FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For the month of May, 2003
Commission File Number 1-15224
Energy Company of Minas Gerais
________________________________________________________
(Translation of registrant's name into English)
Avenida Barbacena, 1200
30190-131 Belo Horizonte, Minas Gerais, Brazil
________________________________________________________
(Address of 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 if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(1): _____
Indicate by check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(7): _____
Indicate by check mark whether by furnishing the information contained in this
Form, the registrant 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, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): N/A
Index
Item Description of Item
---- -------------------
1. Corporate Announcement, dated May 9, 2003.
2. Summary of Deliberations of the Annual General Shareholders' Meeting
Held on April 30, 2003.
3. Press Release, dated May 19, 2003.
4. Analysis of First Quarter 2003 Consolidated Results as Compared to
the First Quarter of 2002, according to Brazilian Corporate Law
accounting practices, in Brazilian reais, dated May 19, 2003.
5. Material Fact, dated May 20, 2003.
i
Item 1
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CORPORATE ANNOUNCEMENT
IMMEDIATE RELEASE
-----------------
SUMMONS TO
EXTRAORDINARY GENERAL SHAREHOLDERS' MEETING
Belo Horizonte, Brazil, May 15, 2003 - Companhia Energetica de Minas Gerais -
CEMIG - (NYSE: CIG; BOV: CMIG4, CMIG3 and LATIBEX: XCMIG), one of Brazil's
largest energy companies, announced today that CEMIG's shareholders are hereby
summoned to the Extraordinary General Shareholders' Meeting to be held on May
28, 2003 at 10:00 a.m. (Belo Horizonte, Brazil time) at CEMIG's headquarters,
located at Avenida Barbacena, 1200 - 18th floor, in the city of Belo
Horizonte, State of Minas Gerais, Brazil, to deliberate on the following
matters:
I- Amendments to CEMIG's By-laws:
1. Amendment of Article 1 to conform CEMIG's corporate purpose to legal
requirements;
2. Amendment of Article 2 to allow CEMIG the possibility of
establishing offices abroad;
3. Deletion of the sole paragraph of Article 5 in order to conform the
By-laws to Article 47 of Law 6,404/1976 and its subsequent
amendments;
4. Amendment of the heading of Article 8, but preserving the current
first and second paragraphs, in order to ensure that the State of
Minas Gerais retains the majority of voting shares unless prior
authorization by the State House of Representatives is given;
5. Insertion of the new sole paragraph of Article 9 to conform the
By-laws to Article 126 of Law 6,404/1976 and its subsequent
amendments, as well as to expedite the procedures necessary to call
shareholders' general meetings;
6. Amendment of the first paragraph of Article 14 to emphasize the
requirements of knowledge by all directors of a board of directors'
meeting in the event of meetings called on an expedited basis;
7. Insertion of subsections "j" and "l" in Article 17 to better define
the Board of Directors' responsibilities;
8. Amendment of the heading of Article 18 to modify the constitution of
the Board of Executive Officers;
9. Amendment of the heading of Article 19 to assign to the Executive
Vice-President the authority to act as a substitute for the Chief
Executive Officer during his/her temporary absences;
10. Amendment of Article 22 in order to modify the Executive Officers'
duties;
11. Amendment of paragraph 3 of Article 21 to reflect the new
constitution of the Board of Executive Officers;
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12. Amendment of paragraph 4 of Article 21 to better define the
Executive Officers' duties;
13. Insertion of the sole paragraph of Article 23 in order to establish
the criteria to elect the chairperson of the Fiscal Council and to
authorize such person to summon and to chair the Fiscal Council
meetings;
14. Amendment of the sole paragraph of Article 28 and of the heading of
Article 30 to conform to Article 189 and its following articles of
the Law 6,404/1976 and its subsequent amendments;
15. Amendment of Article 33 to clearly provide that the actions
authorized by the By-laws are only authorized to the extent that
they comply with applicable law; and
16. Amendment of Article 12 to modify the Board of Directors'
composition.
II- Election of directors and their respective alternates in connection with
Item I-16 above.
In accordance with Article 141 of Law 6,404/1976, amended by Law 10,303/2001,
and considering that actual directors were elected using cumulative voting,
all directors and respective alternates must be elected through cumulative
voting.
Belo Horizonte (Brazil), May 09, 2003.
Wilson Nelio Brumer
Chairman
------------------------------------------------------------------------------
Contacts:
Luiz Fernando Rolla Eliza Gibbons
Investor Relations - CEMIG The Anne McBride Company
Tel. +55-31-3299-3930 Tel. 303-477-1350
Fax +55-31-3299-3933 Fax 212-983-1736
lrolla@cemig.com.br eliza@annemcbride.com
Item 2
CEMIG
-------------------------------------------------------------------------------
COMPANHIA ENERGETICA DE MINAS GERAIS - CEMIG
SUMMARY OF DELIBERATIONS OF THE ANNUAL GENERAL SHAREHOLDERS'
MEETING HELD ON APRIL 30, 2003
1. The Management Report and the Financial Statements regarding the year
ended December 31, 2002, as well as certain related documents, were
approved;
2. It was determined that the payment of interest on capital in the amount
of R$220,000,000 shall be made no later than December 31, 2003, without
monetary restatement, and that the Board of Directors may determine
that the payment be made prior to such time should CEMIG have cash
available to do so;
3. Election of the new Board of Directors for a term of 3 years as a
result of the ending of the previous term;
4. Election of the new Fiscal Council members and respective alternates
for a term of one year as a result of the ending of the previous term;
5. CEMIG's management shall submit, no later then fifteen days from April
30, 2003, a proposal for a By-Laws amendment providing holders of
preferred shares the ability to appoint one director to CEMIG's Board
of Directors;
6. It was decided that the monthly remuneration of the members of the
Board of Directors (excluding directors and alternate members who are
also Executive Officers) be equivalent to 20% of the average monthly
remuneration received by CEMIG's Executive Officers; and
7. It was decided that members of the Board of Directors are to receive
50% of such monthly remuneration, and that the remaining 50% be paid to
the director or to his/her alternate based on attendance at the Board
of Directors' meetings.
Item 3
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BUSINESS NEWS
IMMEDIATE RELEASE
CEMIG REPORTS FIRST QUARTER 2003 EARNINGS
Belo Horizonte, Brazil, May 19, 2003 - Companhia Energetica de Minas
Gerais - CEMIG - (NYSE: CIG; BOV: CMIG4, CMIG3 and LATIBEX: XCMIG), a leading
fully-integrated electricity company in Brazil, today reported net income of
R$151.7 million for the first quarter of 2003, a drop from net income of
R$219.9 million in the first quarter of 2002.
CEMIG's first quarter 2003 results were aided by higher revenues from
gross electricity supply, and by financial revenues from appreciation of the
real in relation to the U.S. dollar.
Mr. Djalma Bastos, our CEO, had the following to say about the results:
"We are happy with the Company's performance in the first quarter. Not only
did we see energy sales volumes rise but we are profitable again thanks to the
Company's solid fundamentals. Our unchanged focus on the core business and our
ability to develop profitable projects and remain financially sound make Cemig
one of the greatest investment opportunities in Brazil. Profitability will
continue to be a priority in the coming quarters. The measures we took earlier
in the year to cut operating expenses, as well as the comprehensive capital
budget review we performed, should enable us to produce strong returns."
Revenues from gross electricity supply were R$1.458 billion in the first
quarter of 2003, a 23.56% increase over the R$1.180 reported in the first
quarter of 2002. This result was fundamentally due to a 10.51% tariff
readjustment as of April 8, 2002, an increase in the Charges for Emergency
Capacity in the first quarter of 2003, and a 5.58% increase in the volume of
energy sold.
Revenues from electricity supply to other concessionaires were R$4.3
million in the first quarter, an 89.15% reduction from the R$39.2 million
recorded in the first quarter of 2002. These revenues are mainly from energy
transactions on the Wholesale Electricity Market (MAE) in the prior period,
which amounted to R$32.27 million.
In the first quarter CEMIG recognized revenues of R$315.2 million from
the extraordinary tariff readjustment, which refers to billing losses and the
parcel of expenses from the energy sold on the MAE during the Rationing
Program. The Company is receiving the amounts recognized as revenues from the
extraordinary
tariff readjustment by means of an additional readjustment, effective for 82
months as of January 2002.
General and administrative expenses were R$965 million in the first
quarter, a 0.21% increase over G&A expenses in the first quarter of 2002. The
higher number was due substantially to higher personnel expenses and the Fuel
Consumption Account (CCC), which offset the reduction in expenses from energy
purchased for resale and post-employment obligations.
The financial result was impacted by exchange rate variations in relation
to foreign currency loans and financing, and to the reversal of the provision
for devaluation to market value of the National Treasury Notes.
Net non-operating expenses of R$9.3 million in the first quarter of 2003
rose 33.42% over the R$7 million reported in the same quarter of the prior
year. The non-operating result is comprised of losses on projects and damages
in the deactivation of Fixed Assets.
Mr. Flavio Decat, our CFO, said: "Our major concern in the quarter was to
preserve the Company's liquidity despite the volatility of the country's major
indicators. In particular, appreciation of the dollar caused heavy losses to
companies doing business in Brazil. In addition, Brazil's major bonds had wide
spreads, which affected corporate bond and syndicated loan costs, which are
the main instruments used to roll over maturing debt or to finance expansion
projects. Accordingly, we have taken measures to reduce the operating expenses
to the level required by the new electricity rate as well as the capital
expenditure forecasted for this year in order to significantly reduce the
Company's indebtedness. Thus, with a more favorable outlook and expectations
of stronger cash flow due to the rate adjustment granted to us last April by
ANEEL, we will be able to meet the goals established by the Board of Directors
early this year and add value to shareholders' investments.
Certain statements and assumptions contained herein are forward-looking
statements based on management's current views and assumptions and involve
known and unknown risks and uncertainties. Actual results could differ
materially from those expressed or implied in such statements.
Contacts:
Luiz Fernando Rolla Eliza Gibbons
Investor Relations Officer CEMIG The Anne McBride Company
Tel. +55-31-3299-3930 Tel. 303-477-1350
Fax +55-31-3299-3933 Fax 212-983-1736
lrolla@cemig.com.br eliza@annemcbride.com
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Chart I
Statement of Income (consolidated)
Values in millions of Reais
2003 2002
---- -------------------------------------------------------
1Q. Year 4Q 3Q 2Q 1Q
---- -------------------------------------------------------
Net Revenue 1,088 5,119 1,298 1,539 1,043 1,239
Operating Expenses (965) (4,593) (1,186) (1,490) (954) (963)
EBIT 123 525 111 49 89 276
EBITDA 263 1,076 254 187 227 408
Financial Result 158 (616) 142 (450) (374) 66
Non-Operating Result (9) (27) (7) (6) (7) (7)
Extraordinary Loss - (1,045) - - (1,045) -
Income Tax, Social Contribution and Deferred Income Tax (120) (71) (198) 149 93 (115)
Interest on Capital Reversal - 220 100 - 120 -
Minority Interest - 12 1 2 9 -
===== ======= ====== ====== ======= =====
Net Income 152 (1,002) 149 (256) (1,115) 220
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Chart II
Operating Revenues (consolidated)
Values in millions of Reais
2003 2002
---- -------------------------------------------------------
1Q. Year 4Q 3Q 2Q 1Q
---- -------------------------------------------------------
Retail Sales 1,454 5,458 1,515 1,400 1,402 1,141
Extraordinary Revenues - 275 6 8 (54) 315
Wholesale 4 534 45 439 11 39
Transmission Grid Revenue 58 185 51 54 42 38
Others 68 300 129 67 61 43
Deductions (496) (1,633) (448) (429) (419) (337)
===== ======= ====== ====== ======= =====
Net Revenues 1,088 5,119 1,298 1,539 1,043 1,239
Chart III
Operating Expenses (consolidated)
Values in millions of Reais
2003 2002
---- ----------------------------------------------------
1Q. Year 4Q 3Q 2Q 1Q
---- ----------------------------------------------------
Energy Purchased 292 1,733 278 793 302 360
Labor 157 553 155 133 132 133
Depreciation and Amortization 140 551 142 138 139 132
CCC 93 345 92 92 91 70
Transmission Grid Charges 77 298 78 78 77 65
Outsourced Services 65 265 85 68 60 52
Forluz - Employee Post-retirement Benefits 7 145 (17) 54 54 54
Other Expenses 134 703 373 134 99 97
=== ===== ===== ===== === ===
Total 965 4,593 1,186 1,490 954 963
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Chart IV
Breakdown of Electricity Sales (consolidated)
No. of Consumers MWh R$ thousand
-------------------------- --------------------------- -------------------------
1st QUARTER 1st QUARTER 1st QUARTER
-------------------------- --------------------------- -------------------------
2003 2002 2003 2002 2003 2002
--------- --------- --------- --------- --------- ---------
Residential 4,655,848 4,517,756 1,698,335 1,500,186 515,585 381,126
Industrial 68,255 68,087 5,259,841 5,196,928 562,703 452,737
Commercial, Services and Other 518,529 506,064 886,503 808,195 228,330 175,706
Rural 344,001 326,009 343,294 298,132 59,961 44,851
Others 52,846 51,359 609,728 491,513 102,356 69,999
Own Consumption 1,339 1,377 14,214 11,302 - -
Unbilled Supply, Net - - - - (15,345) 16,321
Wholesale 4 4 52,168 89,633 4,250 6,882
Transaction on the MAE - - - - - 32,273
========= ========= ========= ========= ========= =========
CONSOLIDATED TOTAL 5,640,822 5,470,656 8,864,083 8,395,889 1,457,840 1,179,895
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Chart V
Financial Result Breakdown (consolidated)
Values in millions of Reais
2003 2002
------ -------------------------------------------------------------
1Q Year 4Q 3Q 2Q 1Q
------ ------- ----- ----- ------ ----
Financial Income
Investment Income Earned 19 236 39 102 65 30
Charges on Overdue Bills 13 43 14 10 11 8
CRC Assignment Agreement - Interest on
Arrears and Monetary Variation 65 308 128 82 56 42
Monetary Restatement of Parcel A Costs 74 199 - 61 76 62
Foreign Exchange Gains 108 75 (7) 53 23 6
PASEP and COFINS on Financial Income (16) (45) (15) (16) (8) (6)
Others 31 51 (52) 87 7 9
====== ======= ===== ===== ====== ====
294 867 107 379 230 151
Financial Expenses
Interest on Loans and Financing (74) (251) (67) (60) (67) (57)
Foreign Exchange Losses (3) (803) 166 (625) (342) (2)
Monetary Restatement Losses -
Loans and Financing (36) (101) (31) (54) (12) (4)
Financial Transaction Tax ("CPMF") (9) (28) (9) (7) (7) (5)
Marketable Security Loss Provision 26 (61) 9 (49) (26) 5
Advance Sales of Electric Energy - (10) - (6) (4) -
Others (40) (8) 66 (27) (26) (21)
====== ======= ===== ===== ====== ====
(136) (1,262) 134 (828) (484) (84)
Interest on Capital - (220) (100) - (120) -
====== ======= ===== ===== ====== ====
158 (615) 142 (450) (374) 67
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Chart VI
Related Party Transactions
Values in millions of Reais
03/31/2003 12/31/2002
--------------------- ---------------------
State of Minas Gerais State of Minas Gerais
Government Government
--------------------- ---------------------
ASSETS
Current Assets
Customers and Distributors 10 8
Tax Recoverable -
State VAT Recoverable in 48 Months 24 15
Non-current Assets
Account Receivable from Minas Gerais State Government 820 755
Tax Recoverable -
VAT Recoverable in 48 Months 79 68
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Taxes, Fees and Charges
VAT - ICMS Payable 128 44
Interest on Capital and Dividends 50 50
Long-term Liabilities
Debentures 27 26
1Q 2003 1Q 2002
--------------------- ---------------------
FINANCIAL
Electricity Sales 7 4
Deductions from Operating Revenues - ICMS (312) (241)
Financial Income-
Monetary Restatement and Interest on
CRC Assignment Agreement 65 42
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Chart VII
Share Ownership
Number of Shares as of March 31, 2003
----------------------------------------------------------------------------------------
Shareholders Common % Preferred % Total %
------------------------------------ -------------- ----- -------------- ----- --------------- -----
State of Minas Gerais 36,119,657,399 51.0 3,030,572,489 3.3 39,150,229,888 24.1
Southern Electric Brasil Part. Ltda. 23,362,956,173 33.0 - - 23,362,956,173 14.4
Other 125,680,827 0.2 182,462,458 0.2 308,143,285 0.2
Local 8,986,368,626 12.7 46,070,419,019 50.5 55,056,787,645 34.0
Foreign 2,279,504,898 3.2 41,996,197,136 46.0 44,275,702,034 27.3
============== ===== ============== ===== =============== =====
Total 70,874,167,923 100.0 91,279,651,102 100.0 162,153,819,025 100.0
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Chart VIII
BALANCE SHEETS (consolidated)
ASSETS
Values in Millions of Reais
2003 2002
------- -------
1Q Year
------- -------
CURRENT ASSETS
Cash and Cash equivalents 278 123
Consumers and Distributors 861 882
Dealership - Rate Adjustment 270 258
Dealership - Energy Transportation 20 18
Dealers - Transactions on the MAE 94 83
Tax Recoverable 76 21
Rationing Bonds and Costs 27 -
Materials and Supplies 20 21
Prepaid Expenses - CVA 2 226
Receivable from Federal Government - Loss
Revenue Related to Low-income Customers 64 42
Other 110 146
------- -------
1,822 1,820
NONCURRENT ASSETS
Account Receivable from Minas Gerais State Government 820 755
Consumers - Rate Adjustment 1,145 1,150
Prepaid Expenses - CVA 521 195
Tax Credits 540 541
Marketable Securities - Available for Sale 73 53
Rationing - Bonds and Adaptation Costs 25 52
Dealers - Transactions on the MAE 463 463
Recoverable Taxes 91 82
Escrow Account in Connection with Litigation 67 66
Other Receivables 96 106
------- -------
3,841 3,463
PERMANENT ASSETS
Investments 686 608
Property, Plant and Equipment 7,915 7,898
Deferred Charges 24 25
------- -------
8.625 8.531
------- -------
TOTAL ASSETS 14.288 13.814
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BALANCE SHEET (consolidated)
LIABILITIES AND SHAREHOLDERS' EQUITY
Values in Millions of Reais
2003 2002
------ ------
1Q Year
------ ------
CURRENT LIABILITIES
Suppliers 1,085 1,275
Taxes Payable 277 151
Loans, Financing and Debentures 950 834
Payroll and Related Charges 103 108
Interest on Capital and Dividends 204 211
Employee Post-retirement Benefits 177 181
Regulatory Charges 151 94
Profit-Sharing 30 26
Other 75 81
3,052 2,961
LONG-TERM LIABILITIES
Loans and Financing 1,753 1,717
Debentures 913 834
Employee Post-retirement Benefits 1,604 1,656
Suppliers - Wholesale 355 334
Taxes, Fees and Charges 331 217
Reserve for Contingencies 334 315
Other 85 70
5,375 5,143
- -
PARTICIPATION IN ASSOCIATE COMPANIES 28 29
SHAREHOLDERS' EQUITY
Paid-in Capital 1,622 1,622
Capital Reserves 4,032 4,032
Retained Earnings (Losses) 152 -
5,806 5,654
Funds for Capital Increase 27 27
5,833 5,681
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 14,288 13,814
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Item 4
ANALYSIS OF FIRST QUARTER 2003 CONSOLIDATED RESULTS AS
COMPARED TO THE FIRST QUARTER OF 2002
Belo Horizonte, Brazil, May 19, 2003 - Companhia Energetica de Minas Gerais -
CEMIG - (NYSE: CIG; BOV: CMIG4, CMIG3 and LATIBEX: XCMIG), a leading
fully-integrated electricity company in Brazil and its subsidiaries ("Grupo
CEMIG") today reported net income of R$151.7 million from January through
March 2003, compared with net income of R$219.9 million from January through
March 2002.
Grupo CEMIG's 2003 results were favorably impacted by higher revenues from
gross electricity supply and by financial revenues from appreciation of the
real in relation to the U.S. dollar. In the preceding fiscal year results were
favorably impacted by revenues of R$315.2 million from the extraordinary
tariff adjustment.
Mr. Djalma Bastos, our CEO, had the following to say about the results: "We
are happy with the Company's performance in the first quarter. Not only did we
see energy sales volumes rise but we are profitable again thanks to the
Company's solid fundamentals. Our unchanged focus on the core business and our
ability to develop profitable projects and remain financially sound make Cemig
one of the greatest investment opportunities in Brazil. Profitability will
continue to be a priority in the coming quarters. The measures we took earlier
in the year to cut operating expenses, as well as the comprehensive capital
budget review we performed, should enable us to produce strong returns."
Mr. Flavio Decat, our CFO, said: "Our major concern in the quarter was to
preserve the Company's liquidity despite the volatility of the country's major
indicators. In particular, appreciation of the dollar caused heavy losses to
companies doing business in Brazil. In addition, Brazil's major bonds had wide
spreads, which affected corporate bond and syndicated loan costs, which are
the main instruments used to roll over maturing debt or to finance expansion
projects. Accordingly, we have taken measures to reduce the operating expenses
to the level required by the new electricity rate as well as the capital
expenditure forecasted for this year in order to significantly reduce the
company's indebtedness. Thus, with a more favorable outlook and expectations
of stronger cash flow due to the rate adjustment granted to us last April by
ANEEL, we will be able to meet the goals established by the Board of Directors
early this year and add value to shareholders' investments.
Gross Supply of Electric Energy
Revenues from gross electricity supply were R$1,458 billion in the first
quarter of 2003, a 23.56% increase over the R$1,180 reported in the first
quarter of 2002. This result was fundamentally due to the following factors:
|_| A 10.51% tariff readjustment as of April 8, 2002;
|_| Increase in the Charges for Emergency Capacity charged in the first
quarter of 2003; and
|_| A 5.58% increase in the volume of energy sold.
Supply to Final Consumers
-------------------------
Revenues from gross electricity supply to final consumers was R$1,454 billion
in the first quarter of 2003, a 27.43% increase over the R$1,141 billion
reported in the first quarter of 2002. This result is due principally to the
10.51% tariff readjustment in April 2002, and to the 6.06% growth in volume of
energy sold to final consumers. Of note, the Rationing Program was in effect
until February 2002, which explains the significant variation in energy sold
between the two periods. The principal consumption classes - industrial,
residential and commercial - showed growth in energy sold of 1.21%, 13.21% and
9.69%, respectively.
Another factor that added to growth in revenues from gross supply of
electricity was the Charge for Emergency Capacity included in consumers'
electricity bills. These charges amounted to R$70.2 million in the first
quarter of 2003, compared to R$4.4 million in the first quarter of 2002. The
expressive variation between the two periods is due to the retroactive amount
of R$30 million in March 2003, for the parcel of Charges for Emergency
Capacity for July 2, 2002 to August 10, 2002. This followed a Public Civil
Lawsuit, which blocked charging those amounts in the previous fiscal year.
Volume of Energy Sold to Final Consumers - GWh
[GRAPHIC OMITTED]
Wholesale
---------
Revenues from electricity supply to other concessionaires were R$4.3 million
in the first quarter of 2003, an 89.15% reduction from the $39.2 million
recorded in the first quarter of 2002. This result is due principally to
energy transactions of R$32.27 million on the Wholesale Electricity Market
(MAE) in the prior period. This amount corresponds to reimbursement to CEMIG
of the difference between amounts payable to the MAE for the transactions that
occurred while the Rationing Program was in effect, and the price of
R$49.26/MWh.
2
Revenues from Extraordinary Tariff Readjustment
-----------------------------------------------
In compliance with the General Agreement of the Electricity Sector, in the
first quarter of 2002 CEMIG recognized revenues in the amount of R$315.2
million from the extraordinary tariff readjustment, which refer to billing
losses and the parcel of expenses from the energy sold on the MAE during the
Rationing Program. The amounts recognized as revenues from the extraordinary
tariff readjustment are being received by the Company through an additional
readjustment, to be effective for 82 months, beginning in January 2002.
General and Administrative Expenses
General and administrative expenses were R$965 million from January through
March 2003, and R$963 million from January through March 2002. This 0.21%
increase was due principally to higher personnel expenses and CCC (Fuel
Consumption Account), which offset the reduction in expenses from energy
purchased for resale and post-employment obligations. The main variations in
expenses are as follows:
Personnel
---------
Personnel expenses of R$157.4 million in the first quarter of 2003 showed an
18.09% increase over the R$133.3 million reported in the first quarter of
2002. This result is due to the 11.45% salary readjustment in November 2002,
and the 2.22% increase in the number of employees from an average of 11,169
employees in the first quarter of 2002, to 11,417 employees in the first
quarter of 2003.
Energy Purchased for Resale
---------------------------
The expense for energy purchased for resale was R$292 million from January
through March 2003, an 18.90% reduction from the R$360 million reported in the
same period of the previous year. This result stems from reduction in expenses
related to energy transactions on the MAE, which were R$5.6 million in the
first quarter of 2003, and R$61 million in the first quarter of 2002. The
greatest expense from MAE transactions in the first quarter of 2002 was due to
significantly higher tariffs for free energy purchased during the period in
which the Rationing Program was in effect.
Contracted Services
-------------------
Expenses for contracted services were R$65 million in the first quarter of
2003, a 25.7% increase over the R$51.5 million recorded in the first quarter
of 2002. This result is due to readjustment in contracts for third-party
services, particularly those related to bill delivery, and maintenance and
conservation of installations and electric equipment.
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Post-retirement Obligations
---------------------------
Post-retirement obligations were R$6.5 million in the first quarter of 2003,
an 87.96% reduction over the R$54.2 million reported in the first quarter of
2002. The reduction in expenses was mainly due to an estimate for 2003 of
reduced growth in obligations with future benefits, compared to the expected
higher profitability in pension fund assets.
Operating Provisions
--------------------
First quarter 2003 operating provisions were R$40.5 million, a 184.29%
increase over operating provisions of R$14.2 million in the first quarter of
2002. Growth in operating provisions is due to completion in the first quarter
of 2003 of the provision for losses in recovery of the values of the
Extraordinary Tariff Readjustment in the amount of R$10.1 million, and
provisions for legal contingencies in the amount of R$14.5 million in the
first quarter of 2003, compared with the R$3.2 million reported in the first
quarter of 2002.
Fuel Usage Quota- CCC
---------------------
CCC expenses of R$92.7 million in the first quarter of 2003 rose 33.34% over
the R$69.5 million recorded in the first quarter of 2002. The CCC refers to
the costs of operating thermal plants on the interconnected grid and isolated
Brazilian system, which costs are apportioned among the electric energy
concessionaires by ANEEL Resolution.
Financial Revenues (Expenses)
-----------------------------
The main factors that affected the financial result are as follows:
|_| Net revenues with exchange rate variations in the first quarter of
2003 of R$105.8 million, compared with R$3.9 million in the first quarter
of 2002, due mainly to loans and financing in foreign currency. In the
first quarter of 2003, the real appreciated 5.10% in value in comparison
to the U.S. dollar, a change from the 0.14% devaluation of the real to the
dollar in the same period of 2002.
|_| Exchange rate variation expenses in relation to loans and financing
in the amount of R$36.5 million, compared with R$4.1 million in the
previous year as a function of the growth in inflationary indexes used to
update loan and financing contracts in national currency. The IGP-M, the
principal index used for contracts, varied 6.27% from January through
March 2003, compared to its 0.51% variation in the same period of the
previous year.
|_| In the first quarter of 2003, reversal of the provision for
devaluation to market value of the National Treasury Notes in the amount
of R$25.9 million, compared to the reversal of R$5.4 million in the
previous year. This result is due to the lower discount required by the
financial markets in negotiation of long-term Federal Government bonds.
4
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Net Non-operating Expenses
Net non-operating expenses of R$9.3 million in the first quarter of 2003 rose
33.42% over the R$7 million reported in the first quarter of 2002. The
non-operating result is comprised of losses on projects and losses in PP&E
deactivation.
Income Tax and Social Contribution
In the first quarter of 2003, Grupo CEMIG had Income Tax and Social
Contribution expenses of R$120.4 million, representing 44.30% of profit before
fiscal effects. In the previous year, these expenses were R$115.3 million,
representing 34.38% of profit before fiscal effects.
In the preceding fiscal year, CEMIG had a general provision for losses in
relation to the Second Amendment to the CRC Assignment Agreement signed with
the Government of the State of Minas Gerais. Thus the financial results from
interest and monetary adjustments related to the contract were no longer
recognized in the results. Nevertheless, in accordance with Brazilian tax law,
CEMIG recognized federal taxes payable related to the mentioned financial
receipts. This tax procedure justifies the percentage growth in fiscal
obligations in relation to profits.
Certain statements and assumptions contained herein are forward-looking
statements based on management's current views and assumptions and involve
known and unknown risks and uncertainties. Actual results could differ
materially from those expressed or implied in such statements.
Contacts:
Luiz Fernando Rolla Eliza Gibbons
Investor Relations - CEMIG The Anne McBride Company
Tel. +55-31-3299-3930 Tel. 303-477.1350
Fax +55-31-3299-3933 Fax 212-983-1736
lrolla@cemig.com.br eliza@annemcbride.com
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Chart I
Statement of Income (consolidated)
Values in millions of Reais
2003 2002
------- ----------------------------------------------
1Q Year 4Q 3Q 2Q 1Q
------- ----------------------------------------------
Net Revenue 1,088 5,119 1,298 1,539 1,043 1,239
Operating Expenses (965) (4,593) (1,186) (1,490) (954) (963)
EBIT 123 525 111 49 89 276
EBITDA 263 1,076 254 187 227 408
Financial Result 158 (616) 142 (450) (374) 66
Non-Operating Result (9) (27) (7) (6) (7) (7)
Extraordinary Loss - (1,045) - - (1,045) -
Income Tax, Social
Contribution and Deferred
Income Tax (120) (71) (198) 149 93 (115)
Interest on Capital Reversal - 220 100 - 120 -
Minority Interest - 12 1 2 9 -
===== ====== ====== ======== ======= =======
Net Income 152 (1,002) 149 (256) (1,115) 220
----------------------------------------------------------------------------------------------
Chart II
Operating Revenues (consolidated)
Values in millions of Reais
2003 2002
------- ----------------------------------------------
Year 4Q 3Q 2Q 1Q
------- ----------------------------------------------
Retail Sales 1,454 5,458 1,515 1,400 1,402 1,141
Extraordinary Revenues - 275 6 8 (54) 315
Wholesale 4 534 45 439 11 39
Transmission Grid Revenue 58 185 51 54 42 38
Others 68 300 129 67 61 43
Deductions (496) (1,633) (448) (429) (419) (337)
Net Revenues 1,088 5,119 1,298 1,539 1,043 1,239
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Chart III
Operating Expenses (consolidated)
Values in millions of Reais
2003 2002
------- ----------------------------------------------
Year 4Q 3Q 2Q 1Q
------- ----------------------------------------------
Energy Purchased 292 1,733 278 793 302 360
Labor 157 553 155 133 132 133
Depreciation and Amortization 140 551 142 138 139 132
CCC 93 345 92 92 91 70
Transmission Grid Charges 77 298 78 78 77 65
Outsourced Services 65 265 85 68 60 52
Forluz - Employee Post-retirement
Benefits 7 145 (17) 54 54 54
Other Expenses 134 703 373 134 99 97
Total 965 4,593 1,186 1,490 954 963
----------------------------------------------------------------------------------------------
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Chart IV
Breakdown of Electricity Sales (consolidated)
No. of Consumers MWh R$ thousand
------------------------------------------------------------------------------------
1st QUARTER 1st QUARTER 1st QUARTER
------------------------------------------------------------------------------------
2003 2002 2003 2002 2003 2002
--------- --------- ----------- ---------- ---------- ----------
Residential 4,655,848 4,517,756 1,698,335 1,500,186 515,585 381,126
Industrial 68,255 68,087 5,259,841 5,196,928 562,703 452,737
Commercial, Services and
Other 518,529 506,064 886,503 808,195 228,330 175,706
Rural 344,001 326,009 343,294 298,132 59,961 44,851
Others 52,846 51,359 609,728 491,513 102,356 69,999
Own Consumption 1,339 1,377 14,214 11,302 - -
Unbilled Supply, Net - - - - (15,345) 16,321
Wholesale 4 4 52,168 89,633 4,250 6,882
Transaction on the MAE - - - - - 32,273
CONSOLIDATED TOTAL 5,640,822 5,470,656 8,864,083 8,395,889 1,457,840 1,179,895
----------------------------------------------------------------------------------------------------------------------
8
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Chart V
Financial Result Breakdown (consolidated)
Values in millions of Reais
2003 2002
-------------------------------------------------
Year 4Q 3Q 2Q 1Q
-------------------------------------------------
Financial Income
Investment Income Earned 19 236 39 102 65 30
Charges on Overdue Bills 13 43 14 10 11 8
CRC Assignment Agreement - Interest on
Arrears and Monetary Variation 65 308 128 82 56 42
Monetary Restatement of Parcel A Costs 74 199 - 61 76 62
Foreign Exchange Gains 108 75 (7) 53 23 6
PASEP and COFINS on Financial Income (16) (45) (15) (16) (8) (6)
Others 31 51 (52) 87 7 9
----- ----- ----- ----- ---- ----
294 867 107 379 230 151
----- ----- ----- ----- ---- ----
Financial Expenses
Interest on Loans and Financing (74) (251) (67) (60) (67) (57)
Foreign Exchange Losses (3) (803) 166 (625) (342) (2)
Monetary Restatement Losses - Loans and
Financing (36) (101) (31) (54) (12) (4)
Financial Transaction Tax ("CPMF") (9) (28) (9) (7) (7) (5)
Marketable Security Loss Provision 26 (61) 9 (49) (26) 5
Advance Sales of Electric Energy - (10) - (6) (4) -
Others (40) (8) 66 (27) (26) (21)
---- ------- ----- ---- ----- -----
(136) (1,262) 134 (828) (484) (84)
----- ------- ----- ----- ---- -----
Interest on Capital - (220) (100) - (120) -
158 (615) 142 (450) (374) 67
----- ----- ----- ----- ---- ----
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Chart VI
Related Party Transactions
Values in millions of Reais
03/31/2003 12/31/2002
---------------------------------------
State of Minas State of Minas
Gerais Government Gerais Government
---------------------------------------
ASSETS
Current Assets
Customers and Distributors 10 8
Tax Recoverable -
State VAT Recoverable in 48 Months 24 15
Non -current Assets
Account Receivable from Minas Gerais State Government 820 755
Tax Recoverable -
VAT Recoverable in 48 Months 79 68
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Taxes, Fees and Charges
VAT - ICMS Payable 128 44
Interest on Capital and Dividends 50 50
Long-term Liabilities
Debentures 27 26
1Q 2003 1Q 2002
----------------- -----------------
FINANCIAL
Electricity Sales 7 4
Deductions from Operating Revenues - ICMS (312) (241)
Financial Income-
Monetary Restatement and Interest on CRC
Assignment Agreement 65 42
-------------------------------------------------------------------------------------------------
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Chart VII
Share Ownership
Number of Shares as of March 31, 2003
--------------------------------------------------------------------------------------
Shareholders Common % Preferred % Total %
--------------------------------------------------------------------------------------
State of Minas Gerais 36,119,657,399 51.0 3,030,572,489 3.3 39,150,229,888 24.1
Southern Electric Brasil Part. Ltda. 23,362,956,173 33.0 - - 23,362,956,173 14.4
Other 125,680,827 0.2 182,462,458 0.2 308,143,285 0.2
Local 8,986,368,626 12.7 46,070,419,019 50.5 55,056,787,645 34.0
Foreign 2,279,504,898 3.2 41,996,197,136 46.0 44,275,702,034 27.3
Total 70,874,167,923 100.0 91,279,651,102 100.0 162,153,819,025 100.0
----------------------------------------------------------------------------------------------------------------------------------
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Chart VIII
BALANCE SHEET (consolidated)
ASSETS
Values in Millions of Reais
2003 2002
-------------------
Year
-------------------------------------------------------------------------------
CURRENT ASSETS
Cash and Cash equivalents 278 123
Consumers and Distributors 861 882
Dealership - Rate Adjustment 270 258
Dealership - Energy Transportation 20 18
Dealers - Transactions on the MAE 94 83
Tax Recoverable 76 21
Rationing Bonds and Costs 27 -
Materials and Supplies 20 21
Prepaid Expenses - CVA 2 226
Receivable from Federal Government - Loss Revenue
Related to Low-income Customers 64 42
Other 110 146
------- -------
1,822 1,820
------- -------
NONCURRENT ASSETS
Account Receivable from Minas Gerais State
Government 820 755
Consumers - Rate Adjustment 1,145 1,150
Prepaid Expenses - CVA 521 195
Tax Credits 540 541
Marketable Securities - Available for Sale 73 53
Rationing - Bonds and Adaptation Costs 25 52
Dealers - Transactions on the MAE 463 463
Recoverable Taxes 91 82
Escrow Account in Connection with Litigation 67 66
Other Receivables 96 106
------- -------
3,841 3,463
------- -------
PERMANENT ASSETS
Investments 686 608
Property, Plant and Equipment 7,915 7,898
Deferred Charges 24 25
8.625 8.531
------- -------
TOTAL ASSETS 14.288 13.814
------- -------
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BALANCE SHEET (consolidated)
LIABILITIES AND SHAREHOLDERS' EQUITY
Values in Millions of Reais
2003 2002
--------------------
Year
--------------------
CURRENT LIABILITIES
Suppliers 1,085 1,275
Taxes Payable 277 151
Loans, Financing and Debentures 950 834
Payroll and Related Charges 103 108
Interest on Capital and Dividends 204 211
Employee Post-retirement Benefits 177 181
Regulatory Charges 151 94
Profit-Sharing 30 26
Other 75 81
3,052 2,961
----------- -------
LONG-TERM LIABILITIES
Loans and Financing 1,753 1,717
Debentures 913 834
Employee Post-retirement Benefits 1,604 1,656
Suppliers - Wholesale 355 334
Taxes, Fees and Charges 331 217
Reserve for Contingencies 334 315
Other 85 70
5,375 5,143
----------- -------
- -
PARTICIPATION IN ASSOCIATE COMPANIES 28 29
SHAREHOLDERS' EQUITY
Paid-in Capital 1,622 1,622
Capital Reserves 4,032 4,032
Retained Earnings (Losses) 152 -
5,806 5,654
----------- -------
Funds for Capital Increase 27 27
----------- -------
5,833 5,681
----------- -------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 14,288 13,814
--------------------------------------------------------------------------------------
13
Item 5
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MATERIAL FACT
IMMEDIATE RELEASE
-----------------
HOLDERS OF PREFERRED SHARES TO ELECT
ONE CEMIG DIRECTOR
Belo Horizonte, May 20, 2003 - Companhia Energetica de Minas Gerais -
Cemig (NYSE: CIG, BOVESPA: CMIG3, CMIG4 and LATIBEX: XCMIG), a leading fully
integrated electricity company in Brazil, announced today that in its pursuit
to comply with the best corporate governance practices, the Company's by-laws
will be amended to, among other things, allow the election of a member of
CEMIG's Board of Directors by holders of preferred shares. The Extraordinary
General Shareholders' Meeting to approve said amendment will be held on May
28, 2003.
Certain statements and assumptions contained herein are forward-looking
statements based on management's current views and assumptions and involve
known and unknown risks and uncertainties. Actual results could differ
materially from those expressed or implied in such statements.
Contacts:
Luiz Fernando Rolla Eliza Gibbons
Investor Relations - CEMIG The Anne McBride Company
Tel. +55-31-3299-3930 Tel. 303-477-1350
Fax +55-31-3299-3933 Fax 212-983-1736
lrolla@cemig.com.br eliza@annemcbride.com
Signatures
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.
COMPANHIA ENERGETICA DE MINAS
GERAIS - CEMIG
By: /s/ Flavio Decat de Moura
------------------------------------
Name: Flavio Decat de Moura
Title: Chief Financial Officer
Date: May 21, 2003