%

71.2%

0.7 p.p

Operational Data

3Q15

3Q14

% Var.

9M15

9M14

% Var.

Revenue Passengers - Pax on board ('000)

9,775.1

9,977.8

-2.0%

29,284.3

29,039.4

0.8%

Aircraft Utilization (Block Hours/Day)

11.2

11.4

-1.5%

11.3

11.3

0.1%

Departures

78.578

79,853

-1.6%

236,525

234,252

1.0%

Average Stage Length (km)

936

903

3.6%

933

905

3.1%

Fuel consumption (mm liters)

387

380

1.7%

1,160

1,130

2.7%

Full-time employees at period end

16,702

16,354

2.1%

16,702

16,354

2.1%

Average Operating Fleet

128

125

2.6%

128

125

2.4%

Financial Data

3Q15

3Q14

% Var.

9M15

9M14

% Var.

Net YIELD (R$ cents)

22.54

23.15

-2.6%

21.60

23.82

-9.3%

Net PRASK (R$ cents)

17.72

17.94

-1.3%

16.81

18.17

-7.5%

Net RASK (R$ cents)

20.21

20.18

0.1%

19.14

20.18

-5.2%

CASK (R$ cents)

20.13

18.92

6.4%

19.37

19.26

0.6%

CASK ex-fuel (R$ cents)

13.45

11.29

19.2%

12.84

11.41

12.5%

Average Exchange Rate 1

3.5380

2.2745

55.5%

3.1684

2.2898

38.4%

End of period Exchange Rate1

3.9729

2.4510

62.1%

3.9729

2.4510

62.1%

WTI (avg. per barrel, US$) 2

46.5

97.3

-52.2%

51.0

99.7

-48.8%

Price per liter Fuel (R$) 3

2.13

2.45

-13.1%

2.10

2.52

-16.9%

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

0.38

0.74

-48.5%

0.43

0.76

-43.8%

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

Domestic market – GOL

      Domestic supply increased by 0.6% compared to 3Q14 and 1.6% year to date against 9M14, reflecting the lower supply from 2Q14 to 3Q14, when the Company reduced its capacity during the 2014 FIFA World Cup held in Brazil.

Domestic demand increased by 1.8% in the quarter and 3.8% in 9M15, leading the load factor to 79.3%, an increase of 1.0 p.p. compared to 3Q14, and 78.7%, an increase of 1.7 p.p. compared to 9M14.

 

3


 
 

 

      GOL transported 9.2 million passengers in the domestic market in the quarter and 27.7 million passengers year to date, representing a decrease of 2.2% compared to 3Q14 and an increase of 0.7% compared to 9M14.

      Even with the slowdown in the country’s economic activity, GOL remained the leader in tickets sold to corporate passengers in the Brazilian domestic market, with a share of 32.2% in the quarter and 32.3% in 9M15 - according to the Brazilian Association of Corporate Travel Agencies (Abracorp).

International market - GOL

      GOL’s international supply increased by 3.6% in the quarter and 8.4% in 9M15, compared to 2014. International demand showed an increase of 6.3% between July and September, registering a load factor of 74.4%, and, in 9M15, an increase of 9.5%, leading the international load factor to 71.9%. The Company is adjusting its international network by changing frequency in some destinations and opening other international bases in order to capture market opportunities and adapt to Brazil's current economic environment.

      During the quarter, GOL transported 562.0 thousand passengers in the international market, 1.0% higher than in 2014. For 9M15, the Company transported 1.6 million passengers, an increase of 3.8% compared to the same period in 2014.

    PRASK and Yield

      Reflecting the adverse scenario of the Brazilian economy, the yield fell by 2.6% in the quarter and 9.3% from January to September. PRASK partially benefited due to increased load factor by 1.1 p.p. in 3Q15 and 1.5 p.p. in 9M15, dropping 1.3% and 7.5%, respectively, compared to the same period 2014.

Operational fleet and fleet plan 

Fleet plan

2015

2016

2017

>2017

Total

Fleet (End of Period)

140

139

142

 

 

Aircraft Commitments (R$ million)*

666.0

2,071.7

3,190.0

51,751.8

57,679.4

Pre-Delivery Payments (R$ million)

162.9

230.7

400.7

6,851.6

7,645.8

*Considers aircraft list price

 

 

 

 

Frota final de período

3Q15

3Q14

Var.

2Q15

Var.

Boeing 737-NG Family

144

142

+2

142

+2

737-800 NG

107

107

-

106

+1

737-700 NG

37

35

+2

36

+1

737-300 Classic*

-

3

-3

-

-

767-300/200*

-

1

-1

-

-

Opening for rent Type

3Q15

3Q14

Var.

2Q15

Var.

Financial Leasing (737-NG and 767)

46

46

-

45

+1

Operating Leasing

98

97

+1

97

+1

*Non-operational

 

4


 
 

 

At the end of 3Q15, out of a total of 144 Boeing 737-NG aircraft, GOL was operating 136 aircraft on its routes. Of the 8 remaining aircraft, 1 was in the process of being returned to its lessor and 7 were sent via sub-leasing to a European airline.

GOL has 98 aircraft under operating leases and 46 under financial leases, 40 of which with a purchase option when their leasing contracts expire.

The average age of the fleet was 7.6 years at the end of 3Q15. In order to maintain this indicator at low levels, the Company has 126 firm aircraft acquisition orders with Boeing for fleet renewal by 2027.

Capex

GOL posted a net investment of R$675.9 million in 9M15, considering the return of the pre-delivery deposits returns when the aircraft is delivered. For more details on changes in property, plant and equipment, see Note 16 of the financial statements. 

 

 

2015 Guidance

 

2015 Financial Guidance

From

To

9M15 Results

Annual Change in Domestic Supply (ASK)

0

-1%

0

-1%

+1.6%

Average Exchange Rate (R$ /US$)

3.15

2.95

3.40

3.30

3.17

Jet Fuel Price

2.20

2.10

2.25

2.15

2.10

Operating Margin (EBIT)

2%

5%

-2%

0%

-1.2%

           

 

These guidance revisions reflects the high foreign exchange volatility, the decline in international oil prices, and the current economic scenario which, altogether, impacted GOL’s costs and expenses and revenue from passenger transport, whose leisure and business traveler mix changed.

The maintenance of the 2015 domestic supply forecast, from zero to -1%, will reduce capacity by 5% to 7% in 4Q15, given the indicator’s increase by 1.6% until September.

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

 

 

5


 

 

Audit Committee statement

 

 

The Audit Committee of GOL LINHAS AÉREAS INTELIGENTES S.A., in accordance with its bylaws and legal provisions, examined the interim financial information for the period ended September 30, 2015. Based on the procedures performed, considering also the independent auditor’s report - Ernst & Young Auditores Independentes S.S., and the information and explanations received during the period, opines that these documents are able to be appreciated by the Board Shareholder’s Meeting.

 

 

São Paulo, November 09, 2015.

 

 

 

Richard F. Lark

Member of the Audit Committee

 

 

Antônio Kandir

Member of the Audit Committee  

 

 

Luiz Kaufmann

Member of the Audit Committee  

 

 

6


 

 

Directors' statement on the interim financial information

 

 

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

 

In accordance with CVM Rule nº480/09, the Directors declare that discussed, reviewed and agreed with the interim financial information - ITR for the period ended September 30, 2015.

 

 

 

São Paulo, November 10, 2015.

 

 

 

Paulo Sérgio Kakinoff

Chief Executive Officer

 

 

Edmar Prado Lopes Neto

Vice President and Investor Relations Officer

 

 

 

7


 

 

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

 

 

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

 

In accordance with Instrução CVM 480/09, the Directors declare that discussed, reviewed and agreed with the report on review of interim financial information – ITR for the period ended September 30, 2015.

 

 

 

São Paulo, November 10, 2015.

 

 

 

Paulo Sérgio Kakinoff

Chief Executive Officer

 

 

Edmar Prado Lopes Neto

Vice President and Investor Relations Officer

 

8


 

 

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

Report on the review of interim financial information

 

 

To

The Shareholders, Board of Directors and Officers

Gol Linhas Aéreas Inteligentes S.A.

São Paulo - SP

 

Introduction

 

We have reviewed the accompanying individual and consolidated interim financial information of Gol Linhas Aéreas Inteligentes S.A. (“Company”), contained in the Quarterly Information (ITR) for the quarter ended September 30, 2015, which comprises the balance sheet as at September 30, 2015 and the related statement of operations and statement of comprehensive loss for the three and nine-month period then ended, and the statement of changes in equity and statement of cash flows for the nine-month period then ended, including the explanatory information.

 

Management is responsible for the preparation of individual e consolidated interim financial information in accordance with the Technical Pronouncement CPC 21 (R1) - Interim Financial Reporting and in accordance with IAS 34 - Interim Financial Reporting, issued by the International Accounting Standards Board  - IASB, as well as for the presentation of these information in compliance with the rules issued by the Brazilian Securities Commission (“CVM”), applicable to the preparation of Quarterly Information (ITR). Our responsibility is to express a conclusion on this interim financial information based on our review.

 

Scope of review

 

We conducted our review according to the Brazilian and international review standards of interim financial information (NBC TR 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity, and ISRE 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim financial information consists of inquiries, mainly of the people responsible for the financial and accounting matters, and the application of analytical and other review procedures. The scope of a review is significantly narrower than that of an audit conducted in accordance with audit standards and, accordingly, it did not permit us to obtain assurance that we took notice of all significant matters that could have been raised in an audit. Therefore, we did not express an audit opinion.

 

 

 

 

 

 

9


 

 

 

 

Conclusion on the interim financial information

 

Based on our review, we are not aware of any fact that makes us believe that the interim individual and consolidated financial information included in the Quarterly Information referred above was not prepared, in all material respects, in accordance with CPC 21 (R1) and IAS 34 applicable to the preparation of Quarterly Information (ITR), and presented in compliance with the rules issued by the CVM.

 

 

Other matters

 

Statements of value added

 

We have also reviewed the individual and consolidated statement of value added (SVA) for the nine-month period ended September 30, 2015, prepared under the responsibility of the Company’s management, the presentation of which in the interim financial information is required by the rules of the CVM applicable to Quarterly Information (ITR), and as supplementary information under IFRS, whereby no statement of value added presentation is required. These statements have been subject to the same review procedures previously described and, based on our review, we are not aware of any fact that makes us believe that they were not prepared, in all material respects, according to the interim financial information taken as a whole.

 

 

São Paulo, November 10, 2015.

 

 

ERNST & YOUNG

Auditores Independentes S.S.

CRC-2SP015199/O-6

 

 

 

Luiz Carlos Passetti

Accountant CRC-1SP144343/O-3

Vanessa R. Martins

Accountant CRC-1SP244569/O

        

 

 

 

 

 

10


 

GOL Linhas Aéreas Inteligentes S.A.

 

Company Profile / Subscribed Capital

 

 

Number of shares

Current Year

09/30/2015

Paid-in capital

5,035,037,140

Preferred

203,383,968

Total

5,238,421,108

Treasury shares

1,550,671

Total

1,550,671

 

 

11


 

GOL Linhas Aéreas Inteligentes S.A.

 

Individual Interim Financial Information / Statements of Financial Position – Assets

 

(In thousands of Brazilian Reais – R$)

 

 

Line code

 

Line item

Current Year

09/30/2015

Prior Year

12/31/2014

1

Total assets

2,830,164

1,790,138

1.01

Current assets

1,104,313

561,036

1.01.01

Cash and cash equivalents

1,097,592

459,364

1.01.02

Short-term investments

-

56,491

1.01.06

Recoverable taxes

6,678

10,289

1.01.07

Prepaid expenses

-

532

1.01.08

Other current assets

43

34,360

1.01.08.01

Noncurrent assets for sale

7

7

1.01.08.01.01

Restricted cash

7

7

1.01.08.03

Others

36

34,353

1.02

Noncurrent assets

1,725,851

1,229,102

1.02.01

Long-term assets

522,367

186,195

1.02.01.06

Taxes

77,641

84,697

1.02.01.06.01

Deferred taxes

61,226

65,305

1.02.01.06.02

Recoverable taxes

16,415

19,392

1.02.01.08

Related-party transactions

385,465

52,778

1.02.01.08.04

Other related-party transactions

385,465

52,778

1.02.01.09

Other noncurrent assets

59,261

48,720

1.02.01.09.03

Deposits

31,533

26,706

1.02.01.09.04

Restricted cash

27,728

22,014

1.02.02

Investments

195,545

181,220

1.02.03

Property, plant and equipment

1,007,939

861,687

 

12


 

GOL Linhas Aéreas Inteligentes S.A.

 

Individual Interim Financial Information / Statements of Financial Position – Liabilities

 

(In thousands of Brazilian Reais – R$)

 

 

 

Line code

 

Line item

Current Year

09/30/2015

Prior Year

12/31/2014

2

Total liabilities and stockholder’s equity

2,830,164

1,790,138

2.01

Current liabilities

82,723

58,908

2.01.01

Salaries, wages and benefits

350

519

2.01.01.02

Salaries, wages and benefits

350

519

2.01.02

Suppliers

9,724

437

2.01.03

Taxes payable

1,772

-

2.01.04

Short-term debt

69,579

56,619

2.01.05

Other liabilities

1,298

567

2.01.05.02

Others

1,298

567

2.01.05.02.04

Other liabilities

1,298

567

2.01.06

Provisions

-

766

2.02

Noncurrent liabilities

6,148,790

2,249,617

2.02.01

Long-term debt

4,311,229

2,098,209

2.02.02

Other non-current liabilities

26,146

151,408

2.02.02.01

Liabilities with related-party transactions

26,146

151,408

2.02.04

Provisions

1,811,415

-

2.02.04.02

Others Provisions

1,811,415

-

2.02.04.02.04

Loss on investiment

1,811,415

-

2.03

Shareholder’s Equity

(3,401,349)

(518,387)

2.03.01

Issued Capital

3,035,635

2,581,913

2.03.01.01

Capital

3,080,110

2,618,748

2.03.01.02

Cost on issued shares

(44,475)

(36,886)

2.03.01.03

Shares to be issued

-

51

2.03.02

Capital Reserves

176,034

165,772

2.03.02.01

Premium on issue of shares

28,155

32,387

2.03.02.02

Special Reserve

70,979

70,979

2.03.02.05

Treasury Shares

(23,056)

(31,357)

2.03.02.07

Treasury shares

99,956

93,763

2.03.05

Accumulated losses

(7,093,802)

(3,814,522)

2.03.06

Equity valuation adjustments

480,784

548,450

2.03.06.01

Equity valuation adjustments

(209,595)

(138,713)

2.03.06.04

Change in equity through public offer

690,379

687,163

   

13


 

GOL Linhas Aéreas Inteligentes S.A.

 

Individual Interim Financial Information / Statements of Operations

 

(In thousands of Brazilian Reais)

 

 

 

Current

Quarter

Current

Year

Same Quarter

Prior Year

Prior Year

YTD

 

 

Line code

 

 

Line item

07/01/2015 to

09/30/2015

01/01/2015 to

09/30/2015

07/01/2014

to

09/30/2014

01/01/2014 to

09/30/2014

3.04

Operating expenses/revenues

(1,467,315)

(2,174,207)

(18,349)

(346,790)

3.04.02

General and administrative expenses

(2,773)

(8,573)

(2,650)

(10,153)

3.04.04

Other operating income

-

16,523

(1,154)

73,919

3.04.05

Other operating expenses

(1,630)

-

-

-

3.04.06

Equity in subsidiaries

(1,462,912)

(2,182,157)

(14,545)

(410,556)

3.05

Loss before income taxes and financial result

(1,467,315)

(2,174,207)

(18,349)

(346,790)

3.06

Financial result

(704,209)

(1,090,972)

(251,487)

(228,401)

3.06.01

Financial income

6,913

11,847

1,917

10,543

3.06.01.01

Financial income

6,913

11,847

1,917

10,543

3.06.02

Financial expenses

(711,122)

(1,102,819)

(253,404)

(238,944)

3.06.02.01

Financial expenses

(76,190)

(193,354)

(100,984)

(210,858)

3.06.02.02

Exchange variation, net

(634,932)

(909,465)

(152,420)

(28,086)

3.07

Loss before income taxes

(2,171,524)

(3,265,179)

(269,836)

(575,191)

3.08

Income taxes

(7,289)

(14,101)

(2,545)

(2,563)

3.08.01

Current

(5,100)

(9,865)

-

-

3.08.02

Deferred

(2,189)

(4,236)

(2,545)

(2,563)

3.09

Result from continuing operations, net

(2,178,813)

(3,279,280)

(272,381)

(577,754)

3.11

Net loss for the period

(2,178,813)

(3,279,280)

(272,381)

(577,754)

3.99

Earning per share

(2,178,813)

(3,279,280)

(272,381)

(577,754)

 

14


 

GOL Linhas Aéreas Inteligentes S.A.

 

Individual Statements of Comprehensive Loss

 

(In thousands of Brazilian Reais)

 

   

Current Quarter

Current

Year

Same Quarter Prior Year

Prior Year

YTD

Line code

Line item

07/01/2015 to 09/30/2015

01/01/2015 to 09/30/2015

07/01/2014 to 09/30/2014

01/01/2014 to 09/30/2014

4.01

Net loss for the period

(2,178,813)

(3,279,280)

(272,381)

(577,754)

4.02

Other comprehensive income

(68,170)

(70,882)

(21,198)

(77,875)

4.02.01

Cash flow hedges

(103,288)

(107,398)

(32,118)

(117,992)

4.02.02

Tax effect

35,118

36,516

10,920

40,117

4.03

Comprehensive loss for the period

(2,246,983)

(3,350,162)

(293,579)

(655,629)

 

 

 

15


 

GOL Linhas Aéreas Inteligentes S.A.

 

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

 

(In thousands of Brazilian Reais)

 

 

 

Current Year

Prior Year

 

Line code

 

Line item

01/01/2015 to
09/30/2015

01/01/2014 to
09/30/2014

6.01

Net cash used in operating activities

(44,214)

(292,446)

6.01.01

Cash flows from operating activities

3,275,855

448,331

6.01.01.02

Deferred taxes

4,236

2,563

6.01.01.03

Equity in subsidiaries

2,182,157

410,556

6.01.01.04

Share-based payments

3,392

5,150

6.01.01.05

Exchange and monetary variations, net

914,981

32,270

6.01.01.06

Interest on loans

171,089

110,226

6.01.01.08

Interest paid

-

(128,335)

6.01.01.10

Unrealized results of hedge, net

-

15,901

6.01.02

Changes assets and liabilities

(40,789)

(163,023)

6.01.02.01

Deposits

(4,827)

(5,623)

6.01.02.02

Prepaid expenses and recoverable taxes

6,588

11,439

6.01.02.04

Taxes payable

5,979

(120)

6.01.02.05

Interest paid

(176,901)

-

6.01.02.06

Income taxes paid

(4,364)

-

6.01.02.07

Other Liabilities

24,477

(223)

6.01.02.08

Suppliers

9,287

(3,335)

6.01.02.11

Other assets

34,317

7,014

6.01.02.12

Financial applications used for trading

(64,824)

(171,570)

6.01.02.13

Salaries, wages and benefits

(169)

(605)

6.01.03

Others

(3,279,280)

(577,754)

6.01.03.01

Net loss for the year

(3,279,280)

(577,754)

6.02

Net cash used in investing activities

(858,474)

(43,824)

6.02.01

Gains on investiment sale, net

-

65,703

6.02.02

Restricted cash

(5,714)

(1,398)

6.02.03

Advances for property, plant and equipment acquisition

(146,252)

98,766

6.02.06

Related-party transactions

(249,434)

(645)

6.02.07

Capital increase on subsidiary

(570,321)

(830,799)

6.02.08

Dividends received by subsidiary

113,247

80,693

6.02.09

Subsidiary of capital reduction

-

543,856

6.03

Net cash generated by financing activities

1,444,085

384,280

6.03.01

Shares to be issued

(51)

88

6.03.02

Loan funding

1,147,602

835,032

6.03.03

Credit with related parties

(157,239)

467,212

6.03.04

Capital increase

461,362

116,482

6.03.05

Cost of issued shares

-

(4,935)

6.03.06

Loan and lease payment

-

(1,009,736)

6.03.08

Cost loan funding

(7,589)

(19,863)

6.04

Exchange and monetary variations, net

96,831

-

6.05

Net increase (decrease) in cash and cash equivalents

638,228

48,010

6.05.01

Cash and cash equivalents at beginning of the year

459,364

343,793

6.05.02

Cash and cash equivalents at end of the year

1,097,592

391,803

 

 

  

16


 

GOL Linhas Aéreas Inteligentes S.A.

 

Individual Interim Financial Information / Statements of Changes in Equity – From 01/01/2015 to 09/30/2015

 

(In thousands of Brazilian Reais)

 

 

 

Line code

 

 

Line item

 

Capital

stock

Capital reserves, options granted and treasury shares

 

Accumulated

Losses

Other comprehensive loss 

Total

Equity

5.01

Opening balance

2,581,913

852,935

(3,814,522)

(138,713)

(518,387)

5.03

Adjusted balance

2,581,913

852,935

(3,814,522)

(138,713)

(518,387)

5.04

Stockholder’s capital transactions

453,722

13,478

-

-

467,200

5.04.01

Capital increase

461,273

-

-

-

461,273

5.04.02

Cost on share issue

(7,589)

-

-

-

(7,589)

5.04.08

Stock options exercised

-

10,262

-

-

10,262

5.04.09

Capital increase for exercise of stock option

39

-

-

-

39

5.04.10

Gain on dilution of equity interest

-

3,216

-

-

3,216

5.05

Total comprehensive loss

-

-

(3,279,280)

(70,882)

(3,350,162)

5.05.01

Net loss for the period

-

-

(3,279,280)

-

(3,279,280)

5.05.02

Other comprehensive loss

-

-

-

(70,882)

(70,882)

5.05.02.07

Other comprehensive result, net

-

-

-

(70,882)

(70,882)

5.07

Closing balance

3,035,635

866,413

(7,093,802)

(209,595)

(3,401,349)

 

 

 

 

 

 

 

 

 

17


 

GOL Linhas Aéreas Inteligentes S.A.

 

Individual Interim Financial Information / Statements of Changes in Equity – From 01/01/2014 to 09/30/2014

 

(In thousands of Brazilian Reais)

 

 

 

 

Line code

 

 

Line item

 

Capital

Stock

Capital reserves,
options granted and
treasury shares

 

Accumulated losses

Other comprehensive
income

Total consolidated
equity

5.01

Opening balance

2,469,623

767,818

(2,568,353)

(18,162)

650,926

5.03

Adjusted balance

2,469,623

767,818

(2,568,353)

(18,162)

650,926

5.04

Shareholders’ capital transactions

111,635

82,041

-

-

193,676

5.04.01

Capital increase

116,403

-

-

-

116,403

5.04.02

Cost on issue of shares

(4,935)

-

-

-

(4,935)

5.04.08

Share-based payments

-

6,219

-

-

6,219

5.04.09

Capital increase by exercise of stock options

167

-

-

-

167

5.04.10

Gains on change on investment

-

1,852

-

-

1,852

5.04.11

Gains on investment sold - G.A. Smiles

-

73,970

-

-

73,970

5.05

Total comprehensive income/loss

-

-

(577,754)

(77,875)

(655,629)

5.05.01

Net loss for the period

-

-

(577,754)

-

(577,754)

5.05.02

Other comprehensive income/loss

-

-

-

(77,875)

(77,875)

5.05.02.07

Other comprehensive results, net

-

-

-

(77,875)

(77,875)

5.07

Closing balance

2,581,258

849,859

(3,146,107)

(96,037)

188,973

 

 

 

18


 

GOL Linhas Aéreas Inteligentes S.A.

 

Individual Interim Financial Information / Statements of Value Added

 

(In thousands of Brazilian Reais)

 

   

Current Year

Prior Year

 

Line code

 

Line item

01/01/2015 to

09/30/2015

01/01/2014 to

 09/30/2014

7.01

Revenue

18,077

74,147

7.01.02

Other revenue

18,077

74,147

7.01.02.01

Other operating income

18,077

74,147

7.02

Acquired from third parties

(6,104)

(5,315)

7.02.02

Material, power, third-party services and other

(5,775)

(5,315)

7.02.04

Others

(329)

-

7.02.04.01

Sales and advertising

(329)

-

7.03

Gross value added

11,973

68,832

7.05

Added value produced

11,973

68,832

7.06

Value added received in transfer

(1,875,196)

(400,013)

7.06.01

Equity in subsidiaries

(2,182,157)

(410,556)

7.06.02

Financial income

306,961

10,543

7.07

Total wealth for distribution

(1,863,223)

(331,181)

7.08

Wealth for distribution

(1,863,223)

(331,181)

7.08.01

Employees

3,997

5,358

7.08.01.01

Salaries

3,997

5,358

7.08.02

Taxes

15,809

2,271

7.08.02.01

Federal taxes

15,809

2,271

7.08.03

Third-party capital remuneration

1,396,251

238,944

7.08.03.01

Other

1,396,251

238,944

7.08.04

Return on own capital

(3,279,280)

(577,754)

7.08.04.03

Loss for the period

(3,279,280)

(577,754)

 

19


 

GOL Linhas Aéreas Inteligentes S.A.

 

Consolidated Interim Financial Information / Statements of Financial Position – Assets

 

(In thousands of Brazilian Reais)

 

 

Line code

 

Line item

Current Year

 09/30/2015

Prior Year

12/31/2014

1

Total assets

11,124,073

9,976,647

1.01

Current assets

3,591,688

2,986,198

1.01.01

Cash and cash equivalents

2,452,895

1,898,773

1.01.02

Short-term investments

192,948

355,134

1.01.02.01

Short-term investments at fair value

192,948

355,134

1.01.02.01.03

Restricted cash

7

58,310

1.01.02.01.04

Short-term investments

192,941

296,824

1.01.03

Accounts receivable

478,789

352,284

1.01.04

Inventories

180,768

138,682

1.01.06

Recoverable taxes

93,594

81,245

1.01.07

Prepaid expenses

113,247

99,556

1.01.08

Other current assets

79,447

60,524

1.01.08.03

Others

79,447

60,524

1.01.08.03.03

Other credits

40,745

41,678

1.01.08.03.04

Rights on derivatives transactions

38,702

18,846

1.02

Noncurrent assets

7,532,385

6,990,449

1.02.01

Long-term assets

1,670,890

1,665,746

1.02.01.06

Taxes

227,350

557,309

1.02.01.06.01

Deferred Taxes

154,278

486,975

1.02.01.06.02

Recoverable taxes

73,073

70,334

1.02.01.07

Prepaid expenses

12,064

18,247

1.02.01.09

Other noncurrent assets

1,431,476

1,090,190

1.02.01.09.03

Restricted cash

427,452

273,240

1.02.01.09.04

Deposits

973,727

793,508

1.02.01.09.05

Other credits

30,296

23,442

1.02.02

Investments

18,996

8,483

1.02.03

Property, plant and equipment

4,136,840

3,602,034

1.02.03.01

Property, plant and equipment in operation

2,019,002

1,522,310

1.02.03.01.01

Other flight equipments

1,246,187

935,209

1.02.03.01.02

Advances for property, plant and equipment acquisition

643,371

456,197

1.02.03.01.04

Others

129,444

130,904

1.02.03.02

Property, plant and equipment under leasing

2,117,838

2,079,724

1.02.03.02.01

Property, plant and equipment under financial leasing

2,117,838

2,079,724

1.02.04

Intangible

1,705,659

1,714,186

1.02.04.01

Intangible

1,163,357

1,156,701

1.02.04.02

Goodwill

542,302

557,485

 

20


 

GOL Linhas Aéreas Inteligentes S.A.

 

Consolidated Interim Financial Information / Statements of Financial Position – Liabilities

 

(In thousands of Brazilian Reais)

 

 

Line code

 

Line item

Current Year

09/30/2015

Prior Year

12/31/2014

2

Total liabilities and equity

11,124,073

9,976,647

2.01

Current liabilities

4,970,306

4,212,646

2.01.01

Salaries, wages and benefits

289,726

255,440

2.01.01.02

Salaries, wages and benefits

289,726

255,440

2.01.02

Suppliers

681,967

686,151

2.01.03

Taxes payable

107,585

100,094

2.01.04

Short-term debt

1,346,984

1,110,734

2.01.05

Other liabilities

2,227,630

1,853,133

2.01.05.02

Others

2,227,630

1,853,133

2.01.05.02.04

Taxes and landing fees

335,180

315,148

2.01.05.02.05

Advance ticket sales

1,286,418

1,101,611

2.01.05.02.06

Mileage program

235,122

220,212

2.01.05.02.07

Advances from customers

60,270

3,196

2.01.05.02.08

Other current liabilities

128,980

127,600

2.01.05.02.09

Liabilities from derivative transactions

181,660

85,366

2.01.06

Provisions

316,414

207,094

2.02

Noncurrent liabilities

9,342,156

6,096,975

2.02.01

Long-term debt

8,142,163

5,124,505

2.02.02

Other non-current liabilities

826,329

693,904

2.02.02.02

Others

826,329

693,904

2.02.02.02.03

Mileage program

708,246

559,506

2.02.02.02.05

Taxes payable

38,452

34,807

2.02.02.02.06

Other liabilities

79,631

99,591

2.02.04

Provisions

373,664

278,566

2.03

Stockholder’s equity

(3,188,389)

(332,974)

2.03.01

Capital

2,922,307

2,468,585

2.03.01.01

Issued capital

3,080,110

2,618,748

2.03.01.02

Cost on issued shares

(157,803)

(150,214)

2.03.01.03

Shares to be issued

-

51

2.03.02

Capital reserves

176,034

165,772

2.03.02.01

Premium on issue of shares

28,155

32,387

2.03.02.02

Special reserve

70,979

70,979

2.03.02.05

Treasury shares

(23,056)

(31,357)

2.03.02.07

Share-based payments

99,956

93,763

2.03.05

Accumulated losses

(6,980,474)

(3,701,194)

2.03.06

Equity valuation adjustments

480,784

548,450

2.03.06.01

Equity valuation adjustments

(209,595)

(138,713)

2.03.06.02

Change in equity through public offer

690,379

687,163

2.03.09

Non-controlling interests

212,960

185,413

 

21


 

GOL Linhas Aéreas Inteligentes S.A.

 

Consolidated Interim Financial Information /Statements of Operations

 

(In thousands of Brazilian Reais)

 

 

Current

Quarter

Current

Year

Same Quarter

Prior Year

Prior Year

YTD

 

Line code

 

Line item

07/01/2015 to

09/30/2015

01/01/2015 to

09/30/2015

07/01/2014 to

09/30/2014

01/01/2014 to

09/30/2014

3.01

Sales and services revenue

2,489,645

7,125,950

2,461,692

7,336,380

3.01.01

Passenger

2,182,965

6,257,196

2,189,349

6,605,046

3.01.02

Cargo and other

306,680

868,754

272,343

731,334

3.02

Cost of sales and/or services

(2,019,001)

(5,975,179)

(1,969,714)

(5,987,436)

3.03

Gross profit

470,644

1,150,771

491,978

1,348,944

3.04

Operating expenses

(461,781)

(1,239,206)

(340,020)

(1,014,688)

3.04.01

Sales expenses

(291,378)

(732,666)

(193,304)

(618,704)

3.04.01.01

Marketing expenses

(291,378)

(732,666)

(193,304)

(618,704)

3.04.02

General and administrative expenses

(168,051)

(519,694)

(144,800)

(467,734)

3.04.04

Other operating income

-

16,523

(1,153)

73,920

3.04.05

Other operating expenses

(1,630)

-

-

-

3.04.06

Equity in subsidiaries

(722)

(3,369)

(763)

(2,170)

3.05

Income before taxes and financial result

8,863

(88,435)

151,958

334,256

3.06

Financial result

(1,702,570)

(2,552,641)

(434,883)

(734,360)

3.06.01

Financial income

61,879

271,638

118,548

289,612

3.06.01.01

Financial income

61,879

271,638

118,548

289,612

3.06.02

Financial expenses

(1,764,449)

(2,824,279)

(553,431)

(1,023,972)

3.06.02.04

Exchange variation, net

(1,440,615)

(2,009,109)

(281,135)

(173,257)

3.06.02.05

Financial expenses

(323,834)

(815,170)

(272,296)

(850,715)

3.07

Loss before income taxes

(1,693,707)

(2,641,076)

(282,925)

(400,104)

3.08

Tax expenses

(439,856)

(520,130)

37,797

(86,150)

3.08.01

Current

(62,639)

(150,762)

(30,198)

(104,253)

3.08.02

Deferred

(377,217)

(369,368)

67,995

18,103

3.09

Net loss from continuing operations

(2,133,563)

(3,161,206)

(245,128)

(486,254)

3.11

Net loss for the period

(2,133,563)

(3,161,206)

(245,128)

(486,254)

3.11.01

Attributable to Company’ hareholders

(2,178,813)

(3,279,280)

(272,381)

(577,754)

3.11.02

Attributable to non-controlling Company’ shareholders

45,250

118,074

27,253

91,500

3.99

Earning per share

45,250

118,074

27,253

91,500

 

22


 

GOL Linhas Aéreas Inteligentes S.A.

 

Consolidated Statements of Comprehensive Loss

 

(In thousands of Brazilian Reais)

 

 

   

 

Current Quarter

 

Current Year

Same Quarter Prior Year

 

Prior Year YTD

Line code

Line item

07/01/2015 to 09/30/2015

01/01/2015 to 09/30/2015

07/01/2014 to 09/30/2014

01/01/2014 to 09/30/2014

4.01

Net loss for the period

(2,133,563)

(3,161,206)

(245,128)

(486,254)

4.02

Other comprehensive income (loss)

(68,170)

(70,882)

(21,198)

(77,875)

4.02.01

Cash flow hedges

(103,288)

(107,398)

(32,118)

(117,992)

4.02.02

Tax effect

35,118

36,516

10,920

40,117

4.03

Comprehensive income for the period

(2,201,733)

(3,232,088)

(266,326)

(564,129)

4.03.01

Attributable to Company’ shareholders

(2,246,983)

(3,350,162)

(293,579)

(655,629)

4.03.02

Attributable to non-controlling Company’ shareholders

45,250

118,074

27,253

91,500

 

 

 

23


 

GOL Linhas Aéreas Inteligentes S.A.

 

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

 

(In thousands of Brazilian Reais)

 

 

 

Current Year

Prior Year

Line code

Line item

01/01/2015 to 09/30/2015

01/01/2014 to 09/30/2014

6.01

Net cash generated by operating activities

(87,494)

682,411

6.01.01

Cash flows from operating activities

2,854,781

946,779

6.01.01.01

Depreciation and amortization

302,645

369,183

6.01.01.02

Allowance for doubtful accounts

28,266

12,544

6.01.01.03

Provisions for judicial deposits

33,314

7,718

6.01.01.05

Reversion for inventory obsolescence

(488)

25

6.01.01.06

Deferred taxes

369,368

(18,103)

6.01.01.07

Share-based payments

10,910

7,109

6.01.01.08

Exchange and monetary variations, net

1,635,652

362,982

6.01.01.09

Interest on loans and financial lease

448,839

253,192

6.01.01.10

Unrealized hedge results

11,230

15,901

6.01.01.14

Mileage program

-

(113,408)

6.01.01.15

Write-off property, plant and equipment and intangible assets

4,889

39

6.01.01.16

Result share plan provision

6,787

47,427

6.01.01.17

Equity in subsidiaries

3,369

2,170

6.01.02

Changes assets and liabilities

218,931

221,886

6.01.02.01

Accounts receivable

(154,771)

(220,000)

6.01.02.02

Inventories

(41,598)

(19,480)

6.01.02.03

Deposits

80,931

(39,529)

6.01.02.04

Prepaid expenses, insurance and tax recoverable

(42,753)

(8,043)

6.01.02.05

Other assets

(5,922)

(5,224)

6.01.02.06

Suppliers

(17,486)

(47,842)

6.01.02.07

Advanced ticket sales

184,807

52,316

6.01.02.08

Advances from customers

57,074

(149,586)

6.01.02.09

Salaries, wages and benefits

27,499

15,516

6.01.02.10

Taxes and landing fees

20,032

62,898

6.01.02.11

Taxes payable

174,090

73,045

6.01.02.12

Provisions

(17,284)

(116,557)

6.01.02.14

Interest paid

(479,168)

(293,603)

6.01.02.15

Income tax paid

(163,108)

(90,924)

6.01.02.17

Mileage program

163,650

186,238

6.01.02.18

Other Liabilities

(12,446)

136,161

6.01.02.19

Liabilities from Derivative Transactions

(42,190)

(32,047)

6.01.02.20

Financial applications used for trading

467,574

718,547

6.01.03

Others

(3,161,206)

(486,254)

6.01.03.01

Net loss for the year

(3,161,206)

(486,254)

6.02

Net cash used in investing activities

(768,121)

(134,080)

6.02.01

Investment acquisition

-

(18,750)

6.02.02

Restricted Cash

(95,909)

(82,734)

6.02.03

Gains on investment sale, net

-

65,703

6.02.04

Intangible

(25,831)

(24,954)

6.02.05

Property, Plant and Equipment

(340,695)

(166,243)

6.02.06

Advances for property, plant and equipment acquisition

(187,174)

92,898

6.02.07

Dividends received by subsidiary

1,302

-

6.02.08

Short-term investments

(119,814)

-

 

 

24


 

GOL Linhas Aéreas Inteligentes S.A.

 

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

 

(In thousands of Brazilian Reais)

 

 

 

Current Year

Prior Year

Line code

Line item

01/01/2015 to 09/30/2015

01/01/2014 to 09/30/2014

6.03

Net cash (used in) generated by financing activities

1,057,023

(142,438)

6.03.01

Cost loan funding

-

(61,293)

6.03.02

Loan funding

2,567,820

1,796,711

6.03.03

Loan payment

(1,576,845)

(1,274,545)

6.03.04

Capital increase

465,099

119,141

6.03.06

Financial leasing payment

(295,284)

(194,052)

6.03.09

Capital reduction subsidiaries

-

(456,144)

6.03.10

Cost of share issuance

(7,589)

(4,935)

6.03.11

Shares to be issued

(51)

88

6.03.12

Dividends paid

(96,127)

(67,409)

6.04

Exchange and monetary variations, net

352,714

(99,263)

6.05

Net increase in cash and cash equivalents

(554,122)

306,630

6.05.01

Cash and cash equivalents at beginning of the year

1,898,773

1,635,647

6.05.02

Cash and cash equivalents at end of the year

2,452,895

1,942,277

 

25


 

GOL Linhas Aéreas Inteligentes S.A.

 

Consolidated Interim Financial Information / Statements of Changes in Equity – From 01/01/2015 to 09/30/2015

 

(In thousands of Brazilian Reais)

 

 

 

 

 

Line code

 

 

 

 

Line item

 

 

 

Capital Stock

Capital reserves, options

granted and

treasury shares

 

 

 

Accumulated losses

 

 

Other Comprehensive loss

 

 

 

Equity (deficit) attributable to equity holders of the parent

 

 

Non-controlling

Interests

 

 

Total

Equity (deficit)

5.01

Opening balance

2,468,585

852,935

(3,701,194)

(138,713)

(518,387)

185,413

(332,974)

5.03

Adjusted balance

2,468,585

852,935

(3,701,194)

(138,713)

(518,387)

185,413

(332,974)

5.04

Stockholder’s capital transactions

453,722

13,478

-

-

467,200

(90,527)

376,673

5.04.01

Capital increase

461,272

-

-

-

461,272

-

461,272

5.04.02

Cost of issued shares

(7,589)

-

-

-

(7,589)

-

(7,589)

5.04.06

Dividend distributed

-

-

-

-

-

(96,127)

(96,127)

5.04.08

Stock options exercised

-

10,262

-

-

10,262

648

10,910

5.04.09

Capital increase for exercise of stock option

39

-

-

-

39

3,737

3,776

5.04.10

Gains on change on investment

-

3,216

-

-

3,216

1,215

4,431

5.05

Total comprehensive (loss) income

-

-

(3,279,280)

(70,882)

(3,350,162)

118,074

(3,232,088)

5.05.01

Net loss for the period

-

-

(3,279,280)

-

(3,279,280)

118,074

(3,161,206)

5.05.02

Other comprehensive income (loss)

-

-

-

(70,882)

(70,882)

-

(70,882)

5.05.02.08

Other comprehensive results, net

-

-

-

(70,882)

(70,882)

-

(70,882)

5.07

Closing balance

2,922,307

866,413

(6,980,474)

(209,595)

(3,401,349)

212,960

(3,188,389)

 

 

 

26


 

 

GOL Linhas Aéreas Inteligentes S.A.

 

Consolidated Interim Financial Information / Statements of Changes in Equity – From 01/01/2013 to 09/30/2014

 

(In thousands of Brazilian Reais)

 

Line code

Line item

Capital Stock

Capital reserves, options

granted and

treasury shares

Accumulated losses

Other
comprehensive
loss

Equity (deficit) attributable to equity holders of the parent

Non-controlling

Interests

Total

Equity (deficit)

5.01

Opening balance

2,356,295

767,818

(2,455,025)

(18,162)

650,926

567,574

1,218,500

5.03

Adjusted balance

2,356,295

767,818

(2,455,025)

(18,162)

650,926

567,574

1,218,500

5.04

Shareholders capital transactions

111,635

82,041

-

-

193,676

(479,229)

(285,553)

5.04.01

Capital increase

116,403

-

-

-

116,403

-

116,403

5.04.02

Cost on Issued Shares

(4,935)

-

-

-

(4,935)

-

(4,935)

5.04.06

Dividend

-

-

-

-

-

(67,409)

(67,409)

5.04.08

Share-based payments

-

6,219

-

-

6,219

890

7,109

5.04.09

Capital increase by exercise of

stock options

 

167

 

-

 

-

 

-

 

167

 

2,659

 

2,826

5.04.10

Gains on change on investment

-

1,852

-

-

1,852

2,826

4,678

5.04.11

Gains on investment sold - G.A. Smiles

-

73,970

-

-

73,970

37,949

111,919

5.04.14

Capital decrease of subsidiary

-

-

-

-

-

(456,144)

(456,144)

5.05

Total comprehensive income/loss

-

-

(577,754)

(77,875)

(655,629)

91,500

(564,129)

5.05.01

Net loss for the period

-

-

(577,754)

-

(577,754)

91,500

(486,254)

5.05.02

Other comprehensive income/loss

-

-

-

(77,875)

(77,875)

-

(77,875)

5.05.02.08

Other comprehensive results, net

-

-

-

(77,875)

(77,875)

-

(77,875)

5.07

Closing balance

2,467,930

849,859

(3,032,779)

(96,037)

188,973

179,845

368,818

 

 

 

27


 

GOL Linhas Aéreas Inteligentes S.A.

 

Consolidated Interim Financial Information / Statements of Value Added

 

(In thousands of Brazilian Reais)

 

   

Current Year

Prior Year

Line code

Line item

01/01/2015 to 09/30/2015

01/01/2014 to 09/30/2014

7.01

Revenue

7,686,372

7,837,780

7.01.02

Other revenue

7,649,228

7,835,345

7.01.02.01

Passengers, cargo and other

7,561,951

7,761,425

7.01.02.02

Other operating income

87,277

73,920

7.01.04

Allowance/reversal for doubtful accounts

37,144

2,435

7.02

Acquired from third parties

(5,204,187)

(5,102,302)

7.02.02

Material, power, third-party services and other

(2,209,274)

(1,727,898)

7.02.04

Other

(2,994,913)

(3,374,404)

7.02.04.01

Suppliers of fuel and lubrificants

(2,490,298)

(2,888,275)

7.02.04.02

Aircraft insurance

(21,543)

(16,079)

7.02.04.03

Sales and advertising

(483,072)

(470,050)

7.03

Gross value added

2,482,185

2,735,478

7.04

Retentions

(302,645)

(369,183)

7.04.01

Depreciation, amortization and exhaustion

(302,645)

(369,183)

7.05

Added value produced

2,179,540

2,366,295

7.06

Value added received in transfer

2,890,863

287,442

7.06.01

Equity in subsidiaries

(3,369)

(2,170)

7.06.02

Financial income

2,894,232

289,612

7.07

Total wealth for distribution

5,070,403

2,653,737

7.08

Wealth for distribution

5,070,403

2,653,737

7.08.01

Employees

1,143,298

966,907

7.08.01.01

Salaries

944,539

801,789

7.08.01.02

Benefits

121,569

97,906

7.08.01.03

F.G.T.S.

77,190

67,212

7.08.02

Taxes

972,891

521,945

7.08.02.01

Federal taxes

950,592

502,102

7.08.02.02

State taxes

20,972

18,591

7.08.02.03

Municipal taxes

1,327

1,252

7.08.03

Third-party capital remuneration

6,115,420

1,651,139

7.08.03.01

Interest

5,370,745

964,008

7.08.03.02

Rent

712,987

617,309

7.08.03.03

Other

31,688

69,822

7.08.04

Capital remuneration

(3,161,206)

(486,254)

7.08.04.03

Loss for the period

(3,279,280)

(577,754)

7.08.04.04

Non-controlling interest

118,074

91,500

 

28


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

1.    General information

 

Gol Linhas Aéreas Inteligentes S.A. (“Company” or “GLAI”) is a publicly-listed company established on March 12, 2004, in accordance with the Brazilian Corporate Laws. The Company is engaged in controlling its subsidiaries: (i) VRG Linhas Aéreas S.A. (“VRG”), which essentially explores (a) the regular and non-regular flight transportation services of passengers, cargo and mailbags, domestically or internationally, according to the concessions granted by the competent authorities; and (b) complementary activities of flight transport services provided in its bylaws; and (ii) Smiles S.A., which mainly operates (a) the development and management of its own or third party’s customer loyalty program, and (b) sale of redemption rights of awards related to the loyalty program.

 

Additionally, the Company is the direct parent Company of the wholly-owned subsidiaries GAC Inc. (“GAC”), Gol Finance (“Finance”), Gol LuxCo S.A. (“Gol LuxCo”), Gol Dominicana Lineas Aereas SAS (“Gol Dominicana”) and indirect parent Company of Webjet Linhas Aéreas S.A. ("Webjet").

 

The Company’s shares are traded on BM&FBOVESPA and on the New York Stock Exchange (“NYSE”). The Company adopted Differentiated Corporate Governance Practices of Level 2 from BM&FBOVESPA and is included in the Special Corporate Governance Stock Index (“IGC”) and the Special Tag Along Stock Index (“ITAG”), which were created to identify companies committed to the differentiated corporate governance practices.

 

2.    Approval and summary of significant accounting policies applied in preparing the Interim Financial Information

 

The interim financial information - ITR were authorized for issuance at the Board of Directors’ meeting held on November 10, 2015. The Company’s registered Office is at Praça Comandante Linneu Gomes, s/n, portaria 3, prédio 24, Jardim Aeroporto, São Paulo, Brazil.

 

2.1.   Basis of preparation  

 

The individual and consolidated interim financial information – ITR was prepared for the three-month and nine-month period ended on September 30, 2015 in accordance with International Accounting Standards (“IAS”) 34, and CPC (21).

 

The consolidated interim financial information – ITR was prepared based on historical cost, except for certain financial assets and liabilities measured at fair value and investments measure through the equity method.

 

The individual and consolidated interim financial information – ITR do not include all the information and disclosure items required in the consolidated annual financial statements and, therefore, it must be read along with the individual and consolidated financial statements from the year ended December 31, 2014 filed on March 30, 2015, which were prepared in accordance with Brazilian accounting practices and IFRS. There were no changes in accounting policies adopted during the period from December 31, 2014 to September 30, 2015.

 

The shareholder’s equity individual and consolidated interim financial information – ITR do not present differences on its composition, except in respect of the non-controlling interest in Smiles S.A., highlighted in the consolidated equity.

 

 

29


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

2.2.   New standards, amendments and interpretations

 

a)     New standards and interpretations issued by IASB but not applicable until September 30, 2015 with no early adoption by the Company:

 

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

 

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

 

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

 

•   Annual impovements – Cycle 2010-2012 and cycle 2011-2013 – Aplicable for annual periods begginning on July 1, 2014 or, thereafter;

 

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

 

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

 

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

 

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

 

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

 

 

30


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

3.    Seasonality

 

The Company expects that revenues and profits from its flights reach the highest levels during the summer and winter vacation periods, in January and July, respectively, and during the last two weeks of December, during the season holidays. Given the high portion of fixed costs, this seasonality tends to result in fluctuations in our operational quarter-on-quarter income.

 

4.    Cash and cash equivalents

 

 

Individual

Consolidated

 

09/30/2015

12/31/2014

09/30/2015

12/31/2014

Cash and bank deposits

481,716

32,995

1,103,932

507,248

Cash equivalents

615,876

426,369

1,348,963

1,391,525

 

1,097,592

459,364

2,452,895

1,898,773

 

The cash equivalents breakdown is as follows:

 

 

Individual

Consolidated

 

09/30/2015

12/31/2014

09/30/2015

12/31/2014

Private bonds

615,426

426,369

1,085,667

1,130,462

Government bonds

-

-

6,125

63

Investment funds

450

-

257,171

261,000

 

615,876

426,369

1,348,963

1,391,525

 

As of September 30, 2015, the cash equivalents were represented by private bonds (Bank Deposit Certificates - “CDBs”), buy-back transactions and time deposits paid at post fixed rates ranging between 100% and 101% of the Interbank Deposit Certificate rate (“CDI”) on the onshore investments.

 

The investment funds were represented primarily by government bonds paid at a weighted average rate of 99% of the CDI rate.

 

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

 

 

Repatriation of the generated cash in Venezuela

 

Until January 22, 2014, the Venezuelan government allowed the companies with operations in Venezuela could request the repatriation of their resources generated by sales in Venezuela through CADIVI (“Comisión de Administración de Divisas”) by the official rate of BS 6,30/US$1,00. From January 23, 2014, the airlines companies were obligated by the government to adopt an additional procedures translation for repatriation of resources denominated Sistema Supplementary Foreign Currency Administration System (SICAD) which is determined on a weekly basis. On September 30, 2015, the rate was BS 13.50/US$1.00.

 

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

 

The total amount of the cash in Venezuela registered under “Cash and bank deposits” as of September 30, 2015 was BS774,503. The cash related to 2013 sales is started at the official exchange rate of 6.3 Venezuelan bolivar per U.S. Dollar. Cash related to 2014 sales and repatriation requests are started using SICAD 1 at the exchange rate of 12.0 Venezuelan bolivar per U.S. Dollar. The portion accrued as an impairment from the Venezuelan Bolivar related to U.S. Dollar as of September 30, 2015 was R$56,109 (R$72,972 as of December 31, 2014). The net recoverable balance of R$433,532 is recorded as “Cash and bank deposits”. While the cash is available for use in Venezuela with no restriction, the Company ability to repatriate these funds has been limited due to Venezuelan government controls.

 

31


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

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

 

5.    Short-term investments

 

 

 

 
 

Individual

Consolidated

 

09/30/2015

12/31/2014

09/30/2015

12/31/2014

Private bonds

-

55,849

1,127

74,127

Government bonds

-

-

62,324

66,030

Investment funds

-

642

129,490

156,667

 

-

56,491

192,941

296,824

 

As of September 30, 2015, the private bonds were represented by CDBs and financial letters with first-rate financial institutions, paid at a weighted average rate of 112% of the CDI rate on onshore investments.

 

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

 

Investment funds are represented primarily by private and government bonds paid at a weighted average of 100% of the CDI rate.

 

6.    Restricted cash

 

 

 

 
 

Individual

Consolidated

09/30/2015

12/31/2014

09/30/2015

12/31/2014

Margin deposits for hedge transactions (a)

-

-

156,566

82,025

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

7,409

-

117,875

42,040

Escrow deposits - Bic Banco (c)

19,563

21,579

52,195

70,820

Escrow deposits - Leasing (d)

-

-

96,974

72,672

Escrow deposits - Debentures (e)

-

-

-

58,303

Other deposits

763

442

3,849

5,690

27,735

22,021

427,459

331,550

 

 

 

 

Current

7

7

7

58,310

Noncurrent

27,728

22,014

427,452

273,240

 

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

(b)  The consolidated amount includes R$44,141 related to the the guarantee of the loan of the subsidiary Webjet (See Note 18).

(c)  The amount of R$19,563 on the individual Company and which comprises the consolidated balance is related to a contractual guarantee for STJ’s PIS and COFINS proceeding, paid to GLAI as detailed in Note 23b and existing notes guarantees.

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

(e)  The existing balance on December 31, 2014 was related to the debenture agreement issued and it was fully redeemed on July 06, 2015. For further information, see Note 18.

 

 

 

32


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

7.    Trade receivable

 

Consolidated

09/30/2015

12/31/2014

Local currency

 

 

Credit card administrators

94,629

72,116

Travel agencies

263,736

176,244

Installment sales (a)

533

43,730

Cargo agencies

32,562

35,536

Airline partners companies

19,551

29,044

Other (b)

57,367

67,228

468,378

423,898

Foreign currency

 

 

Credit card administrators

39,302

18,502

Travel agencies

17,187

10,151

Cargo agencies

615

89

57,104

28,742

525,482

452,640

 

 

Allowance for doubtful accounts (a)

(46,693)

(83,837)

478,789

368,803

 

 

Current

478,789

352,284

Noncurrent

-

16,519

 

(a)    The amount of R$43,416 related to installment sales “Voe Fácil” overdue above 360 days was fully provisioned and written off on April 30, 2015.

(b)    Includes the amount of R$29,797, related to commercial cooperation strategic partnership with Air France-KLM to be received in two equal installments on June,2016, being the long-term installment registered on “Other credits”. For further information, see Note 12e.

 

The aging list of accounts receivable is as follows:

 

 

Consolidated

 

 

09/30/2015

12/31/2014

Not yet due

355,059

278,311

Overdue until 30 days

69,789

14,480

Overdue 31 to 60 days

6,949

6,748

Overdue 61 to 90 days

4,610

3,606

Overdue 91 to 180 days

14,661

10,775

Overdue 181 to 360 days

17,693

34,434

Overdue above 360 days

56,721

104,286

 

525,482

452,640

       

 

The average collection period of installment sales is 5 months and a 7.61% monthly interest is charged on the receivable balance, recognized in financial result. The average collection period of the other receivables is 130 days as of September 30, 2015 and December 31, 2014.

 

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

 

 

 

33


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

 

Consolidated

 

09/30/2015

12/31/2014

Balance at beginning of the period

(83,837)

(85,101)

Additions

(28,266)

(17,143)

Unrecoverable amounts

53,942

9,624

Recoveries

11,468

8,783

Balance at the end of the period

(46,693)

(83,837)

 

8.    Inventories

 

 

Consolidated

 

09/30/2015

12/31/2014

Consumables

32,688

26,020

Parts and maintenance materials

147,806

117,748

Advances to suppliers

-

322

Others

12,645

7,450

Provision for obsolescence

(12,371)

(12,858)

180,768

138,682

 

The changes in the provision for obsolescence are as follows:

 

Consolidated

09/30/2015

12/31/2014

Balance at the beginning of the period

(12,858)

(12,227)

Additions

(2,189)

(3,968)

Write-off and reversal

2,676

3,337

Balance at the end of the period

(12,371)

(12,858)

 

9.    Deferred and recoverable taxes

 

a)      Recoverable taxes

Individual

Consolidated

09/30/2015

12/31/2014

09/30/2015

12/31/2014

ICMS

-

-

41,975

39,321

Prepaid income taxes

22,230

25,206

59,917

64,750

Withholding taxes (IRRF)

863

3,336

5,077

14,594

PIS and COFINS

-

-

21,752

2,472

Withholding tax of public institutions

-

-

11,196

16,845

Value added tax - IVA

-

-

23,600

12,280

Income tax on imports

-

657

58

734

Others

-

482

3,092

583

Total

23,093

29,681

166,667

151,579

 

 

 

 

Current assets

6,678

10,289

93,594

81,245

Noncurrent assets

16,415

19,392

73,073

70,334

 

 

34


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

b)      Deferred tax assets (liabilities) - long term

 

GLAI

VRG

Smiles

Consolidated

09/30/2015

12/31/2014

09/30/2015

12/31/2014

09/30/2015

12/31/2014

09/30/2015

12/31/2014

Income Tax losses

44,266

47,381

-

283,543

-

-

44,266

330,924

Negative basis of social contribution

15,936

17,057

-

102,075

-

-

15,936

119,132

Temporary differences:

 

 

 

 

 

 

 

 

Mileage program

-

-

46,853

46,853

-

-

46,853

46,853

Allowance for doubtful accounts and other credits

-

-

95,874

95,874

243

729

96,117

96,603

Provision for losses on VRG’s acquisition

-

-

143,350

143,350

-

-

143,350

143,350

Provision for legal and tax liabilities

1,024

867

41,827

41,827

362

158

43,213

42,852

Aircraft return

-

-

102,524

102,524

-

-

102,524

102,524

Derivative transactions not settled

-

-

122,176

88,078

-

-

122,176

88,078

Tax benefit due to goodwill incorporation (a)

-

-

-

-

47,412

58,353

47,412

58,353

Flight rights

-

-

(353,226)

(353,226)

-

-

(353,226)

(353,226)

Maintenance deposits

-

-

(119,259)

(116,873)

-

-

(119,259)

(116,873)

Depreciation of engines and parts for aircraft maintenance

-

-

(168,008)

(164,391)

-

-

(168,008)

(164,391)

Reversal of goodwill amortization on VRG’s acquisition

-

-

(127,659)

(127,659)

-

-

(127,659)

(127,659)

Aircraft leasing

-

-

73,412

73,412

-

-

73,412

73,412

Others (b)

-

-

130,593

123,264

28,069

9,454

187,171

147,043

Total deferred tax and social contribution - noncurrent

61,226

65,305

(11,543)

338,651

76,086

68,694

154,278

486,975

                 

 

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

(b)  The portion of taxes on Smiles unrealized profit in the amount of R$28,509 is registered directly in the consolidated column (R$14,325 as of December 31, 2014).

 

The Company, VRG and Webjet have net operating losses and negative basis of social contribution. The net operating losses carryforward have no expiration period, however, the compensation is limited to 30% of the annual taxable profit. The unused balances of net operating losses carryforward are as follow:

 

 

Individual

(GLAI)

Direct subsidiary

(VRG)

Indirect subsidiary (Webjet)

 

09/30/2015

12/31/2014

09/30/2015

12/31/2014

09/30/2015

12/31/2014

Income tax losses

177,065

189,522

3,179,741

2,801,620

836,299

818,159

Negative basis of social

contribution

177,065

189,522

3,179,741

2,801,620

836,299

818,159

             

 

As of September 30, 2015, the tax credits from tax loss carry forwards and negative social contribution basis were valued based on the reasonably expected generation of future taxable income of the parent Company and its subsidiaries, subject to legal limitations. The forecast of future taxable income on tax losses and negative tax base of social contribution were prepared based on the business plan and approved by the Board of Directors on December 19, 2014.

 

The Company’s Management considers that the deferred assets recognized as of September 30, 2015 arising from temporary differences will be realized when the provisions are settled and the related future events are resolved.

 

35


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

The analysis of the deferred taxes credits realization was described by company as follow:   

 

GLAI: the Company recognized tax credit amounted in R$61,226, of which R$60,202 is related to tax loss and negative basis of social contribution and R$1,024 is related to the temporary differences, with realization supported by the long term plan of the Company.

 

VRG: this subsidiary recognized tax credits on tax losses and negative basis of social contribution in the amount of R$1,081,112. However, due to recent events in the political condition, the instability in the economic condition, the Brazilian Real depreciation and other facts that affect the forecast of expected taxable profits and the requirements of the accounting standard CPC 32 – Income Taxes (IAS 12), the Company decided to anticipated and record the write off of the tax credits on tax losses and negative basis of social contribution, in the amount of R$385,618, and, no longer recognize the net amount of R$348,876 of deferred income tax and social contribution.   

 

Except, per the deferred tax credit recorded under “other comprehensive income” that will affect the taxable profit only at the moment of its realization, and combined with CPC-26 – Presentation of Financial Statements, continue to be fully recorded under equity.

 

The administration will continue monitoring the external factors, aiming to reflect on its books only the assets and liability that have achievement according to projected results.

 

Smiles: for this subsidiary does not present tax losses and negative basis of social contribution. Thus, the deferred tax credit is composed only for temporary differences which, according to the taxable results history and the forecast, expectation of realization.

 

Webjet: the forecast did not present suficiente taxable profits to be realized over future periods, and as a result, a provision was recorded for unrealizable loss tax credits of R$284,342.

 

The reconciliation of effective rate of income tax and social contribution for the period of three and six months ended September 30, 2015 is shown as follow:

 

 

36


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

Individual

 

Three-month ended on

Nine-month ended on

09/30/2015

09/30/2014

09/30/2015

09/30/2014

Loss before income tax and social contribution

(2,171,524)

(269,836)

(3,265,179)

(575,191)

Combined tax rate

34%

34%

34%

34%

Income tax credits at the combined tax rate

738,318

91,744

1,110,161

195,565

Adjustments to calculate the effective tax rate:

 

 

 

 

Equity results

(497,390)

(4,945)

(741,933)

(139,589)

Tax losses from wholly-owned subsidiaries

(23,386)

(34,651)

(56,281)

(38,877)

Income tax on permanent differences and other

(1)

5

17

17

Nontaxable revenues (nondeductible expenses), net

2,242

(772)

(1,199)

(7,118)

Juros sobre o capital próprio

-

(54,887)

(1,299)

(10,797)

Exchange variation on foreign investments

(227,072)

-

(325,965)

-

Benefit on tax losses and temporary differences not constituted

-

961

-

(1,764)

Income tax and social contribution credit (expense)

(7,289)

(2,545)

(14,101)

(2,563)

 

 

 

 

Current income tax and social contribution

(5,100)

-

(9,865)

-

Deferred income tax and social contribution

(2,189)

(2,545)

(4,236)

(2,563)

(7,289)

(2,545)

(14,101)

(2,563)

Effective tax rate

0.34%

0.94%

0.43%

0.45%

 

 

 

 

 

 

 

Consolidated

Three-month ended on

Nine-month ended on

09/30/2015

09/30/2014

09/30/2015

09/30/2014

Loss before income tax and social contribution

(1,693,707)

(282,925)

(2,641,076)

(400,104)

Combined tax rate

34%

34%

34%

34%

Income tax credits at the combined tax rate

575,860

96,195

897,966

136,035

Adjustments to calculate the effective tax rate:

 

 

 

 

Equity results

(245)

(260)

(1,145)

(738)

Tax losses from wholly-owned subsidiaries

(24,048)

(34,922)

(57,705)

(39,737)

Income tax on permanent differences and other

429

500

221

401

Nontaxable revenues (nondeductible expenses), net

(48,397)

4,117

(89,300)

(53,887)

Juros sobre o capital próprio

-

(75,536)

1,103

(14,328)

Exchange variation on foreign investments

(288,732)

-

(402,458)

-

Benefit on tax losses and temporary differences not constituted

(654,723)

47,703

(868,812)

(113,896)

Income tax and social contribution credit (expense)

(439,856)

37,797

(520,130)

(86,150)

 

 

 

 

Current income tax and social contribution

(62,639)

(30,198)

(150,762)

(104,253)

Deferred income tax and social contribution

377,217

67,995

369,368

18,103

(439,856)

37,797

(520,130)

(86,150)

Effective tax rate

25.97%

-

19.69%

21.53%

 

37


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

10. Prepaid expenses

 

 

Individual

Consolidated

 

09/30/2015

12/31/2014

09/30/2015

12/31/2014

Deferred losses from sale-leaseback transactions (a)

-

-

20,317

26,525

Prepaid lease

-

-

49,165

44,093

Prepaid insurance

-

532

1,251

21,408

Prepaid commissions

-

-

19,439

16,204

Others (b)

-

-

35,139

9,573

-

532

125,311

117,803

 

 

 

 

Current

-

532

113,247

99,556

Noncurrent

-

-

12,064

18,247

 

(a)  Related to 11 aircraft 737-800 Next Generation from sale-leaseback transaction from 2006 to 2009. For further information, see Note 29b.

(b)  Includes the amount of R$6,838 related to the agreement with Confederação Brasileira de Futebol (“CBF”) signed in 2013, for the sponsorship and transportation of the Brazilian soccer team and other participating teams in the Brazilian cup and championship, with maturity in the year 2017.

 

11. Deposits

 

 

Individual

Consolidated

 

09/30/2015

12/31/2014

09/30/2015

12/31/2014

Judicial deposits (a)

31,533

26,706

314,537

266,686

Maintenance deposits (b)

-

-

380,069

343,688

Deposits in guarantee for lease agreements (c)

-

-

279,121

183,134

 

31,533

26,706

973,727

793,508

 

a)     Judicial deposits

 

Judicial deposits and blocked escrows represent guarantees of lawsuits related to tax, civil and labor claims deposited in escrow until the resolution of the related claims. Part of the blocked amount in escrow is related to civil and labor claims arising on the succession orders on claims against Varig S.A. and proceedings filed by employees that are not related to the Company or any related party (third-party claims). As the Company is not correctly classified as the defendant of these lawsuits, whenever such blockages occur, the exclusion of such is requested in order to release the resources. As of September 30, 2015 the blocked amounts regarding the Varig’ succession and the third-party lawsuits are R$91,530 and R$74,219, respectively (R$85,558 and R$66,970 as of December 31, 2014, respectively).

 

b)    Maintenance deposits

 

The Company and its subsidiaries VRG and Webjet made deposits in U.S. Dollars for maintenance of aircraft and engines that will be used in future events as set forth in some leasing contracts.

 

The maintenance deposits do not exempt the Company and its subsidiaries, as lessee, neither from the contractual obligations relating to the maintenance of the aircraft nor from the risk associated with maintenance activities. The Company and its subsidiaries hold the right to select any of the maintenance service providers or to perform such services internally.

 

 

38


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

c)     Deposits in guarantee for lease agreements

 

As required by some lease agreements, the Company and its subsidiaries hold guarantee deposits in U.S. Dollars on behalf of the leasing companies, whose full refund occurs upon the contract expiration date.

 

12.  Transactions with related parties

 

a)     Loan agreements - Noncurrent assets and liabilities

 

       Parent Company

 

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

 

 

Asset

Liability

 

09/30/2015

12/31/2014

09/30/2015

12/31/2014

GLAI with VRG (a)

385,465

52,778

-

4,129

GAC with VRG (b)

-

-

26,146

129,658

GOL LuxCo with VRG

-

-

-

17,621

 

385,465

52,778

26,146

151,408

 

(a)    During the period ended September 30, 2015, the subsidiary VRG adquired an intercompany loan in the amount of R$326,409. Such loan arised from issuance of debt by Gol Luxco, as detailed on note 18a.II.

(b)    Refers to loan agreement in US dollars. For the period ended September 30, 2015,the Company prepaid an amount of R$129,057.

 

Additionally, the Parent Company holds loans between: Gol LuxCo (asset) with Finance (liability) in the amount of R$790,233 and Gol LuxCo (asset) with GAC (liability) in the amount of R$1,405,579. These transactions are eliminated by the Company, since the entities are offshore and are considered an extension of the Company’s operations.

 

b)    Transportation services and consulting

 

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

 

i.     Breda Transportes e Serviços S.A. for passenger and luggage transportation services between airports, and transportation of employees, renewable every 12 months for additional equal terms through an amendment instrument signed by the parties, annually adjusted based on the IGP-M fluctuation (General Market Price Index from Getulio Vargas Foundation). The agreement was expired on May 31, 2015 and is its renovation is still in progress.

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

iii.    Serviços Gráficos S.A., providing graphic services, maturing on July 01, 2015 and it is under negotiation.

iv.   Pax Participações S.A., to provide consulting and advisory services, with maturity agreement on April 30, 2016.

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

 

As of September 30, 2015, balances payable to related companies amounting to R$3,652 (R$3,286 as of December 31, 2014) are included in the balance of accounts payables and substantially refers to the payment to Breda Transportes e Serviços S.A.

 

39


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

 

During the period ended on September 30, 2015, the subsidiary VRG recognized the total expenses related to these services of R$12,008 (R$10,146 as of September 30, 2014).

 

c)     Contracts account opening UATP (“Universal Air Transportation Plan”) to grant credit limit

 

In September 2011, the subsidiary VRG entered into agreements with related parties Pássaro Azul Taxi Aéreo Ltda. and Viação Piracicabana Ltda., both with no expiration date, with the purpose of the issuance of credits in the amounts of R$20 and R$40, respectively, to be used in the UATP (Universal Air Transportation Plan) system. The UATP account (virtual card) is accepted as a payment method on the purchase of airline tickets and related services, seeking to simplify the billing and facilitate the payment between participating companies.

 

d)    Financing contract for engine maintenance

 

The subsidiary VRG has a line of funding for maintenance of engines services, which disbursement occurs through the issuance of Guaranteed Notes.  As of September 30, 2015, VRG holds two series of Guaranteed Notes for maintenance of engines, issued on February 14, 2014 and March 13, 2015, maturing up to 3 years. During the period ended September 30, 2015 the spending on engine maintenance conducted by Delta Air Lines was R$215,815 (R$17,403 as of September 30, 2014).

 

e)     Financing contract for engine maintenance

 

On February 19, 2014, the Company signed an exclusive strategic partnership for long-term business cooperation with Airfrance-KLM with the purpose of the sales activities improvements and codeshare expansion and mileage programs benefts between the companies for the customers in the Brazilian and European market. The agreement provides the incentive investment in the Company in the amount of R$112,152, which payment is divided in three installments: the first installments in the amount of R$74,506 was received during the period ended December 31, 2014, the second installment in the amount of R$17,679 was received during the period ended June 30, 2015 and the last one in the amount of R$29,797 will be received in 2016, these values are being updated by the current exchange rate. The agreement will mature within 5 years and the installments will be amortized monthly. On September 30, 2015, the company has deffered revenue in the amount of R$30,030 and R$54,207 recorded as “Other Liabilities” in the current and noncurrent liability, respectively (R$22,430 and R$71,030 as of December 31, 2014, in the current and noncurrent liability, respectively).

 

f)     Remuneration of key management personnel

 

 

Consolidated

 

Three-month ended on

Nine-month ended on

 

09/30/2015

09/30/2014

09/30/2014

09/30/2014

Salaries and benefits

7,741

10,825

21,479

20,806

Related taxes and charges

1,201

2,208

4,057

3,057

Share-based payments

5,318

2,256

7,674

3,159

 

14,260

15,289

33,210

27,022

 

As of September 30, 2015 and 2014 the Company did not offer post employment benefits, and there are no severance benefits or other long-term benefits for the Management or other employees.

 

 

40


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

13. Share-based payments

 

The Company holds two share-based payment plans offered to its management personnel: the Stock Option Plan and the Restricted Shares Plan. Both plans stimulate and promote the alignment of the Company’s goals, management and employees, mitigate the risks in value created for the Company resulting from the loss of their executives and strengthen the commitment and productivity of these executives to long-term results.

 

GLAI

 

a)     Stock Option Plan

 

The beneficiaries of the shares are allowed to purchase the option after 3 years from the grant date, with an acquisition condition that the beneficiary maintains its employment relationship up to the end of this period.

 

The options become vested 20% from the first year, an additional 30% as from the second, and the remaining 50% as from the third year. On all the granted plans, the options may also be exercised within 10 years after the grant date.

 

On all the stock options, the expected volatility of the options is based on the historical volatility of 252 working days of the Company’s shares traded on BM&FBOVESPA, and the fair value of the restricted shares granted was estimated on the grant date using the Black-Scholes pricing model, as follows:

 

 

Stock Options Plan

 

Option year

 

 

 

Board

meeting

 

 

Total options granted

Outstan-ding options

Exercise price

of the option

(In Reais)

 

The fair value of the option at grant date

(In Reais)

 

 

Estimate volatility of share price

 

 

 

Expected dividend

 

 

Risk-free rate return

 

Average remaining maturity

(in years)

2006

01/02/2006

99,816

13,220

47.30

51.68

39.87%

0.93%

18.00%

1

2007

12/31/2006

113,379

14,962

65.85

46.61

46.54%

0.98%

13.19%

2

2008

12/20/2007

190,296

41,749

45.46

29.27

40.95%

0.86%

11.18%

3

2009 (a)

02/04/2009

1,142,473

20,414

10.52

8.53

76.91%

-

12.66%

4

2010 (b)

02/02/2010

2,774,640

1,097,811

20.65

16.81

77.95%

2.73%

8.65%

5

2011

12/20/2010

2,722,444

947,172

27.83

16.07 (c)

44.55%

0.47%

10.25%

6

2012

10/19/2012

778,912

501,819

12.81

5.32 (d)

52.25%

2.26%

9.00%

8

2013

05/13/2013

802,296

572,616

12.76

6.54 (e)

46.91%

2.00%

7.50%

8

2014

08/12/2014

653,130

529,467

11.31

7.98 (f)

52.66%

3.27%

11.00%

9

2015

08/11/2015

1,930,844

1,620,230

9.35

3.37 (g)

55.57%

5.06%

13.25%

10

 

 

11,208,230

5,359,460

16.35

 

 

 

 

7.65

 

(a)  In April 2010 216,673 shares were granted in addition to the 2009 plan.

(b)  In April 2010 additional options were approved totaling 101,894, referring to the 2010 plan.

(c)  The fair value is calculated by the average value from R$16.92, R$16.11 and R$15.17 for the respective periods of vesting (2011, 2012 and 2013).

(d) The fair value is calculated by the average value from R$6.04, R$5.35 and R$4.56 for the respective periods of vesting (2012, 2013 and 2014).

(e)  The fair value is calculated by the average value from R$7.34, R$6.58 and R$5.71 for the respective periods of vesting (2013, 2014 and 2015).

(f)   The fair value is calculated by the average value from R$8.20, R$7.89 and R$7.85 for the respective periods of vesting (2014, 2015 and 2016).

(g) The fair value is calculated by the average value from R$3.60, R$3.30 and R$3.19 for the respective periods of vesting (2015, 2016 and 2017).

 

41


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

The movement of the stock options for the period ended September 30, 2015 is as follows:

 

 

Total of stock options

Weighted average exercise price

Options outstanding as of December 31, 2014

3,861,742

19.44

Options granted

1,930,844

9.35

Options cancelled and adjustments in estimated lost rights

(433,126)

19.19

Options outstanding as of September 30, 2015

5,359,460

16.35

 

 

Number of options exercisable as of December 31, 2014

3,235,562

20.93

Number of options exercisable as of September 30, 2015

3,525,353

19.81

 

b)    Restricted shares

 

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

 

Year of

the share

Date of the Board Meeting

Total shares granted

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

2012

11/13/2012

589,304

9.70

2013

05/13/2013

712,632

12.76

2014

08/12/2014

804,073

11.31

2015

04/30/2015

1,207,037

9.35

 

 

3,313,046

 

 

The movement of the restricted shares for the period ended September 30, 2015 is as follows:

 

 

Total of restricted shares

Restricted shares outstanding as of December 31, 2014

1,559,335

Restricted shares granted

1,207,037

Restricted shares transferred

(533,204)

Restricted shares cancelled and adjustments in estimated lost right

(185,132)

Restricted shares transferred as of September 30, 2015

2,048,036

 

 

As of September 30, 2015, the Company transferred 533,204 restricted shares to its beneficiaries, amounting R$8,301.

 

 

42


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

Smiles

 

The Stock Option Plan

 

Stock Options Plan

Option year

Board Meeting

Total options granted

Exercise price

of the option

(In Reais)

The fair value of the option at grant date

(In Reais)

 

Estimate volatility of share price

Expected dividend

Risk-free rate of return

Length of the option

(in years)

2013

08/08/2013

1,058,043

21.70

4.25 (a)

36.35%

6.96%

7.40%

10

2014

02/04/2014

1,150,000

31.28

4.90 (b)

33.25%

10.67%

9.90%

10

 

 

2,208,043

 

 

 

 

 

 

 

(a)     The fair value calculated for the plan was R$4.84, and R$4.20 for the vesting periods of 2013 and 2014, respective and R$3.73 for 2015 and 2016 vesting periods.

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

 

The movement of the stock options for the period ended September 30, 2015 is as follows:

 

 

Total of stock options

Weighted average exercise price

Options outstanding as of December 31, 2014

1,347,926

28.75

Options exercised

(561,008)

14.56

Options outstanding as of September 30, 2015

786,918

29.59

 

For the period ended September 30, 2015, the Company recorded in stockholders' equity a result from share-based payments in the amount of R$10,262 related to Company’s stockholders, and R$648 related to its non-controlling stockholders (R$9,084 related to Company’s stockholders and R$1,254 related to its non-controlling stockholders for the year ended December 31, 2014) for the plans presented above, being the corresponding entry in the income statement result classified as personnel costs.

 

14. Investments

 

The investments in foreign subsidiaries, GAC, Finance and Gol LuxCo were considered as an extension of the Company and are consolidated on a line by line basis on the individual company GLAI. Accordingly, only the subsidiaries Smiles, VRG and Gol Dominicana were considered as an investment.

 

The amount of consolidated investments is related to 21.3% of the working capital of Netpoints Fidelidade S.A., hold by the subsidiary Smiles, and to SCP Trip investment, hold by the subsidiary VRG, both registered as equity method.

 

The change in investments during the period ended September 30, 2015 is as follows:

 

 

43


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

Individual

 

Consolidated

 

Gol

Dominicana

 

VRG

 

Smiles

 

Total

 

 

Trip

 

Netpoints

 

Total

Relevant information of the Company’s subsidiaries as of September 30, 2015:

     

 

 

 

 

 

Total number of shares

-

4,251,383,431

123,070,277

-

 

-

60,492,408

-

Capital

8,846

3,911,083

146,164

-

 

1,318

63,451

-

Interest

100.0%

100.0%

54.1%

-

 

60.0%

21.3%

-

Total stockholder’s equity

(409)

(1,829,537)

463,848

-

 

2,888

9,784

-

Unrealized gains (a)

-

-

(55,341)

-

 

-

-

-

Adjusted stockholder’s equity (b)

(409)

(1,829,537)

195,545

-

 

1,733

2,080

-

Net (loss) income for the period

(4,189)

(2,289,958)

257,600

-

 

1,570

(20,288)

-

Unrealized gains (a)

-

-

(27,536)

-

 

-

-

-

Net (loss) income for the year attributable to Company’s stockholders

(4,189)

(2,289,958)

111,990

-

 

942

(4,311)

-

 

 

 

 

 

 

 

 

 

Changes on investments:

 

 

 

 

 

 

 

 

Balance as of December 31, 2014

1,197

(12,796)

192,819

181,220

 

2,092

6,391

8,483

Equity in subsidiaries

(4,189)

(2.289,958)

111,990

(2,182,157)

 

942

(4,311)

(3,369)

Exchange variation from foreign subsidiaries

(38)

(198)

-

(236)

 

-

-

-

Unrealized hedge losses

-

(70,882)

-

(70,882)

 

-

-

-

Gains due to change on investment

-

-

3,216

3,216

 

-

-

-

Capital increase

2,621

567,700

-

570,321

 

-

-

-

Dividends

-

-

(113,247)

(113,247)

 

(1,302)

-

(1,302)

Goodwill on investment acquisition

-

-

-

-

 

-

15,184

15,184

Share-based payments

-

-

767

767

 

-

-

-

Amortization losses, net of sale leaseback (c)

-

(4,872)

-

(4,872)

 

-

-

-

Balance as of September 30, 2015

409

(1,811,006)

195,545

(1,615,870)

 

1,732

17,264

18,996

 

(a)    Refers to transactions related to revenue for redeeming miles for flight tickets for Smiles Program participants that, for consolidated Interim Financial Information purposes, only take place when the participants of the program are effectively transported by VRG.

(b)    The adjusted equity corresponds to the percentage of the equity less unrealized gains.

(c)    The subsidiary GAC has a net balance of deferred losses and gains on sale leaseback, whose deferral is subject to the payment of contractual installments made by its subsidiary VRG. Accordingly, as of September 30, 2015, the net balance to be deferred is essentially part of the net investment of the Parent Company in VRG. The net balance to be deferred as of September 30, 2015 was R$18,533 (R$23,406 as of December 31, 2014). For further details, see Note 29b.

 

15. Losses per share

 

Although there are differences between common and preferred shares in terms of voting rights and priority in case of liquidation, the Company’s preferred shares are not entitled to receive any fixed dividends. The preferred stockholders are entitled to receive dividends per share 35 (thirty five) times of the dividends per share paid to common stockholders. Therefore, the Company understands that the economic capacity of the preferred shares is higher than the common shares.

 

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

 

 

44


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

Individual and Consolidated

 

Three-month ended on

09/30/2015

09/30/2014

 

Common

Preferred

Common

Preferred

Numerator

   

 

 

Net loss for the period attributable to Company’ stockholders

(1,045,932)

(1,132,881)

(138,347)

(134,034)

Diluted securities effect - Smiles (a)

(135)

(147)

(141)

(137)

(1,046,067)

(1,133,028)

(138,488)

(134,171)

Denominator

 

 

 

 

Weighted average number of outstanding shares (In thousands)

5,035,037

155,817

5,035,037

139,374

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

5,035,037

155,817

5,035,037

139,374

 

 

 

 

Basic loss per share (b)

(0.208)

(7.271)

(0.028)

(0.962)

Diluted loss per share (b)

(0.208)

(7.272)

(0.028)

(0.963)

 

Individual and Consolidated

 

Nine-month ended

09/30/2015

09/30/2014

 

Common

Preferred

Common

Preferred

Numerator

   

 

 

Net loss for the period attributable to Company’ stockholders

(1.641.062)

(1.638.218)

(299,534)

(278,220)

Diluted securities effect - Smiles (a)

(141)

(141)

(144)

(134)

(1.641.203)

(1.638.359)

(299,678)

(278,354)

Denominator

 

 

 

 

Weighted average number of outstanding shares (In thousands)

5,035,037

143,609

5,035,037

133,622

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

5,035,037

143,609

5,035,037

133,622

 

 

 

 

Basic loss per share (b)

(0,326)

(11,407)

(0.059)

(2.082)

Diluted loss per share (b)

(0,326)

(11,408)

(0.060)

(2.083)

 

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

(b)    The weighted average considers the split of 1 common shares to 35 common shares approved at the Extraordinary General Meeting held on March 23, 2015, in accordance with CPC 41 (IAS 33). Earnings per share presented reflects of the economic strenght of each class of shares.

 

Diluted result per share is calculated by the weighted average number of outstanding shares, in order to assume the conversion of all potential dilutive shares.Diluted result per share is calculated based on considering the instruments that may have a potential dilutive effect in the future, such as share-based payment transactions, described in Note 13. However, due to the losses reported for the period ended on September 30, 2015, these instruments issued have anti-dilutive effect and, therefore, are not considered in the total number of outstanding shares.

 

45


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

16. Property, plant and equipment

 

Individual

 

The balance corresponds to advances for acquisition of aircraft and are related to prepayments made based on the contracts with Boeing Company to acquire 17 aircraft 737-800 Next Generation (21 aircraft as of December 31, 2014) and 109 aircraft 737-MAX (109 aircraft as of December 31, 2014) in the amount of R$580,639 (R$434,387 as of December 31, 2014) and the right to the residual value of aircraft in the amount of R$427,300 (R$427,300 as of December 31, 2014), both held by the subsidiary GAC.

 

Consolidated

 

09/30/2015

12/31/2014

Average anual depreciation rate

Cost

Accumulated

depreciation

Net

amount

Net

amount

Flight equipment

 

 

 

 

 

Aircraft under finance leasing (a)

4%

3,189,528

(1,071,690)

2,117,838

2,079,724

Sets of replacement parts and spares engines

4%

1,193,886

(406,567)

787,319

755,640

Aircraft reconfigurations/overhauling

30%

1,323,328

(852,949)

470,379

198,359

Aircraft and safety equipment

20%

2,058

(1,297)

761

840

Tools

10%

31,169

(17,341)

13,828

13,751

 

5,739,969

(2,349,844)

3,390,125

3,048,314

 

 

 

 

 

Impairment losses (b)

-

(26,100)

-

(26,100)

(33,381)

 

5,713,869

(2,349,844)

3,364,025

3,014,933

Property, plant and equipment in use

 

 

 

 

 

Vehicles

20%

10,809

(9,041)

1,768

1,709

Machinery and equipment

10%

53,181

(28,437)

24,744

25,647

Furniture and fixtures

10%

22,952

(15,342)

7,610

7,091

Computers and peripherals

20%

39,650

(30,564)

9,086

10,940

Communication equipment

10%

2,606

(1,689)

917

1,032

Facilities

10%

4,681

(4,169)

512

724

Maintenance center - Confins

10%

105,971

(55,122)

50,849

58,954

Leasehold improvements

20%

51,559

(43,962)

7,597

10,297

Construction in progress

-

26,361

-

26,361

14,510

 

317,770

(188,326)

129,444

130,904

 

6,031,639

(2,538,170)

3,493,469

3,145,837

Advances for aircraft acquisition

-

643,371

-

643,371

456,197

 

6,675,010

(2,538,170)

4,136,840

3,602,034

 

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

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

 

 

46


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

Changes in property, plant and equipment balances are as follows:

 

 

Property, plant and equipment under finance lease (*)

Other flight equipment

Advances for acquisition of property, plant and equipment

Others

Total

As of January 01, 2014

2,175,697

987,310

467,764

141,389

3,772,160

Additions

60,679

189,917

482,910

18,064

751,570

Disposals

(304)

(5,064)

(494,477)

(46)

(499,891)

Depreciation

(156,348)

(236,954)

-

(28,503)

(421,805)

As of December 31, 2014

2,079,724

935,209

456,197

130,904

3,602,034

Additions

142,367

473,110

2,026,473

20,516

2,662,466

Disposals

-

(4,382)

(1,839,299)

(507)

(1,844,188)

Depreciation

(104,253)

(157,750)

-

(21,469)

(283,472)

As of September 30, 2015

2,117,838

1,246,187

643,371

129,444

4,136,840

 

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

17. Intangible assets

 

 

 

Goodwill

Airport operating licenses

 

 

Software

 

 

Total

Balance as of January 01, 2014

542,302

1,038,900

112,988

1,694,190

Additions

15,183

-

46,308

61,491

Disposals

-

-

(4)

(4)

Amortizations

-

-

(41,491)

(41,491)

Balance as of December 31, 2014

557,485

1,038,900

117,801

1,714,186

Additions

-

-

25,830

25,830

Disposals (*)

(15,183)

-

-

(15,184)

Amortizations

-

-

(19,173)

(19,173)

Balance as of September 30, 2015

542,302

1,038,900

124,458

1,705,659

    

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

 

18. Short and long-term debt

 

 

Maturity of

the contract

Interest rate

 

Individual

 

Consolidated

   

 

09/30/2015

12/31/2014

09/30/2015

12/31/2014

Short-term debt

           

Local currency:

   

 

 

 

 

BNDES – Direct (a)

Jul, 2017

TJLP+1.40% p.a.

-

-

3,119

3,111

Debentures IV (b)

Sep, 2018

128% of DI

-

-

-

166,974

Debentures Smiles (c)

Jul, 2015

115% of DI

-

-

-

347,484

Debentures VI (o)

Sep, 2019

132% of DI

-

-

100,000

-

Safra (d)

May, 2018

128% of DI

-

-

33,256

16,357

Safra K-giro (n)

Dec, 2015

111% of DI

-

-

115,898

-

Interest

-

-

-

-

13,216

10,153

Foreign currency (in US$):

 

 

 

 

 

 

J. P. Morgan (e)

Feb, 2016

0.90% p.a.

-

-

92,835

54,213

Finimp (f)

Ago, 2016

3.47% p.a.

-

-

396,079

117,598

Engine Facility (Cacib) (g)

Jun, 2021

Libor 3m+2.25% p.a.

-

-

21,266

14,048

Interest

-

-

69,579

56,619

66,633

55,470

 

 

 

69,579

56,619

842,302

785,408

Financial lease

Jul, 2025

4.97% p.a.

-

-

504,682

325,326

Total short-term debt

 

 

69,579

56,619

1,346,984

1,110,734

 

 

 

 

 

 

 

Long-term debt

 

 

 

 

 

 

Local currency:

 

 

 

 

 

 

BNDES – Direct (a)

Jul, 2017

TJLP+1.40% p.a.

-

-

2,581

4,904

Debentures IV (b)

Sep, 2018

128% of DI

-

-

-

443,076

Debentures V (h)

Jun, 2017

128% of DI

-

-

-

490,625

Debentures VI (o)

Set, 2019

132% of DI

-

 

922,339

-

Safra (d)

May, 2018

128% of DI

-

-

65,919

82,585

Foreign currency (in US$):

 

 

 

 

 

 

J.P. Morgan (e)

Mar, 2018

0.90% p.a.

-

-

80,967

13,566

Engine Facility (Cacib) (g)

Jun, 2021

Libor 3m+2.25% p.a.

-

-

221,748

158,447

Senior Bond I (i)

Apr, 2017

7.50% p.a.

334,355

223,543

334,355

223,543

Senior Bond II (j)

Jul, 2020

9.25% p.a.

621,588

408,663

621,588

408,663

Senior Bond III (k)

Feb, 2023

10.75% p.a.

139,775

93,450

130,267

82,970

Senior Bond IV (l)

Jan, 2022

8.87% p.a.

1,273,330

841,313

1,273,330

841,313

Perpetual Bond (m)

-

8.75% p.a.

794,580

531,240

711,150

475,460

Term Loan (p)

Ago, 2020

6,5% p.a.

1,147,601

-

1,147,601

-

 

 

4,311,229

2,098,209

5,511,845

3,225,152

Financial lease

Jul, 2025

4.97% p.a.

-

-

2,630,318

1,899,353

Total long-term debt

   

4,311,229

2,098,209

8,142,163

5,124,505

Total

 

 

4,380,808

2,154,828

9,489,147

6,235,239

 

 

 

47


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

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

(b) Full early settlement of debentures from the subsidiary VRG on September 30, 2010 with funds raised through issuance of 6 serie of debentures, as mentioned on item 18.iii.

(c) Debentures issued by subsidiary Smiles, full settled on July 06, 2015.

(d)The total amount of the financing as of September 30, 2015 was R$99,174 with guaranteed deposits in the amount of R$44,141 as shown in Note 6.

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

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

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

(h)Full early settlement of debentures from the subsidiary VRG on September 30, 2010 with funds raised through issuance of 6 serie of debentures, as mentioned on item 18.iii.

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

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

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

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

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

(n) Short term loan used to supply working capital on the subsidiary VRG by the Safra bank.

(o)Issuance of 105.000 debentures by the subsidiary VRG on September 30, 2015, in order to finance the full early settlement of the debentures of IV and V issuance.

(p)Issuance of loans by the subsidiary Gol LuxCo on August 31, 2015 in order to finance the aircraft acquisition and bank financing, with third party guarantee, to Gol LuxCo.

 

 

The maturities of long-term debt as of September 30, 2015 are as follows:

 

 

2016

2017

2018

2019

After
2019

Without
maturity date

Total

Individual

 

 

 

 

 

 

 

Foreign currency (in US$):

 

 

 

 

 

 

 

Senior Bond I

-

334,355

-

-

-

-

334,355

Senior Bond II

-

-

-

-

621,588

-

621,588

Senior Bond III

-

-

-

-

139,775

-

139,775

Senior Bond IV

-

-

-

-

1,273,330

-

1,273,330

Perpetual Bond

-

-

-

-

-

794,580

794,580

Term loan

 

 

 

 

1,147,601

 

1,147,601

Total

-

334,355

-

-

3,182,294

794,580

4,311,229

 

 

 

 

 

 

 

 

 

Consolidated

 

 

 

 

 

 

 

Local currency:

 

 

 

 

 

 

 

BNDES – Direct

774

1,807

-

-

-

-

2,581

Safra

16,667

33,333

15,919

-

-

-

65,919

Debentures IV

-

150,000

400,000

372,339

-

-

922,339

Debentures V

-

-

-

-

-

-

-

Foreign currency (in US$):

 

 

 

 

 

 

 

J.P. Morgan

13,421

53,686

13,860

-

-

-

80,967

Engine Facility (Cacib)

5,313

21,250

21,250

21,250

152,685

-

221,748

Senior Bond I

-

334,355

-

-

-

-

334,355

Senior Bond II

-

-

-

-

621,588

-

621,588

Senior Bond III

-

-

-

-

130,267

-

130,267

Senior Bond IV

-

-

-

-

1,273,330

-

1,273,330

Perpetual Bond

-

-

-

-

-

711,150

711,150

Term Loan

 

 

 

 

1,147,601

 

1,147,601

Total

36,175

594,431

451,029

393,589

3,325,471

711,150

5,511,845

 

48


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

 

The fair value of senior and perpetual bond as of September 30, 2015 is as follows:

 

 

Individual

Consolidated

 

Book

Market

Book

Market

Senior Bonds (*)

2,369,048

1,646,390

2,359,540

1,646,390

Perpetual Bond

794,580

444,965

711,150

444,965

 

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

Covenants

 

Long-term financing (excluding perpetual bonds and financing of aircraft) in the total amount of R$4,800,695, as of September 30, 2015 (R$2,749,692 as of December 31, 2014), hold clauses and contratual restrictions, including but not limited to those that require the Company to maintain the liquidity requirements defined  and the cover of expenses with interest.

 

The Company has restrictive covenants in its debenture VI with the following financial institutions: Bradesco and Banco do Brasil, with semi-annual measurements. The indexes analyzed for restrictions measurement are: (i) net debt/EBITDAR below 7.76, and (ii) coverage of debt (CID) of at least 1.56. The mandatory measurement of such indexes, as Issuance Deed, will occur only on March 31, 2016. Therefore, on September 30, 2015, the Company is in compliance with the restrictive clauses of debentures.

 

a)     New loans from the period ended September 30, 2015

 

The Company, during the period ended September 30, 2015, obtained new debt financings, as follow:

 

i.         Import financing (Finimp): the subsidiary VRG raised funds through financing over the period and with promissory note as guarantee. This operation is part of credit line maintened by the Company for import financing in order to purchase spare parts and aircraft equipaments.

 

 

49


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

Acquisition date

Bank

Principal amount (US$)

Principal amount (R$)

Interest rate

Maturity date

23/07/2015

Banco do Brasil

7,822

25,697

3,23% a.a.

18/07/2016

28/07/2015

Banco do Brasil

10,436

35,291

3,22% a.a.

22/07/2016

31/07/2015

Citbank

10,696

36,303

4,71% a.a.

25/07/2016

04/09/2015

Safra

10,534

45,800

4,35% a.a.

29/08/2016

 

ii.       Credit issuance with third party guarantee: on August 31, 2015, the subsidiary Gol Luxco issued a debt in the amount of R$1,191,870 (US$300,000 on acquisition date) and issuance costs of R$48,700 (US$12,258 on acquisition date) through the bank Morgan Stanley, with a term of 5 years and effective interest rate of 6.5% p.a. The Company included the additional third party guarantee (“Backstop Guaranty”) granted by Delta which, in return, according to the agreement, the Company granted to Delta the pledge of commun shares issued by subsidiary Smiles and held by the Company. The evaluation of the guarantee is done by comparing the market value of the shares from Smiles with the updated debt and, if the debt exceeds the market value, the Company is required to make a deposit in guarantee. On September 30, 2015, due to the volatility of the market value of the Smiles, the measurement of the additional guarantee with Delta was R$174,808 (US$44,000 on September 30,2015), which payment occurred on October 30,2015.

 

iii.     Issuance of debentures: on September 30, 2015, the subsidiary VRG issued 105,000 simple debentures, not convertible into shares, from the 6th serie in the amount of R$1,050,000 and issuance costs of R$28,382, which will be settled over the period of the debt. The funds raised were used for the full early settlement at face value of the 4th and 5th series of debentures which, as result, had its costs fully written off in the results.

 

b)    Financial leases

 

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

 

Consolidated

09/30/2015

12/31/2014

2015

157,627

417,149

2016

613,979

399,179

2017

569,483

369,429

2018

560,031

363,110

2019

468,885

302,171

Beyond 2020

1,204,129

698,898

Total minimum lease payments

3,574,134

2,549,936

Less total interest

(439,134)

(325,257)

Present value of minimum lease payments

3,135,000

2,224,679

Less current portion

(504,682)

(325,326)

Noncurrent portion

2,630,318

1,899,353

 

The discount rate used to calculate the present value of the minimum lease payments was 4.95% as of September 30, 2015 (5.00% as of December 31, 2014). There are no significant differences between the present value of minimum lease payments and the fair value of these financial liabilities.

 

The Company extended the maturity date of the financing for some of its aircraft leased for 15 years using the SOAR framework (mechanism for extending financing amortization and repayment), which enables the performance of calculated withdrawals to be settled at the end of the lease agreement. As of September 30, 2015, the withdrawals made for the repayment at maturity date of the lease agreements amount to R$272,864 (R$164,446 as of December 31, 2014) and are recorded in long-term debt.

 

50


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

 

19. Salaries, wages and benefits

 

Individual

Consolidated

09/30/2015

12/31/2014

09/30/2015

12/31/2014

Salaries

-

-

223,968

158,216

INSS and FGTS payable

338

511

53,950

67,189

Profit sharing plan

-

-

6,788

24,984

Others

12

8

5,020

5,051

350

519

289,726

255,440

 

20. Taxes payable

 

 

Individual

Consolidated

 

09/30/2015

12/31/2014

09/30/2015

12/31/2014

PIS and COFINS

622

-

69,774

36,277

Withoholding tax on installments

-

-

1,255

-

Withholding taxes on salaries

1

-

19,506

27,841

ICMS

-

-

38,133

36,212

Tax on import

-

-

3,467

3,467

CIDE

163

-

2,609

1,480

IOF

34

-

33

35

IRPJ and CSLL payable

873

-

-

15,791

Others

79

-

11,260

13,798

1,772

-

146,037

134,901

 

 

 

 

Current

1,772

-

107,585

100,094

Noncurrent

-

-

38,452

34,807

 

On April 1, 2015, the federal government established the increase in PIS/PASED and in COFINS tax rate on interests income from 0% to 4,65% through Decree 8,426/15. Given this fact, the Company began to calculate such taxes in all the interests income incurred from July 1, 2015, including the exchange variation gains. On September 30, 2015, the contributions payable balance was R$16,418.

 

21. Advance ticket sales

 

As of September 30, 2015, the balance of transport to perform classified in current liabilities was R$1,286,418 (R$1,101,611 as of December 31, 2014) and is represented by 5,452,319 coupons tickets sold and not yet used (5,382,145 as of December 31, 2014) with an average use of 55 days (40 days as of December 31, 2014).

 

22. Mileage program

 

As of September 30, 2015, the balance of Smiles deferred revenue is R$235,122 (R$220,212 as of December 31, 2014) and R$708,246 (R$559,506 as of December 31, 2014) classified in the current and noncurrent liabilities, respectively and the number of outstanding miles as of September 30, 2015 amounted to 44,071,914,944 (42,412,047,693 as of December 31, 2014).

 

 

51


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

 

23. Provisions

 

 

Consolidated

 

Insurance provision

Provision for aircraft and engine return of VRG and Webjet (a)

Provision for legal
proceedings (b)

Total

Balance on December 31, 2014

21,916

361,651

102,093

485,660

Additional provisions recognized

4,034

36,433

33,314

73,781

Utilized provisions

(22,487)

(16,610)

(674)

(39,771)

Foreign exchange variation

(1,765)

172,171

2

170,408

Balance on September 30, 2015

1,698

553,645

134,735

690,078

       

As of December 31, 2014

       

Current

21,916

185,178

-

207,094

Noncurrent

-

176,473

102,093

278,566

21,916

361,651

102,093

485,660

       

As of September 30, 2015

 

 

 

 

Current

1,698

314,716

-

316,414

Noncurrent

-

238,929

134,735

373,664

1,698

553,645

134,735

690,078

 

a)     Return of aircraft and engines

 

The returns provisions consider the costs that meet the contractual conditions for the return of engines maintained under operating leases, as well as the costs to reconfigure the aircraft without purchase option, as prescribed in the returns conditions of the lease contracts, and which is capitalized in fixed assets (aircraft reconfigurations/overhauling), as described in Note 16.

 

b)    Provision for legal proceedings

 

As of September 30, 2015 the Company and its subsidiaries are parties to 28,230 (9,002 labor and 19,228 civil) lawsuits and administrative proceedings. The lawsuits and administrative proceedings are classified into Operation (those arising from the Company’s normal course of operations), and Succession (those arising from the succession of former Varig S.A. obligations).

 

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

 

 

Operation

Succession

Total

Civil lawsuits

17,517

239

17,756

Civil proceedings

1,469

3

1,472

Labor lawsuits

5,609

3,191

8,800

Labor proceedings

200

2

202

 

24,795

3,435

28,230

 

The civil lawsuits are primarily related to compensation claims generally related to flight delays and cancellations, baggage loss and damage. The labor claims primarily consist of discussions related to overtime, hazard pay, and wage differences.

 

52


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

The provisions related to civil and labor suits, whose likelihood of loss is assessed as probable are as follows:

 

 

09/30/2015

12/31/2014

Civil

66,338

55,097

Labor

68,397

46,996

 

134,735

102,093

 

Provisions are reviewed based on the progress of the proceedings and history of losses based on the best current estimate for labor and civil lawsuits.

 

There are other civil and labor lawsuits assessed by management and its legal counsel as possible risks, in the estimated amount as of September 30, 2015 of R$16,538 for civil claims and R$21,321 for labor claims (R$15,786 and R$2,341 as of December 31, 2014 respectively), for which no provisions are recognized.

 

On August 2015, the Superior Labor Court (“TST”) declared unconstitutional the monetary adjustments of the labor debts by Reference Rate (“TR”), which was substituded by IPCA-E (the National Index of Price to the Ample), which will be applicable to all litigations in progress as of June 30, 2009 and from the date on.

 

On October 14, 2015, the Federal Supreme Court (STF) granted an injuction suspending the effects of the decision previously communicated by the TST. The Company, along with its internal and external legal advisors, believes that, in the current scenario, the risk of obligation to update the labour claims by IPCA-E is remote. 

 

The tax lawsuits below were evaluated by the Companys’ management and its legal consultants as being relevant and with probable risk as of September 30, 2015:

 

·  GLAI is discussing the non-incidence of taxation of PIS and COFINS on revenues generated by the interest on capital in the amount of R$37,511, related to the years from 2006 to 2008, paid by its subsidiary GTA Transportes Aéreos S.A., succeeded by VRG on September 25, 2008. According to the opinion of the Company’s legal counsel and based on the jurisprudence occurred in recent events, the Company classified this case as possible loss, without a provision registered for the related amount. Additionally, the Company maintains a letter of credit with Bic Banco with a partial guarantee on the lawsuit value of R$19,563 as disclosed in Note 6.

 

·  Tax on Services (ISS), the amount of R$16,543 (R$16,470 as of December, 31 2014) arising from assessment notices issued by the Prefeitura do Município de São Paulo against the Company, in the period from January, 2007 to December, 2010 regarding a possible ISS taxation on partners agreements. The classification of the possible risk stems from the matters under discussion and are interpretative, and involves discussions of factual and evidential materials, and has no final positioning of the Superior Courts.

·  Customs Penalty in the amount of R$19,183 (R$33,956 as of December, 31 2014) relating to assessment notices issued against the Company for alleged breach of customs rules regarding procedures for temporary import of aircraft. The classification of possible risk is a result of the absence of a final positioning of the Superior Courts.

·  BSSF goodwill (BSSF Air Holdings), in the amount of R$44,718 (R$43,246 as of December, 31 2014) related to Infraction notices due to the deductibility of the goodwill allocated to future profitability. The classification of possible risk is a result of the absence of a final positioning of the Superior Courts.

 

53


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

·  VRG’s goodwill in the amount of R$19,215 (R$17,894 as of December, 31 2014) resulted from summons of violation related to the deductibility of the goodwill classified as future payment. The classification of probable risk arises from the absence of a final opinion from the Superior Courts.

 

There are other lawsuits considered by the Company’s management and its legal counsel as possible risk, in the estimated amount of R$136,039 (R$27,538 as of December, 31 2014) which added to the lawsuits mentioned above, amount to R$273,209 as of September 30, 2015 (R$176,854 as of December, 31 2014).

 

24. Stockholders’ equity

 

a)     Issued capital

 

As of September 30, 2015, the amount of the Company’s capital is R$3,080,110, represented by 5,238,421,108 shares, of which 5,035,037,140 are common shares and 203,383,968 are preferred shares. On the Extraordinary General Meeting held on March 23, 2015 was approved the deployment of the Company’s common shares, in the ratio of 1 (one) to 35 (thirty five) shares, without changes in the shareholders’ ratio. The Fundo de Investimento em Participações Volluto is the Company’s controlling fund, which is equally controlled by Constantino de Oliveira Júnior, Henrique Constantino, Joaquim Constantino Neto, and Ricardo Constantino.

 

Shares are held as follows:

 

 

09/30/2015

12/31/2014

 

Common

Preferred

Total

Common

Preferred

Total

Fundo Volluto

100.00%

33.88%

61.28%

100.00%

21.16%

61.22%

Delta Airlines, Inc.

-

16.19%

9.48%

-

5.96%

2.93%

Fidelity Investments

-

-

-

-

5.05%

2.48%

Treasury shares

-

1.05%

0.45%

-

1.50%

0.74%

Other

-

1.33%

0.62%

-

1.33%

0.65%

Free float

-

47.55%

28.17%

-

65.00%

31.98%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

 

The authorized share capital, as of September 30, 2015, was R$4.0 billion. Within the authorized limit, the Company can, once approved by the Board of Directors, increase its capital regardless of any amendment to its bylaws, by issuing shares, without necessarily maintaining the proportion between the different types of shares. Under the law terms, in case of capital increase, the Board of Directors will define the issuance conditions, including pricing and payment terms.

 

On February 3, 2015, the Board of Directors approved the capital increase in the amount of R$90 from subscription of 3,000 common shares from exercise of stock options.

 

On September 4, 2015, the Board of Directors approved the capital increase in the amount of R$461,273 from subscription of 64,065,611 common shares, nominatives, without the nominal value in the price of R$7.20 (seven Reais and twenty cents) per share in favor of Delta Airlines and Volluto Fund shareholders, which cost on issued shares was R$7,589.

 

 

54


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

b)    Dividends

 

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

 

c)     Treasury shares

 

During the period of nine months ends of September 30, 2015, the Company transferred 533,204 restricted shares to its beneficiaries, amounting R$8,301 (62,850 restricted shares in the amount of R$759 as of December 31, 2014), which amount of R$4,323 is related to the difference between average value of the treasury shares and the fair value of the expenses allocated.

 

As of September 30, 2015, the Company holds 1,550,671 treasury shares, totaling R$23,056, with a market value of R$5,691 (2,083,875 treasury shares, totaling R$31,357 in shares with market value of R$31,633 as of December 31, 2014),

 

d)    Share-based payments

 

As of September 30, 2015, the balance of share-based payments reserve was R$99,956 (R$93,763 as of December 31, 2014). The Company recorded a share-based payment expense amounting to R$10,262 related to the Company’s controlling stockholders and R$648 related to its non-controlling stockholders in the period ended September 30, 2015, with a corresponding expense classified as personnel costs under the statement of profit or loss (R$6,219 related to the Company’s controlling stockholders and R$890 related to its non-controlling stockholders as of September 30, 2014).

 

e)     Other comphensive income (losses)

 

The fair value measurement of financial instruments designated as cash flow hedges is recognized as “Other Comphensive Income”, net of tax effects. The balance as of September 30, 2015 corresponds to a net loss of R$209,595 (net loss of R$138,713 as of December 31, 2014) as Note 30.

 

f)     Cost on issued shares

 

As of September 30, 2015 and December, 31 2014, the balance of costs on issued shares was R$44,475 on the parent company and R$157,803 on the consolidated balance.

 

 

55


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

25. Revenue

 

The net revenue has the following breakdown:

 

 

     

 

Consolidated

 

Three-month

period ended on

Nine-month

period ended on

 

09/30/2015

09/30/2014

09/30/2015

09/30/2014

Passenger transportation

2,275,925

2,282,334

6,524,446

6,886,714

Cargo

82,166

82,902

232,558

243,853

Other revenue

284,973

241,776

804,947

630,859

Gross revenue

2,643,064

2,607,012

7,561,951

7,761,426

 

 

 

 

 

Related taxes

(153,419)

(145,320)

(436,001)

(425,046)

Net revenue

2,489,645

2,461,692

7,125,950

7,336,380

 

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

 

Revenue by geographical segment is as follows:

 

 

Consolidated

 

Three-month

period ended on

Nine-month

period ended on

 

09/30/2015

%

09/30/2014

%

09/30/2015

%

09/30/2014

%

Domestic

2,143,211

86.1

2,151,149

87.4

6,317,285

88.7

6,436,281

87.8

International

346,434

13.9

310,543

12.6

808,665

11.3

900,099

12.2

Net revenue

2,489,645

100.0

2,461,692

100.0

7,125,950

100.0

7,336,380

100.0

 

 

26. Costs of services, administrative and selling expenses

 

 

Individual

 

Three-month

period ended on

Nine-month

period ended on

 

09/30/2015

09/30/2014

09/30/2015

09/30/2014

 

Total

%

Total

%

Total

%

Total

%

Salaries (a)

(1,068)

24.3

(2,438)

64.1

(4,018)

(50.5)

(5,383)

(8.4)

Services rendered

(2,145)

48.7

(1,128)

29.7

(4,260)

(53.6)

(4,998)

(7.8)

Sale-leaseback transactions (b)

(1,630)

37.0

(1,153)

30.3

16,523

207.8

73,920

115.9

Other operating expenses

440

(10.0)

915

(24.1)

(295)

(3.7)

227

(0.4)

 

(4,403)

100.0

(3,804)

100.0

7,950

100.0

63,766

100.0

 

 

56


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

Consolidated

 

Three-month period ended on:

09/30/2015

 

 

Cost of services

 

Selling expenses

 

Administrative expenses

Other operating income

 

 

Total

 

 

%

Salaries (a)

(313,951)

(13,928)

(62,923)

-

(390,802)

15.8

Aircraft Fuel

(822,684)

-

-

-

(822,684)

33.2

Aircraft rents

(263,625)

-

(312)

-

(263,937)

10.6

Aircraft insurance

(8,577)

-

-

-

(8,577)

0.3

Maintenance, materials and repairs

(119,386)

-

(3,012)

-

(122,398)

4.9

Traffic services

(114,550)

(84,206)

(62,275)

-

(261,031)

10.5

Sales and marketing

-

(178,948)

3,910

-

(175,038)

7.1

Landing fees

(171,489)

-

(23)

-

(171,512)

6.9

Depreciation and amortization

(100,489)

-

(4,253)

-

(104,742)

4.2

Sale-leaseback transactions (b)

-

-

-

(1,630)

(1,630)

0.1

Other, net

(104,250)

(14,296)

(39,163)

-

(157,709)

6.4

(2,019,001)

(291,378)

(168,051)

(1,630)

(2,480,060)

100.0

 

 

Consolidated

 

Three-month period ended on:

09/30/2014

 

Cost of services

 

Selling expenses

 

Administrative expenses

Other operating income

 

 

Total

 

 

%

Salaries (a)

(287,065)

(12,617)

(57,931)

-

(357,613)

15.5

Aircraft Fuel

(931,592)

-

-

-

(931,592)

40.3

Aircraft rents

(201,174)

-

-

-

(201,174)

8.7

Aircraft insurance

(6,417)

-

-

-

(6,417)

0.3

Maintenance, materials and repairs

(109,963)

-

-

-

(109,963)

4.8

Traffic services

(87,812)

(27,494)

(60,423)

-

(175,729)

7.6

Sales and marketing

-

(145,138)

(239)

-

(145,377)

6.3

Landing fees

(154,425)

-

-

-

(154,425)

6.7

Depreciation and amortization

(93,236)

(3)

(16,383)

-

(109,622)

4.7

Sale-leaseback transactions (b)

-

-

-

(1,153)

(1,153)

0.1

Other, net

(98,030)

(8,052)

(9,824)

-

(115,906)

5.0

(1,969,714)

(193,304)

(144,800)

(1,153)

(2,308,971)

100.0

 

 

 

57


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

 

Consolidated

 

Nine-month period ended on:

09/30/2015

 

Cost of services

 

Selling expenses

 

Administrative expenses

Other operating income

 

 

Total

 

 

%

Salaries (a)

(984,601)

(43,082)

(167,913)

-

(1,195,596)

16.6

Aircraft Fuel

(2,431,047)

-

-

-

(2,431,047)

33.7

Aircraft rents

(722,613)

-

(312)

-

(722,925)

10.0

Aircraft insurance

(21,543)

-

-

-

(21,543)

0.3

Maintenance, materials and repairs

(393,067)

-

(3,014)

-

(396,081)

5.5

Traffic services

(327,344)

(199,914)

(210,379)

-

(737,637)

10.2

Sales and marketing

-

(449,272)

3,570

-

(445,702)

6.2

Landing fees

(502,362)

-

(23)

-

(502,385)

7.0

Depreciation and amortization

(267,747)

-

(34,898)

-

(302,645)

4.2

Sale-leaseback transactions (b)

-

-

-

16,523

16,523

(0.2)

Other, net

(324,855)

(40,398)

(106,725)

-

(471,978)

6.5

(5,975,179)

(732,666)

(519,694)

16,523

(7,211,016)

100.0

 

 

 

 

Consolidated

 

Nine-month period ended on:

09/30/2014

 

Cost of services

 

Selling expenses

 

Administrative expenses

Other operating income

 

 

Total

 

 

%

Salaries (a)

(846,751)

(35,996)

(149,294)

-

(1,032,041)

14.7

Aircraft Fuel

(2,850,956)

-

-

-

(2,850,956)

40.7

Aircraft rents

(627,169)

-

-

-

(627,169)

9.0

Aircraft insurance

(16,078)

-

-

-

(16,078)

0.2

Maintenance, materials and repairs

(337,896)

-

(2)

-

(337,898)

4.8

Traffic services

(263,727)

(92,057)

(187,814)

-

(543,598)

7.8

Sales and marketing

-

(467,033)

(581)

-

(467,614)

6.7

Landing fees

(448,237)

-

-

-

(448,237)

6.4

Depreciation and amortization

(322,463)

(3)

(46,717)

-

(369,183)

5.2

Sale-leaseback transactions (b)

-

-

-

73,920

73,920

(1.1)

Other, net

(274,159)

(23,615)

(83,326)

-

(381,100)

5.6

(5,987,436)

(618,704)

(467,734)

73,920

(6,999,954)

100.0

                       

 

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

(b)    The amount of R$16,523 (R$73,920 as of September 30, 2014) comprises the gains fully recognized and deferred losses from sale-leaseback transactions of 4 aircraft during the period ended September 30, 2015 (9 aircraft for the period ended September 30, 2014).

 

 

58


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

27. Financial income (expense)

 

 

Individual

Three-month

period ended on

Nine-month

period ended on

09/30/2015

09/30/2014

09/30/2015

09/30/2014

Financial income

 

  

  

   

Gains from derivatives

 

 

 

  

Income from short-term investments and investment funds

1,823

1,318

4,830

4,786

Monetary variation

635

508

1,851

1,733

Other

4,455

91

5,166

4,024

6,913

1,917

11,847

10,543

Financial expenses

 

 

 

  

Losses from derivatives

-

(49)

-

(15,901)

Interest on short and long-term debt

(72,483)

(38,595)

(182,639)

(131,032)

Bank interest and expenses

(1,993)

(1,553)

(5,496)

(2,242)

Other

(1,714)

(60,787)

(5,219)

(61,683)

(76,190)

(100,984)

(193,354)

(210,858)

 

 

 

 

Foreign exchange variation, net

(634,932)

(152,420)

(909,465)

(28,086)

 

 

 

 

Total

(704,209)

(251,487)

(1,090,972)

(228,401)

 

 

 

 

Consolidated

Three-month

period ended on

Nine-month

period ended on

09/30/2015

09/30/2014

09/30/2015

09/30/2014

Financial income

 

 

 

 

Gains from derivatives

48,290

74,398

151,672

164,153

Income from short-term investments and investment funds

50,974

30,175

140,537

97,705

Monetary variation

2,321

11,421

11,716

15,906

Other

(39,706)

2,554

(32,287)

11,848

61,879

118,548

271,638

289,612

Financial expenses

 

 

 

Losses from derivatives

(41,280)

(40,026)

(83,613)

(300,952)

Interest on short and long-term debt

(226,661)

(150,056)

(585,430)

(426,060)

Bank interest and expenses

(20,155)

(5,253)

(38,506)

(16,615)

Monetary variation

(966)

(796)

(3,024)

(2,906)

Other

(34,772)

(76,165)

(104,597)

(104,182)

(323,834)

(272,296)

(815,170)

(850,715)

 

 

 

 

Foreign exchange variation, net

(1,440,615)

(281,135)

(2,009,109)

(173,257)

 

 

 

 

Total

(1,702,570)

(434,883)

(2,552,641)

(734,360)

         

 

59


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

28. Operating segment

 

Operating segments are defined as business activities from which it may earn revenues and incur expenses, which operating results are regularly reviewed by the relevant decision makers to evaluate performance and allocate resources to the segments. The Company holds two operating segments: the airline industry and the loyalty program.

 

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

 

The Company is the majority shareholder of the subsidiary Smiles, being the non-controlling portion on its capital of 45.9% and 45.7% as of September 30, 2015 and December, 31 2014, respectively.

 

The information as follow presents the summarized financial position related to reportable segments for the period ended September 30, 2015 and December 31, 2014:

 

a)     Assets and liabilities of the operational segment

 

 

 

09/30/2015

Flight
transportation

Smiles loyalty
program

Combined information

Eliminations

Total consolidated

Assets

 

 

     

Current

3,072,995

1,204,420

4,277,415

(685,727)

3,591,688

Noncurrent

7,589,664

382,190

7,971,854

(439,469)

7,532,385

Total assets

10,662,659

1,586,610

12,249,269

(1,125,196)

11,124,073

 

 

 

 

Liabilities

 

 

 

 

Current

5,349,479

495,134

5,844,613

(874,307)

4,970,306

Noncurrent

8,714,528

627,628

9,342,156

-

9,342,156

Stockholder’s equity

(3,401,348)

463,848

(2,937,500)

(250,889)

(3,188,389)

Total liabilities and stockholder’s equity

10,662,659

1,586,610

12,249,269

(1,125,196)

11,124,073

 

 

12/31/2014

 

Flight
transportation

Smiles loyalty
program

Combined information

Eliminations

Total consolidated

Assets

 

       

Current

2,783,212

734,355

3,517,567

(531,369)

2,986,198

Noncurrent

7,061,616

832,848

7,894,464

(904,015)

6,990,449

Total assets

9,844,828

1,567,203

11,412,031

(1,435,384)

9,976,647

 

 

 

 

 

Liabilities

 

 

 

 

 

Current

3,992,760

708,292

4,701,052

(488,406)

4,212,646

Noncurrent

6,370,455

452,874

6,823,329

(726,354)

6,096,975

Stockholder’s equity

(518,387)

406,037

(112,350)

(220,624)

(332,974)

Total liabilities and stockholder’s equity

9,844,828

1,567,203

11,412,031

(1,435,384)

9,976,647

 

  

60


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

b)    Income and expenses of the operational segment

 

 

09/30/2015

 

Fligh

transportation

Smiles loyalty

Program

Combined

information

Eliminations

Total consolidated

Net revenue

   

 

 

 

Passenger

6,064,149

-

6,064,149

193,047

6,257,196

Cargo and other

700,923

21,476

722,399

(15,730)

706,669

Miles redeemed revenue

-

849,083

849,083

(686,998)

162,085

Costs

(5,975,179)

(476,178)

(6,451,357)

476,178

(5,975,179)

Net income

789,893

394,381

1,184,274

(33,5023

1,150,771

 

 

 

 

 

Operating expenses

 

 

 

 

 

Sales and marketing

(640,573)

(61,525)

(702,098)

(30,568)

(732,666)

Administrative expenses

(514,221)

(27,824)

(542,045)

22,351

(519,694)

Other operating revenue, net

16,523

-

16,523

-

16,523

(1,138,271)

(89,349)

(1,227,620)

(8,217)

(1,235,837)

 

 

 

 

 

Equity results

112,932

(4,311)

108,621

(111,990)

(3,369)

 

 

 

 

 

Finance result

 

 

 

 

 

Financial income

242,918

115,864

358,782

(87,144)

271,638

Financial expense

(887,388)

(14,926)

(902,314)

87,144

(815,170)

Exchange rate changes, net

(1,997,672)

(11,437)

(2,009,109)

-

(2,009,109)

 

 

 

 

 

Income (loss) before income tax and social contribution

(2,877,588)

390,222

(2,487,366)

(153,710)

(2,641,076)

 

 

 

 

 

Current and deferred income tax and social contribution

(401,692)

(132,622)

(534,314)

14,184

(520,130)

Total income (loss), net

(3,279,280)

257,600

(3,021,680)

(139,526)

(3,161,206)

 

 

 

 

 

 

Attributable to Company’ stockholders

-

-

-

-

(3,279,280)

Attributable to non-controlling stockholders

-

-

-

-

118,074

           

 

61


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

 

09/30/2014

 

Fligh

transportation

Smiles loyalty

Program

Combined

information

Eliminations

Total consolidated

Net revenue

   

 

 

 

Passenger (a)

6.490.881

-

6.490.881

114.165

6.605.046

Cargo and other (a)

672.241

-

672,241

(13.554)

658,687

Miles redeemed revenue (a)

-

564,227

564,227

(491.580)

72,647

Costs (b)

(5.987.435)

(308,569)

(6.296.004)

308.568

(5.987.436)

Net income

1.175.687

255.658

1.431.345

(82.401)

1.348.944

 

 

 

 

 

Equity results

100.896

(2.170)

98.726

(100.896)

(2.170)

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

Sales and marketing

(638.206)

(44.647)

(682.853)

64.149

(618.704)

Administrative expenses

(447.452)

(23.886)

(471.338)

3.604

(467.734)

Other operating revenue, net

73.920

-

73.920

-

73.920

 

 

 

 

 

Finance result

 

 

 

 

 

Financial income

262.534

140.439

402.973

(113.361)

289.612

Financial expense

(947.565)

(16.510)

(964.075)

113.360

(850.715)

Exchange rate changes, net

(172.077)

(1.180)

(173.257)

-

(173.257)

 

 

 

 

 

Income (loss) before income tax and social contribution

(592.263)

307.704

(284.559)

(115.545)

(400.104)

 

 

 

 

 

Current and deferred income tax and social contribution

14.510

(105.640)

(91.130)

4.980

(86.150)

Total income (loss), net

(577.753)

202.064

(375.689)

(110.565)

(486.254)

 

 

 

 

 

 

Attributable to Company’ stockholders

-

-

-

-

(577.754)

Attributable to non-controlling stockholders

-

-

-

-

91.500

 

(a)  The eliminations from operating entries are fully represented by transactions between VRG and Smiles.

(b)  Include charges for depreciation and amortization totaling R$302,645 allocated for each operating segment as follows: R$300,861 in flight transportation segment and R$1,784 in Loyalty Program Segment (R$367,094 and R$2,089 respectively on September 30, 2015)

 

In the individual Interim Financial Information of the subsidiary Smiles, which represents the segment Smiles Loyalty Program and in the information provided to the relevant decision makers, the revenue recognition occurs upon redemption of the miles by the participants. Under this perspective, this measurement is appropriate given that this is when the revenue recognition cycle is complete. At this point, Smiles has transferred to its suppliers the obligation to provide services or deliver products to its customers.

 

However, from a consolidated perspective, the revenue recognition cycle related to miles exchanged for flight tickets is only complete when the passengers are effectively transported. Therefore, for purposes of reconciliation with the consolidated assets, liabilities and results, as well as for purposes of equity method of accounting and for consolidation purposes, the Company performed, besides eliminations entries, consolidating adjustments to adjust the accounting practices related to Smiles’ revenues. In this case, under the perspective of the consolidated Interim Financial Information, the miles that were used to redeem airline tickets are only recognized as revenue when passengers are transported, in accordance with accounting practices and policies adopted by the Company.

 

62


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

29. Commitments

 

As of September 30, 2015 the Company holds 126 firm orders for aircraft acquisitions with Boeing. These aircraft acquisition commitments include estimates for contractual price increases during the construction phase. The approximate amount of firm orders, not including the contractual discounts, is R$57,679,441 (corresponding to US$14,518,221 at the reporting date) and are segregated according to the following years:

 

09/30/2015

12/31/2014

2015

665,997

1,323,818

2016

2,071,720

1,385,110

2017

3,189,957

2,132,740

2018

2,178,858

1,456,740

2019

6,678,858

4,465,348

Beyond 2019

42,894,051

28,678,089

57,679,441

39,441,845

 

As of September 30, 2015, from the total orders mentioned above, the Company holds the amount of R$7,645,843 (corresponding to US$1,924,499 at the reporting date) related to advances for aircraft acquisition, to be disbursed in accordance with the following schedule:

 

09/30/2015

12/31/2014

2015

162,910

289,945

2016

230,662

154,216

2017

400,697

267,898

2018

973,891

651,124

2019

1,039,455

694,958

Beyond 2019

4,838,228

3,234,741

7,645,843

5,292,882

 

The installment financed by long-term debt with aircraft guarantee through the U.S. Ex-Im Bank corresponds approximately to 85% of the aircraft total cost. Other establishments finance the acquisitions with equal or higher percentages, reaching up to 100%.

 

The Company performs payments related to aircraft acquisition through its own funds, short and long-term debt, cash provided by operating activities, short and medium-term line of credit and supplier financing.

 

The Company leases its entire aircraft fleet through a combination of operational and financial leases. As of September 30, 2015, the total fleet leased was comprised of 144 aircraft, of which 98 were under operating leases and 46 were recorded as financial leases. The Company holds 40 aircraft under financial leasing with purchase option. During the period ended September 30, 2015, the Company received 2 aircraft and did not return any aircraft under operating lease contracts.

 

 

63


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

a)     Operating leases

 

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

 

09/30/2015

12/31/2014

2015

402,365

785,052

2016

1,164,331

697,744

2017

1,072,179

632,899

2018

930,564

539,329

2019

858,234

482,752

Beyond 2019

3,140,831

1,657,034

Total minimum lease payments

7,568,504

4,794,810

 

b)    Sale-leaseback transactions

 

The Company, during the years 2006 to 2009, recorded gains and losses from sale-leaseback transactions of 4 aircraft 737-800 Next Generation. These gains and losses were deferred, and are being amortized proportionally to the payments of the operational lease agreements over the contract term of 120 months. The amounts registered during the period ended September 30, 2015 and December 31, 2014 are as follows:

 

 

Prepaid expenses

Other liabilities

 

Current

Noncurrent

Current

Noncurrent

 

09/30/2015

12/31/2014

09/30/2015

12/31/2014

09/30/2015

12/31/2014

09/30/2015

12/31/2014

Deferred losses (*)

8,253

8,280

12,063

18,245

-

-

-

-

Deferred gains (**)

-

-

-

-

1,783

1,783

-

1,337

 

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

(**) Related to 11 aircraft from transactions from 2006 to 2009, see Note 10.

 

Additionally, during the period ended on September 30, 2015, the Company recorded a net gain of R$21,396 resulting from 4 aircraft received during the period (R$73,920 related to 9 aircraft received during the period ended September 30, 2014) that were used as sale-leaseback transactions and resulted in operating leases. Given that the gains and losses from sale-leaseback transactions will not be offset against future lease payments and were negotiated at fair value, such gain was recognized directly in profit or loss.

 

30. Financial instruments and risks management

 

The Company and its subsidiaries have financial asset and financial liability transactions, which consist in part of derivative financial instruments.

 

The financial derivative instruments are used to hedge against the inherent risks related to the Company operations. The Company and its subsidiaries consider as most relevant risks: fuel price, exchange rate and interest rate. These risks can be mitigated by using exchange swap derivatives, futures and options contracts based on oil, U.S. Dollar and interest markets. The contracts may be held by means of exclusive investment funds, as described in the Risk Management Policy of the Company.

 

The Management follows a documented guideline when managing its financial instruments, set out in its Risk Management Policy, which is periodically revised by the Risk Committee (CPR), and approved by the Board of Directors. The Committee sets the guidelines and limits, monitors controls, including the mathematical models adopted for a continuous monitoring of exposures and possible financial effects and also prevents the execution of speculative financial instruments transactions.

 

64


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

The gains or losses on these transactions and the application of risk management controls are part of the Committee’s monitoring and have been satisfactory when considering the objectives proposed.

 

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

 

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

 

The description of the consolidated account balances and the categories of financial instruments included in the statements of financial position as of September 30, 2015 and December 31, 2014 is as follows:

 

Measured at fair value through profit or loss

Measured at amortized cost

09/30/2015

12/31/2014

09/30/2015

12/31/2014

Assets

 

 

 

 

Cash and cash equivalents

2,161,158

1,796,605

291,737

102,168

Short-term investments (a)

63,451

287,148

129,490

9,676

Restricted cash

427,459

273,247

-

58,303

Derivatives operations assets (b)

38,702

18,846

-

-

Accounts receivable

-

-

478,789

352,284

Deposits (c)

-

-

659,190

526,822

Other credits

-

-

71,041

65,120

 

 

 

 

Liabilities

 

 

 

 

Loans and financing (d)

-

-

9,489,147

6,235,239

Suppliers

-

-

681,967

686,151

Derivatives obligations (b)

181,660

85,366

-

-

 

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

(b)    The Company registered as of September 30, 2015 the amount net of R$209,595, net of tax effects (R$138,713 as of December 31, 2014) in equity as an equity valuation resulting from these assets and liabilities, as explained in Note 24.

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

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

 

As of September 30, 2015 the Company had no financial assets available for sale.

 

Risks

 

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

 

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

 

 

65


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

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

 

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

 

a)     Fuel price risk

 

As of September 30, 2015, fuel expenses accounted for 33.7% of the costs and operating expenses of the Company. The aircraft fuel price fluctuates both in the short and in the long term, in line with crude oil and oil byproduct price fluctuations.

 

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

 

b)     Exchange rate risk

 

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

 

The Company’s revenues are mainly denominated in Brazilian Reais, except for a small portion in U.S. Dollar, Argentinean Pesos, Bolivian Bolivianos, Chilean Peso, Colombian Peso, Paraguay Guarani, Uruguayan Peso, Venezuela Bolivar etc.

 

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

 

The currency exposure of the Company on September 30, 2015 and December 31, 2014 is shown below:

 

 

66


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

 

Individual

Consolidated

09/30/2015

12/31/2014

09/30/2015

12/31/2014

Assets

       

Cash and short-term investments

1,077,354

457,902

1,882,328

1,002,068

Trade receivables

-

-

57,104

35,095

Deposits

-

-

659,190

526,822

Prepaid expenses with leases

-

-

49,165

44,093

Result from hedge operations

-

-

38,702

18,846

Others

36

-

7,083

9,572

Total assets

1,077,390

457,902

2,693,572

1,636,496

 

 

 

 

Liabilities

 

 

 

 

Foreign suppliers

1,604

-

112,961

69,733

Short and long-term debt

4,380,808

2,154,828

5,097,819

2,445,291

Finance leases payable

-

-

3,135,001

2,224,679

Other leases payable

-

-

88,840

56,837

Provision for aircraft return

-

-

553,645

361,651

Contingency provision

-

-

-

227

Related parties

26,146

151,408

-

-

Total liabilities

4,408,558

2,306,236

8,988,266

5,158,418

Exchange exposure in R$

3,331,168

1,848,334

6,294,694

3,521,923

 

 

 

 

Obligations not registered in the statements of financial position

 

 

 

 

Future obligations resulting from operating leases

-

-

7,568,504

4,794,810

Future obligations resulting from firm aircraft orders

57,679,441

39,441,845

57,679,441

39,441,845

Total

57,679,441

39,441,845

65,247,945

44,236,655

 

 

 

 

Total exchange exposure R$

61,010,609

41,290,179

71,542,639

47,797,203

Total exchange exposure US$

15,356,694

15,544,831

18,007,662

17,994,580

Exchange rate (R$/US$)

3.9729

2.6562

3.9729

2.6562

 

c)     Interest rate risk

 

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

 

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

 

d)     Credit risk

 

The credit risk is inherent in the Company’s operating and financing activities, mainly represented by trade receivables, cash and cash equivalents, and short-term investments.

 

The trade receivable credit risk consists of amounts falling due from the largest credit card companies, with credit risk better than or equal to those of the Company and its subsidiaries, and receivables from travel agencies, installment sales, and government sales, with a small portion exposed to risks from individuals or other entities.

 

 

67


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

As defined in the Risk Management Policy, the Company is required to evaluate the counterparty risks in financial instruments and diversify the exposure. Financial instruments are contracted with counterparties rated at least as investment grade by S&P and Moody’s. The financial instruments are mostly contracted on commodities and futures exchanges (BM&FBOVESPA and NYMEX), which substantially mitigate the credit risks, derivative transactions contracted on the OTC market (OTC) have counterparts with a minimum rating of "investment grade". The Company’s Risk Management Policy establishes a maximum limit of 20% per counterparty for short-term investments.

 

e)     Liquidity risk

 

Liquidity risk takes on two distinct forms: market and cash flow liquidity risk. The first is related to current market prices and varies in accordance with the types of assets and the markets where they are traded. Cash flow liquidity risk, however, is related to difficulties in meeting the contracted operating obligations at the agreed dates.

 

As a way of managing the liquidity risk, the Company invests its funds in liquid assets (governmental bonds, CDBs, and investment funds with daily liquidity), and the Cash Management Policy establishes that the Company’s and its subsidiaries’ weighted average debt maturity should be higher than the weighted average maturity of the investment portfolio. As of September 30, 2015, the weighted average maturity of the Company’s financial assets was 33 days and of financial debt, excluding perpetual bonds, was 3.6 years.

 

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

 

As of September 30, 2015

Immediate

Less than 6 months

6 a 12 months

1 a 5

years

Up to

5 years

Total

Short and long-term debt

115,898

488,914

79,849

2,164,124

6,640,362

9,489,147

Suppliers

265,245

376,710

40,012

-

-

681,967

Salaries, wages and benefits

86,158

120,821

82,747

-

-

289,726

Taxes payable

-

107,585

-

38,452

-

146,037

Taxes and landing fees

-

335,180

-

-

-

335,180

Liabilities from derivative transactions

-

181,660

-

-

-

181,660

Provisions

-

292,408

24,005

272,724

100,941

690,078

Other liabilities

32,245

51,592

45,144

54,489

25,141

208,611

 

499,546

1,954,870

271,757

2,529,789

6,766,444

12,022,406

 

f)      Capital management

 

The Company seeks alternatives to capital in order to meet its operational needs, aiming a capital structure that takes into account suiltable parameters for the financial costs, the maturities of fundings and its guarantees.

 

The Company monitors its financial leverage ratio, which corresponds to net debt, including short and long-term debt divided by total capital.

 

The table as follow shows the financial leverage rate as of September 30, 2015 and December 31, 2014:

 

 

68


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

Consolidated

09/30/2015

12/31/2014

A – Short and long-term debts

9,489,147

6,235,239

B – (-) Cash and cash equivalents

(2,452,895)

(1,898,773)

B – (-) Short-term investments

(192,941)

(296,824)

B – (-) Restricted cash

(427,459)

(331,550)

C = (A - B) – Net debt

6,415,852

3,708,092

D – (Deficit) stockholder’s equity

(3,188,389)

(332,974)

E = (C + D) – Total Capital

3,227,463

3,375,118

C / D = Leverage ratio

201%

1.114%

 

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

 

Derivative financial instruments

 

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

 

Movement of assets and liabilities

Fuel

Foreign currency

Interest rate

Total

 

 

 

 

Asset (liability) as of December 31, 2014

19

15,134

(81,673)

(66,520)

Fair value variations:

 

 

 

 

Net losses recognized in profit or loss

491

104,391

1

104,883

Losses recognized in

other comprehensive income

(30,748)

-

(123,410)

(154,158)

Payments (cash receipts) during the period

20,579

(80,823)

33,081

(27,163)

Asset (liability) as of September 30, 2015 (*)

(9,659)

38,702

(172,001)

(142,958)

 

 

 

 

 

 

Movement of other comprehensive results

Fuel

Foreign

currency

Interest rate

Total

 

 

 

 

Balance as of December 31, 2014

168

-

(138,881)

(138,713)

Fair value adjustments during the period

(30,748)

-

(123,410)

(154,158)

Reversal, net to profit or loss (b)

20,816

-

25,944

46,760

Tax effect

3,378

-

33,138

36,516

Balance as of September 30, 2015

(6,386)

-

(203,209)

(209,595)

 

 

 

 

Effects on result (a+b)

(20,325)

104,391

(25,943)

58,123

 

 

 

 

Operational income

-

-

(9,936)

(9,936)

Financial income (expense)

(20,325)

104,391

(16,007)

68,059

 

(*)  Classified as "Rights with derivative operations" if the amount results in an asset or "Obligation with derivative operations" if the amount results in a liability. Includes R$4,520 of assets related to hedges held in an exclusive fund.

 

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

 

 

69


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

Classification of derivatives financial instruments

 

               i.        Cash flow hedges

 

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

 

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

 

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

 

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

 

              ii.        Derivative financial instruments not designated as hedge

 

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

 

Hedge activities

 

a)      Fuel hedge

 

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

 

The gains and losses from the derivative contracts for the years ended September 30, 2015 and December 31, 2014 are summarized below:

 

Closing balance on

09/30/2015

12/31/2014

Fair value at end of the period (R$)

(9,659)

-

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

(6,386)

168

 

Period ended on

09/30/2015

12/31/2014

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

(20,325)

(189,078)

Total gains (losses) (R$)

(20,325)

(189,078)

 

 

70


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

Closing balance on

09/30/2015

12/31/2014

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

-

19

Losses recognized in financial expense (R$)

(5)

(181,118)

 

Closing balance on

09/30/2015

12/31/2014

Volume hedged for future periods (Thousand barrels)

219

651

Volume engaged for future periods (Thousand barrels)

350

945

 

 

4Q15

1Q16

2Q16

3Q16

Total 12M

Percentage of fuel exposure hedged

9%

0%

0%

0%

2%

Amount agreed in barrels (thousands barrels)

350

-

-

-

350

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

71.25

-

-

-

71.25

Total in Brazilian Reais (**)

99,074

-

-

-

99,074

           

 

(*)    Weighted average between call strikes.

(**)  The exchange rate: R$3.9729/US$1.00.

 

b)      Foreign exchange hedge

 

As of September 30, 2015, the Company and its subsidiaries have future derivative contracts for the U.S. Dollar for foreign exchange cash flow protection, not designated as hedge accounting. The losses and gains of the derivatives, for the periods ended on September 30, 2015 and December 31, 2014, are presented below:

 

 

 

09/30/2015

12/31/2014

Fair value at the end of period (R$)

38,702

15,134

Volume hedged for future periods (US$)

15,750

107,000

 

Period ended on

09/30/2015

12/31/2014

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

104,391

(24,722)

 

 

 

3Q15

4Q15

1Q16

Total 12M

Percentage of cash flow exposure

3%

0%

0%

1%

Notional amount (US$)

15,750

-

-

15,750

Future rate agreed (R$)

3.0810

-

-

3.0810

Total in Brazilian Reais

48,526

-

-

48,526

 

c)      Interest rate hedges

 

As of September 30, 2015, the Company and its subsidiaries have swap derivatives designated as cash flow hedge for Libor interest rate. The summary of interest rate derivatives designated as Libor cash flow hedges is shown as follow:

 

Closing balance at

09/30/2015

12/31/2014

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

(172,001)

(81,673)

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

546,214

591,150

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

(203,209)

(138,881)

 

 

71


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

 

 

 

Period ended on

09/30/2015

12/31/2014

Losses recognized in financial expense (R$)

(16,007)

(48,412)

Losses recognized as operational costs (R$)

(9,936)

(13,093)

Total losses

(25,943)

(61,505)

 

As of September 30, 2015 the Company’s position in Libor interest derivative agreements not designated for hedge accounting.

 

Sensitivity analysis of derivative financial instruments

 

The sensitivity analysis of financial instruments was prepared according to CVM Instruction 475/08, in order to estimate the impact on the fair value of financial instruments operated by the Company, considering three scenarios considered in the risk variable: most likely scenario, the assessment of the Company; deterioration of 25% (possible adverse scenario) in the risk variable, deterioration 50% (remote adverse scenario).

 

The estimates presented, since they are based on simple statistics, do not necessarily reflect the amounts to be reported in the next Interim Financial Information. The use of different methodologies and/ or assumptions may have a material effect on the estimates presented.

 

The tables below show the sensitivity analysis for market risks and financial instruments considered relevant by management, open position as of September 30, 2015 and based on the scenarios described above.

 

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

 

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

 

Individual

 

i)      Foreign exchange risk

 

As of September 30, 2015, the Company has a currency exposure of R$3,331,168 (see Note 30). On this date, the exchange rate adopted was R$3.9729/US$, corresponding to the closing rate of the month published by Banco Central do Brasil as a likely scenario, and the impacts analyzed from the variation of 25% and 50% over the current rate are shown as follow:

 

 

 

 

Instrument

 

 

 

Risk

 

 

Exposed

amount

Likely

Possible adverse

scenario

Remote adverse

scenario

scenario

+ 25%

+ 50%

Liabilities, net

Dollar Appreciation

(3,331,168)

-

(832,792)*

(1,665,584)*

 

 

 

 

 

 

 

 

Dollar

 

4.9661

5.9594

 

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

 

72


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

           

Consolidated

 

i)      Fuel risk factor

 

As of September 30, 2015, the Company holds oil derivative contracts amounting 350 thousand barrels maturiting on June, 2015. The likely scenario is the market curve for the Heating Oil, which amounted as of September 30, 2015, US$63.08/bbl.

 

Risk

Exposed

amount

Adverse Scenario Remote

Possible Adverse Scenario

-50%

-25%

Decrease on the market prices

(9,659)

(1,562)

(800)

 

 

 

 

 

Heating Oil

24.16

32.28

 

ii)     Foreign exchange risk factor

 

As of September 30, 2015, the Company holds Dollar derivative contracts with a notional value of US$78,000 with maturity until November, 2015, and a net exchange exposure liability of R$6,294,694 (see Note 30). At the current date, the Company adopted the closing exchange rate of R$3.9729/US$ as a likely scenario, and the impact of the change of 25% and 50% over the current rate, is shown below:

 

 

Instruments

Exposed

amount

-50%

-25%

+ 25%

+50%

R$1.6040/USD

R$2.4060/USD

R$4.0100/USD

R$4.8120/USD

Liabilities, net

(6,294,694)

3,147,347

1,573,674

(1,573,674)*

(3,147,347)*

Derivative

38,702

(84,978)*

(42,489)*

42,489

84,978

 

(6,255,992)

3,062,369

1,531,185

(1,531,185)*

(3,062,369)*

 

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

 

III)    Interest risk factor

 

As of September 30, 2015, the Company holds financial investments and liabilities indexed to several rates, and Libor interest.

 

In the sensitivity analysis of non-derivative financial instruments it was considered the impacts on yearly interest of the exposed values as of September 30, 2015 (see Note 18), arising from fluctuations in interest rates according to the scenarios presented below:

 

Instruments

Risk

Exposed

amount

Possible Adverse Scenario

Adverse Scenario Remote

25%

50%

Financial investments -

Short and Long-term debt, net (*)

Increase in the CDI rate

(75,093)

(17,068)

(34,136)

Derivative

Decrease in the Libor rate

(172,001)

(87,069)

(174,341)

 

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

 

73


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

Measurement of the fair value of financial instruments

 

In order to comply with the disclosure requirements for financial instruments measured at fair value, the Company and its subsidiaries must classify its instruments in Levels 1 to 3, based on observable fair value levels:

 

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

 

b)        Level 2: Fair value measurements are calculated based on other variables besides quoted prices included in Level 1, that are observable for the asset or liability directly (such as prices) or indirectly (derived from prices); and

 

c)        Level 3: Fair value measurements are calculated based on valuation methods that include the asset or liability but that are not based on observable market variables (unobservable inputs).

 

The following table shows a summary of the Company’s and its subsidiaries’ financial instruments measured at fair value, including their related classifications of the valuation method, as of September 30, 2015 and December 31, 2014:

 

 

09/30/2015

12/31/2014

 

 

Financial instrument

 

Book value

03/31/2015

Other significant observable factors (level 2)

 

Book value

12/31/2014

Other significant observable factors (level 2)

Rights on derivative transactions

38,702

38,702

18,846

18,846

Liabilities from derivative transactions

(181,660)

(181,660)

(85,366)

(85,366)

 

31. Non-cash transactions

 

Consolidated

 

As of September 30, 2015, the Company increased its property, plant and equipment in the amount of R$295,297, of which R$36,433 is related to an increase of the provision for aircraft return, R$113,377 refers to financing by FINIMP and R$145,187 is related to aircraft acquisition by financial leases.

 

As of September 30, 2015, the Company reduced its supplier payables balance throught acquisition of loan in the amount of R$113,377.

 

32. Insurance

 

As of June 31, 2015, the insurance coverage by nature, considering the aircraft fleet and related to the maximum reimbursable amounts indicated in U.S. Dollars, is as follows:

 

Aeronautical Type

In Reais

In U.S. Dollars

Guarantee - hull/war

19,168,135

4,824,721

Civil liability per event/aircraft (*)

2,979,675

750,000

Inventories (*)

556,206

140,000

(*) Values per incident and annual aggregate.

 

74


 

GOL Linhas Aéreas Inteligentes S.A.

 

Notes to the interim financial information - ITR

September 30, 2015

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

 

 

 

Pursuant to Law 10,744, of October 9, 2003, the Brazilian government assumed the commitment to complement any civil liability expenses related to third parties caused by war or terrorist events, in Brazil or abroad, which VRG may be required to pay, for amounts exceeding the limit of the insurance policies effective beginning September 10, 2001, limited to the amount in Brazilian Reais equivalent to one billion in U.S. Dollars.

75

 

SIGNATURE
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
Date: November 12, 2015
 
GOL LINHAS AÉREAS INTELIGENTES S.A.
By:

/S/ Edmar Prado Lopes Neto


 
Name: Edmar Prado Lopes Neto
Title:   Investor Relations Officer
 

 

FORWARD-LOOKING STATEMENTS

This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates offuture economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will a ctually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.