Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2015shares | |
Document And Entity Information [Abstract] | |
Document Type | 20-F |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2015 |
Document Fiscal Year Focus | 2,015 |
Document Fiscal Period Focus | FY |
Trading Symbol | OIBR |
Entity Registrant Name | OI S.A. |
Entity Central Index Key | 1,160,846 |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Accelerated Filer |
Entity Common Stock, Shares Outstanding | 519,751,658 |
Consolidated Balance Sheets
Consolidated Balance Sheets BRL in Thousands, € in Millions | Dec. 31, 2015BRL | Dec. 31, 2014BRL |
Current assets | ||
Cash and cash equivalents | BRL 14,898,063 | BRL 2,449,206 |
Short-term investments | 1,801,720 | 171,415 |
Trade accounts receivable, less allowance for doubtful accounts of R$561,139 in 2015 and R$513,787 in 2014 | 8,379,719 | 7,450,040 |
Derivative financial instruments | 606,387 | 340,558 |
Other taxes | 922,986 | 1,054,255 |
Recoverable taxes | 1,062,851 | 1,158,133 |
Judicial Deposits | 1,258,227 | 1,133,639 |
Pension plan assets | 753 | 1,744 |
Held-for-sale assets | 7,686,298 | 34,254,682 |
Other assets | 1,597,283 | 1,662,157 |
Total current assets | 38,214,287 | 49,675,829 |
Non-current assets | ||
Long-term investments | 125,966 | 111,285 |
Other taxes | 659,899 | 741,911 |
Deferred taxes | 856,457 | 3,694,238 |
Derivative financial instruments | 6,780,316 | 2,880,923 |
Judicial Deposits | 13,119,130 | 12,260,028 |
Investments | 154,890 | 148,411 |
Property, plant and equipment, net | 25,817,821 | 26,244,309 |
Intangible assets | 11,780,136 | 13,553,821 |
Pension plan assets | 1,529,194 | 1,103,337 |
Other assets | 296,505 | 327,242 |
Total non-current assets | 61,120,314 | 61,065,505 |
Total assets | 99,334,601 | 110,741,334 |
Current liabilities | ||
Trade payables | 5,035,793 | 4,359,785 |
Loans and financing | 11,809,598 | 4,463,728 |
Derivatives financial instruments | 1,988,948 | 523,951 |
Payroll, related taxes and benefits | 660,415 | 744,439 |
Current income taxes payable | 339,624 | 477,282 |
Other taxes | 1,553,651 | 1,667,599 |
Tax financing program | 78,432 | 94,041 |
Contingencies | 1,020,994 | 1,058,521 |
Liability for pensions benefits | 144,589 | 129,662 |
Dividends and interest on capital | 96,433 | 185,138 |
Licenses and concessions payable | 911,930 | 675,965 |
Liabilities associated to held-for-sale assets | 745,000 | 27,178,222 |
Other payables | 1,219,624 | 1,021,719 |
Total current liabilities | 25,605,031 | 42,580,052 |
Non-Current liabilities | ||
Loans and financing | 48,047,819 | 31,385,667 |
Derivative financial instruments | 521,395 | 142,971 |
Other taxes | 924,337 | 874,727 |
Tax financing program | 716,656 | 896,189 |
Contingencies | 3,413,972 | 4,073,247 |
Liability for pensions benefits | 399,431 | 346,873 |
Licenses and concessions payable | 6,607 | 685,975 |
Other payables | 3,052,913 | 2,602,556 |
Total non-current liabilities | 57,083,130 | 41,008,205 |
Shareholder's equity | ||
Preferred shares, no par value Autorized 157,727 shares; issue and outstanding 155,915 shares in 2015 and 565,036 in 2014 | 4,094,909 | 14,292,197 |
Common shares, no par value 17,343,465 7,146,023 Autorized 668,034 shares; issue and outstanding 519,752 shares in 2015 and 277,730 in 2014 | 17,343,465 | 7,146,023 |
Total share capital | 21,438,374 | 21,438,220 |
Share issue costs | (444,943) | (309,592) |
Capital reserves | 17,762,546 | 17,640,287 |
Treasury shares | (5,531,092) | (2,367,552) |
Obligations in equity instruments | (2,894,619) | |
Other comprehensive income | (609,894) | 131,082 |
Accumulated losses | (17,159,098) | (7,993,946) |
Total equity attributable to Oi S.A. and subsidiaries | 15,455,893 | 25,643,880 |
Noncontrolling interest | 1,190,547 | 1,509,197 |
Total shareholders' equity | 16,646,440 | 27,153,077 |
Total liabilities and shareholders' equity | BRL 99,334,601 | BRL 110,741,334 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - BRL shares in Thousands, BRL in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | BRL 561,139 | BRL 513,787 |
Preferred shares, par value | BRL 0 | BRL 0 |
Preferred shares, authorized | 157,727 | 572,317 |
Preferred shares , issued | 155,915 | 565,036 |
Preferred shares , outstanding | 155,915 | 565,036 |
Common shares, par value | BRL 0 | BRL 0 |
Common shares, authorized | 668,034 | 286,155 |
Common shares , issued | 519,752 | 277,730 |
Common shares , outstanding | 519,752 | 277,730 |
Consolidated Statements of Oper
Consolidated Statements of Operations - BRL shares in Thousands, BRL in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Net operating revenue | BRL 27,353,765 | BRL 28,247,099 | BRL 28,422,147 | |
Cost of sales and services | (16,250,083) | (16,257,192) | (16,466,773) | |
Gross profit | 11,103,682 | 11,989,907 | 11,955,374 | |
Operating (expenses) income | ||||
Selling expenses | (4,719,811) | (5,565,757) | (5,532,045) | |
General and administrative expenses | (3,912,178) | (3,834,563) | (3,683,440) | |
Other operating income (expenses), net | (1,258,655) | 2,023,622 | 1,243,100 | |
Income (loss) before financial expenses and taxes | 1,213,038 | 4,613,209 | 3,982,989 | |
Financial (expenses), net | (6,538,008) | (4,548,922) | (3,301,956) | |
Income (loss) before taxes | [1] | (5,324,970) | 64,287 | 681,033 |
Income tax and social contribution | (3,379,927) | (758,268) | (76,610) | |
Income (loss) from continuing operations | (8,704,897) | (693,981) | 604,423 | |
Income (loss) for the year from discontinued operations, net | (867,139) | (4,086,449) | ||
Net income (loss) for the year | (9,572,036) | (4,780,430) | 604,423 | |
Net income (loss) allocated to common shares-basic and diluted | (9,159,343) | (4,781,720) | 604,423 | |
Net income (loss) attributable to non-controlling interests | (412,693) | 1,290 | ||
Common Stock | ||||
Operating (expenses) income | ||||
Net income (loss) allocated to common shares-basic and diluted | BRL (3,947,142) | BRL (1,569,149) | BRL 189,711 | |
Common shares-basic and diluted | 314,518 | 202,312 | 51,476 | |
Common shares-basic and diluted | BRL (12.55) | BRL (7.76) | BRL 3.69 | |
Common shares-basic and diluted | (11.36) | (1.13) | BRL 3.69 | |
Common shares-basic and diluted | BRL (1.19) | BRL (6.63) | ||
Preferred Stock | ||||
Operating (expenses) income | ||||
Net income (loss) allocated to common shares-basic and diluted | BRL (5,212,201) | BRL (3,212,571) | BRL 414,712 | |
Common shares-basic and diluted | 415,321 | 414,200 | 112,527 | |
Common shares-basic and diluted | BRL (12.55) | BRL (7.76) | BRL 3.69 | |
Common shares-basic and diluted | (11.36) | (1.13) | BRL 3.69 | |
Common shares-basic and diluted | BRL (1.19) | BRL (6.63) | ||
[1] | In 2013, substantially all pre tax income and income tax are related to Brazilian Companies. In 2015 and 2014 income before taxes and income tax for continuing operations is as follows: |
Consolidated Statements Compreh
Consolidated Statements Comprehensive Income (Loss) - BRL BRL in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Net income (loss) for the year | BRL (9,572,036) | BRL (4,780,430) | BRL 604,423 |
Other comprehensive income (loss) | |||
Foreign currency translation adjustments | 172,597 | 384,677 | |
Less reclassification of losses included in discontinued operations | (481,499) | ||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, before Tax, Total | (308,902) | 793,006 | |
Unrealized gain | 1,907,018 | 408,329 | |
Portion of loss recognized in other comprehensive income for other-than-temporary losses on investment | (2,315,347) | ||
Other Comprehensive Income Loss Available For Sale Securities Adjustment Before Tax Including Other Than Temporary Impairment Losses | (408,329) | 408,329 | |
Less amortization of prior service cost and actuarial gain (loss) included in net periodic pension cost | 39,151 | 1,954 | 26,142 |
Less reclassification of actuarial gains included in discontinued operations | 901,453 | ||
Pension and other postretirement benefits plans | 1,062,268 | (1,235,915) | 262,623 |
Changes in effective portion of the fair value of hedging financial instrument | (802,063) | 163,550 | (206,998) |
Less reclassification adjustment for losses included in net income (loss) | 4,113 | 22,497 | (4,114) |
Fair value hedging financial instruments | (797,950) | 186,047 | (211,112) |
Tax effect on other comprehensive income (loss): | |||
Less reclassification of pension tax effects included in discontinued operations | (194,020) | ||
Hedging financial instruments | (63,256) | 71,778 | |
Other comprehensive income, tax | (194,020) | 243,333 | (17,514) |
Other comprehensive income (loss) | (10,218,969) | (4,793,959) | 638,420 |
Less comprehensive income (loss) attributable to noncontrolling interest | (318,650) | 124,726 | |
Net comprehensive income (loss) attributable to controlling shareholders | (9,900,319) | (4,918,685) | 638,420 |
Continuing Operations | |||
Other comprehensive income (loss) | |||
Net actuarial gain (loss) | BRL 121,664 | (327,215) | 236,481 |
Tax effect on other comprehensive income (loss): | |||
Pensions from continuing operations | 110,589 | BRL (89,292) | |
Discontinued Operations | |||
Other comprehensive income (loss) | |||
Net actuarial gain (loss) | (910,654) | ||
Tax effect on other comprehensive income (loss): | |||
Pensions from continuing operations | BRL 196,000 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - BRL BRL in Thousands | Total | Approval of proposed additional dividends | Interim dividends | Capital Units [Member] | Share issue costs | Capital Reserve | Capital ReserveInterim dividends | Obligations in equity instruments | Treasury Shares | Reserve for additional dividends | Reserve for additional dividendsApproval of proposed additional dividends | Accumulated losses | Other comprehensive income (loss) | Parent | ParentApproval of proposed additional dividends | ParentInterim dividends | Noncontrolling Interest |
Beginning balance at Dec. 31, 2012 | BRL 20,428,653 | BRL 7,308,753 | BRL (56,609) | BRL 17,362,822 | BRL (2,104,524) | BRL 391,322 | BRL (2,707,161) | BRL 234,050 | BRL 20,428,653 | ||||||||
Capital increase with redeemable shares | 162,456 | (162,456) | |||||||||||||||
Attributed dividends | BRL (391,322) | BRL (500,000) | BRL (500,000) | BRL (391,322) | BRL (391,322) | BRL (500,000) | |||||||||||
Obligations in equity instruments | (162,456) | (162,456) | (162,456) | ||||||||||||||
Share issue costs | 62 | 62 | 62 | ||||||||||||||
Net income (loss) for the year | 604,423 | 604,423 | 604,423 | ||||||||||||||
Other comprehensive income (loss) | 33,997 | 33,997 | 33,997 | ||||||||||||||
Recognition of investment reserve | 1,493,015 | (1,493,015) | |||||||||||||||
Ending balance at Dec. 31, 2013 | 20,013,357 | 7,471,209 | (56,547) | 18,030,925 | (2,104,524) | (3,595,753) | 268,047 | 20,013,357 | |||||||||
Acquisition of interests - PT Portugal | 1,468,602 | BRL 1,468,602 | |||||||||||||||
Capital increase | 13,959,900 | 13,959,900 | 13,959,900 | ||||||||||||||
Capital increase with reinvestment tax incentives | 7,111 | (7,111) | |||||||||||||||
Attributed dividends | (84,131) | (84,131) | |||||||||||||||
Share issue costs | (253,045) | (253,045) | (253,045) | ||||||||||||||
Obligations in equity instruments | (2,894,619) | BRL (2,894,619) | (2,894,619) | ||||||||||||||
Exchange for treasury shares | (263,028) | (263,028) | (263,028) | ||||||||||||||
Net income (loss) for the year | (4,780,430) | (4,781,720) | (4,781,720) | 1,290 | |||||||||||||
Realization of legal reserve | (383,527) | 383,527 | |||||||||||||||
Other comprehensive income (loss) | (13,529) | (136,965) | (136,965) | 123,436 | |||||||||||||
Ending balance at Dec. 31, 2014 | 27,153,077 | 21,438,220 | (309,592) | 17,640,287 | (2,894,619) | (2,367,552) | (7,993,946) | 131,082 | 25,643,880 | 1,509,197 | |||||||
Acquisition of interests - TMARPart (Note 1) | 116,604 | 122,413 | (5,809) | 116,604 | |||||||||||||
Capital increase | 154 | (154) | |||||||||||||||
Share exchange costs | (135,351) | (135,351) | (135,351) | ||||||||||||||
Share issue costs | (377,429) | ||||||||||||||||
Obligations in equity instruments | (268,921) | (268,921) | (268,921) | ||||||||||||||
Exchange for treasury shares | BRL 3,163,540 | (3,163,540) | |||||||||||||||
Net income (loss) for the year | (9,572,036) | (9,159,343) | (9,159,343) | (412,693) | |||||||||||||
Other comprehensive income (loss) | (646,933) | (740,976) | (740,976) | 94,043 | |||||||||||||
Ending balance at Dec. 31, 2015 | BRL 16,646,440 | BRL 21,438,374 | BRL (444,943) | BRL 17,762,546 | BRL (5,531,092) | BRL (17,159,098) | BRL (609,894) | BRL 15,455,893 | BRL 1,190,547 |
Consolidated Statements of Cha7
Consolidated Statements of Changes in Equity (Parenthetical) | 12 Months Ended |
Dec. 31, 2013BRL / shares | |
Interim dividends | |
Dividends, per share | BRL 3.049 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - BRL BRL in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Operating activities | |||
Net income (loss) for the year | BRL (9,572,036) | BRL (4,780,430) | BRL 604,423 |
Discontinued operations, net of tax | 867,139 | 4,086,449 | |
Adjustments to reconcilie net income to cash provided by operating activities | |||
Interest loss on financial instruments | 6,442,647 | 1,311,198 | 1,881,041 |
Derivatives financial instruments | (5,795,744) | (425,027) | (1,131,012) |
Depreciation and amortization | 6,195,039 | 5,766,702 | 5,691,824 |
Impairment of available-for-sale securities | 447,737 | ||
Allowance for doubtful accounts | 726,944 | 649,463 | 849,779 |
Contingencies | 566,617 | 463,087 | 381,949 |
Liabilities for pension plans | (107,368) | (162,974) | (133,415) |
Impairment of assets | 524,870 | 18,293 | 429,024 |
Deferred income tax expense | 2,598,351 | 136,267 | (341,888) |
Other, net | 89,059 | (331,758) | (1,546,618) |
Changes in operating assets and liabilities, net of acquisition | |||
Accounts receivable | (1,622,343) | (1,057,184) | 556,009 |
Inventories | 74,776 | (38,721) | (53,696) |
Other taxes | 119,887 | (790,262) | (594,144) |
Held-for-trading | (8,790,093) | (4,754,150) | (6,230,243) |
Redemption of held-for-trading | 7,958,169 | 5,021,859 | 8,203,246 |
Trade payables | 117,271 | (221,347) | (250,056) |
Payroll, related taxes and benefits | (351,128) | (198,428) | (972) |
Contingencies | (1,079,323) | (775,583) | (934,039) |
Net increase in income tax and social contribution | 154,873 | (133,511) | (221,654) |
Liabilities for pension plans | (139,325) | (131,156) | (124,246) |
Changes in assets and liabilities held for sale | (786,914) | ||
Cash flows from investing activities - continuing operations | (1,539,013) | 3,652,787 | 7,035,312 |
Cash flows from investing activities - discontinued operations | 485,342 | 1,877,782 | |
Net cash (used) generated by operating activities | (1,053,671) | 5,530,569 | 7,035,312 |
Investing activities | |||
Capital expenditures | (3,681,484) | (5,370,351) | (5,976,488) |
Proceeds from the sale of property, plant and equipment | 14,996 | 4,453,611 | 4,127 |
Cash received for the sale of PT Portugal (Note 26) | 17,218,275 | ||
Judicial deposits | (2,044,796) | (1,660,987) | (1,693,945) |
Redemption of judicial deposits | 1,039,221 | 722,836 | 958,529 |
Acquisition of investment in PT Portugal on May 5, 2014 | 1,087,904 | ||
Cash and cash equivalents transferred to held-for-sale assets | (730,572) | ||
Other | 191,546 | 8,091 | (62,528) |
Cash flows from investing activities - continuing operations | 12,737,758 | (1,489,468) | (6,770,305) |
Cash flows from investing activities - discontinued operations | (194,739) | (2,813,437) | |
Net cash generated by (used in)investing activities | 12,543,019 | (4,302,905) | (6,770,305) |
Financing activities | |||
Borrowings net of costs | 7,218,639 | 2,665,098 | 3,434,762 |
Repayment of principal of borrowings, financing | (11,308,213) | (4,587,978) | (3,483,640) |
Cash impacts on derivatives transactions | 2,704,155 | (465,961) | (84,318) |
Licenses and concessions | (348,545) | (204,779) | (710,968) |
Tax refinancing program | (93,266) | (870,215) | (174,455) |
Capital increase | 8,230,606 | ||
Issue premium and related costs | (403,375) | ||
Payment of dividends and interest on capital | (57,608) | (5,172) | (1,280,162) |
Cash and cash equivalents acquired by merger | 20,346 | ||
Cash flows from financing activities - continuing operations | (1,864,492) | 4,358,224 | (2,298,781) |
Cash flows from financing activities - discontinued operations | (492,194) | (5,532,725) | |
Net cash used in financing activities | (2,356,686) | (1,174,501) | (2,298,781) |
Foreign exchange differences on cash equivalents | 3,316,195 | (28,787) | 50,443 |
Net increase (decrease) in cash and cash equivalents | 12,448,857 | 24,376 | (1,983,331) |
Cash and cash equivalents beginning of year | 2,449,206 | 2,424,830 | 4,408,161 |
Cash and cash equivalents end of year | 14,898,063 | 2,449,206 | 2,424,830 |
Acquisition of Property, Plant and Equipment and Intangible assets (incurring liabilities) | 568,973 | (122,072) | 637,884 |
Offset of judicial deposits against contingencies | 374,295 | 405,329 | 495,259 |
Share exchange | 3,163,540 | ||
Income tax and social contribution paid | (626,703) | (755,512) | (640,152) |
Financial charges paid | BRL (4,057,529) | BRL (2,852,682) | BRL (2,448,391) |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | 1. BASIS OF PRESENTATION Oi S.A. (“Company” or “Oi”), is a Switched Fixed-line Telephony Services (“STFC”) concessionaire, operating since July 1998 in Region II of the General Concession Plan (“PGO”), which covers the Brazilian states of Acre, Rondônia, Mato Grosso, Mato Grosso do Sul, Tocantins, Goiás, Paraná, Santa Catarina, Rio Grande do Sul, and the Federal District, in the provision of STFC as a local and intraregional long-distance carrier. Since January 2004, the Company has also provided domestic and international long-distance services in all Regions. Additionally, since January 2005, it has provided local services outside of Region II. These services are provided under concessions granted by Agência Nacional de Telecomunicações - ANATEL (National Telecommunications Agency), the regulator for the Brazilian telecommunications industry. The Company is domiciled in Brazil, with headquarters located at Rio de Janeiro, at Rua do Lavradio, 71 – Rio de Janeiro. The Company also holds: (i) through its wholly-owned subsidiary Telemar Norte Leste S.A. (“TMAR”), a concession to provide fixed telephone services in Region I and international long-distance services nationwide; and (ii) through its indirect subsidiary Oi Móvel S.A. (“Oi Móvel”) a license to provide mobile telephony services in Region I, II and III. The local and nationwide STFC long-distance concession agreements between the Company and its subsidiary, TMAR, and ANATEL are effective through December 31, 2025. These concession agreements provide for reviews on a five-year basis and, in general, provide for a greater degree of intervention by ANATEL in the management of the business than the licenses to provide private services, and also include several consumer protection provisions, as determined by ANATEL the regulator. On December 30, 2015, ANATEL announced that the due date for the review to be implemented by the end of 2015 had been postponed to December 31, 2016. The Company also holds investments in Africa, where the Company provides fixed and mobile telecommunications services indirectly through Africatel Holding BV (“Africatel”). The Company provides services in Namibia, Mozambique, and São Tomé, among other countries, through its subsidiaries Mobile Telecommunications Limited (“MTC”), Listas Telefónicas de Moçambique (“LTM”), and CST – Companhia Santomense de Telecomunicações, SARL (“CST”). Additionally, Africatel holds an indirect 25% stake in Unitel S.A. (“Unitel”) and a 40% stake in Cabo Verde Telecom, S.A. (“CVT”), which provide telecommunications services in Angola and Cape Verde. In Asia, the Company provides fixed and mobile telecommunications services through its subsidiary Timor Telecom. Certain items in these consolidated financial statements have been reclassified to conform to the current period presentation. Summary of acquisitions, corporate restructuring and divestures Company’s capital increase through the contribution by Pharol of all PT Portugal shares As mentioned below, as part of the business combination, a capital increase of the Company was approved, which was partially paid-in through the contribution, by Pharol, of all the shares issued by PT Portugal SGPS, S.A. (“PT Portugal”). Pursuant to the Definitive Agreements executed on February 19, 2014, which described the steps necessary to implement this Transaction, the Company’s Board of Directors decided at the meetings held on April 28 and 30, 2014, to increase capital by R$13,217,865 through a public distribution of Company common and preferred shares, with the issue of 2,142,279,524 common shares, including 396,589,982 common shares in the form of American Depositary Shares (“ADSs”), and 4,284,559,049 preferred shares, including 828,881,795 preferred shares in the form of ADSs. On May 5, 2014, Banco BTG Pactual S.A., as Public Offering Stabilizing Underwriter, exercised, part of the distribution option for 120,265,046 Oi common shares and 240,530,092 Oi preferred shares (“Overallotment Shares”), amounting to R$742,035. As a result, on said date the Company capital increased to R$21,431,109. The shares were issued at the price of R$2.17 per common share and R$2.00 per preferred share. The common shares in the form of ADSs (“ADSs ON”, each representing one common share) were issued at the price of US$0.970 per ADS ON, and the preferred shares in the form of ADSs (“ADSs PN”, each representing one preferred share) were issued at the price of US$0.894 per ADS PN. Finally, the issued shares were paid in (i) in assets, by Pharol through the contribution to the Company of all PT Portugal SGPS, S.A. (“PT Portugal”) shares, which held all the (i.a) operating assets of Pharol amounting to R$30,299 (mostly represented by available-for-sale securities, tangible and intangible assets), except its direct or indirect interests in the Company and in Contax Participações S.A., and (i.b) liabilities of Pharol at the contribution date amounting to R$33,115 (mostly represented by non-current debt), as determined in the Valuation Report prepared by Banco Santander (Brasil) S.A. (“PT Assets”), approved at the Company’s Shareholders’ Meeting held on March 27, 2014; and (ii) cash, on the subscription date, in local legal tender amounting to R$8.25 billion. Accordingly, the Company’s capital increase totaled the gross amount of R$13.96 billion, including PT’s assets valued at R$5.71 billion. Sale of PT Portugal Shares The sale of all the shares of PT Portugal to Altice Portugal S.A. (“Altice”), involving basically the operations of PT Portugal in Portugal and in Hungary, was completed on June 2, 2015 (see note 26 for financial impacts). After this sale, the Company retained its stakes in the following former PT Group subsidiaries: (i) 100% of the shares of PT Participações SGPS, S.A. (“PT Participações”), holding of the operations in Africa, through Africatel Holdings BV (“Africatel”), and Timor, through Timor Telecom, S.A. (“Timor Telecom”); (ii) 100% of the shares of Portugal Telecom International Finance B.V. (“PTIF”), CVTEL B.V. (“CVTEL”), and Carrigans Finance S.à.r.l. (“Carrigans”). Corporate reorganization On March 31, 2015, the shareholders of TmarPart acting at a pre-meeting of the shareholders of TmarPart (1) unanimously approved the adoption of an alternative share structure, after analyzing options and taking into consideration the obstacles to the completion of the previously announced merger of shares of Oi and TmarPart, and (2) authorized the managements of TmarPart and Oi to begin taking the applicable steps to implement the alternative share structure. The alternative share structure was intended to achieve many of the primary purposes of the merger of shares of Oi and TmarPart, including the adoption by our company of the best corporate governance practices required by BM&FBovespa’s Novo Mercado segment and the elimination of the control of Oi through the various shareholders’ agreements governing Oi, while maintaining the goal of implementing a transaction that would result in the listing of the shares of Oi on the Novo Mercado. The implementation of the alternative share structure consisted of the corporate ownership simplification transactions (described below), the adoption of new by-laws of our company, the election of a new board of directors of our company, and a voluntary share exchange through which holders of our preferred shares were entitled to exchange their preferred shares for our common shares (“voluntary convertion”). On September 1, 2015, we and several of our direct and indirect shareholders undertook the following transactions, which we refer to collectively as the corporate ownership simplification transactions: • AG Telecom merged with and into PASA; • LF Tel merged with and into EDSP; • PASA and EDSP merged with and into Bratel Brasil; • Valverde merged with and into TmarPart; • Venus RJ Participações S.A., Sayed RJ Participações S.A. and PTB2 S.A. merged with and into Bratel Brasil; • Bratel Brasil merged with and into TmarPart; and • TmarPart merged with and into our company. In connection with these transactions, all of the shareholders agreements to which we were an intervening party and through which the direct and indirect shareholders of TmarPart had rights to influence our management and operations were terminated. In the merger of TmarPart with and into Oi, the net assets of TmarPart, in the amount of R$122,412 were merged into the shareholders’ equity of Oi and as a result of the merger, TmarPart ceased to exist. The merger of TmarPart with and into Oi also resulted in the recognition its shareholders’ equity of a tax benefit related to the step up of tax basis the goodwill in the amount of R$982,768 with a corresponding valuation allowance by the same amount derived from the acquisition of equity interest in TmarPart recorded by Bratel Brasil, AG Telecom, LF Tel, in accordance with applicable Brazilian law. This tax benefit was recorded directly in equity as it was a transaction among and with shareholders’ of Oi. In the merger of TmarPart with and into Oi, shareholders of TmarPart received the same number of shares of Oi as were held by TmarPart immediately prior to the merger of TmarPart with and into Oi in proportion to their holdings in TmarPart. No withdrawal rights for the holders of shares of Oi were available in connection with the merger of TmarPart with and into Oi. At an extraordinary shareholders meeting of our company held on September 1, 2015, our shareholders (1) adopted amended by-laws for our company that were intended to increase the corporate governance standards applicable to our company as well as to limit the voting rights of holders of a large concentration of common shares, and (2) elected a new board of directors with terms of office until the shareholders’ meeting that approves our financial statements for the year ending December 31, 2017. With regard to the Voluntary Conversion, a total of 314,250,655 Oi preferred shares, or 66.84% of total preferred shares ex-treasury, were offered for conversion by their holders, attaining the minimum acceptance threshold of 2/3 of the holders of preferred shares ex-treasury to which the Voluntary Conversion was subject, was reached. The Company’s Board of Directors ratified the voluntary conversion, accepted the conversion requests filed by the holders of Preferred ADSs, and approved the summon of the Extraordinary Shareholders’ Meeting to reflect the new share structure, as a result of the Voluntary Conversion, in the Company’s Bylaws. Going concern considerations During 2015, our operations generated negative cash flows of R$1,054 million. As a result, we financed investing activities, debt service and working capital from our cash and cash equivalents and short-term cash investments. Historically, we have financed our investments in property, plant and equipment through the use of bank loans, vendor financing, capital markets and other forms of financing. As of December 31, 2015, our consolidated cash and cash equivalents and short-term cash investments amounted to R$16,700 million and our consolidated indebtedness amounted to R$ 59,857 million. We anticipated that we will be required to spend approximately R$19,725 million to meet our short-term contractual obligations and commitments during 2016, and an additional approximately R$30,672 million to meet our long-term contractual obligations and commitments in 2017 and 2018. As a result this financial situation doubt about Company’s ability to continue on a going concern basis. Oi’s operating and business focus remains unchanged and Oi is still committed to continuing to make investments that ensure a continue improvement of its quality of service, which it believes will allow it to continue to bring technological advances to its customers all over Brazil. Oi also continues to undertake efforts for the operating upgrading and transformation of its business by focusing on austerity, infrastructure optimization, process revision, and sales actions. On March 9, 2016, we announced that we had retained PJT Partners as our financial advisor to assist us in evaluating financial and strategic alternatives to optimize our liquidity and debt profile. On April 25, 2016, we entered into a customary non-disclosure agreement with Moelis & Company, who acts as advisor for a diverse ad hoc group of holders of the bonds issued by Oi and its subsidiaries, as an initial step towards discussions of a potential restructuring of its indebtedness. Our financial statements for the year ended December 31, 2015 have been prepared assuming that we will continue as a going concern, based on our cash flow projections and the successful implementation of strategic alternatives to optimize the liquidity and debt profile. Our projections depend on factors such as attainment of traffic volume targets, customer base, launching of bundled products attractive to customers, service sales prices, foreign exchange fluctuation and the success of the efforts to identify and implement financial and strategic alternatives to optimize the liquidity and debt profile. Should one of more of the assumptions underlying the Company cash flow projections and other forecasts, the financial support of the Company, or the outcome of the efforts to identify and implement financial and strategic alternatives to optimize the Company liquidity and debt profile not be met, this could be an indication of material uncertainties that would generate doubts as to the Company’s ability to realize its assets and settle its obligations at their carrying amounts. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | 2. SIGNIFICANT ACCOUNTING POLICIES The accounting policies detailed below have been consistently applied in all periods presented in this Consolidated financial statements. Use of estimates In preparing the financial statements in conformity with U.S. Generally Accepted Accounting Principles, the Company’s management uses estimates and assumptions based on historical experience and other factors, including expected future events, which are considered reasonable and relevant. The use of estimates and assumptions frequently requires judgments related to matters that are uncertain with respect to the outcomes of transactions and the amount of assets and liabilities. Actual results of operations and the financial position may differ from these estimates. Significant items subject to such estimates and assumptions include the useful lives of fixed assets, allowances for doubtful accounts, the valuation of derivatives, the valuation of available-for-sale investment, deferred tax assets, valuation of fixed assets, pension plan, income tax uncertainties and contingencies. Consolidated Financial Statements The accompanying consolidated financial statements include the accounts of Oi S.A. and its majority owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The Company accounts for investments over which it has significant influence but not a controlling financial interest using the equity method of accounting. Beginning June 2, 2015, the remaining assets and liabilities of PT Portugal not sold to Altice (Note 1) have been fully consolidated by the Company in each line item of the balance sheet, except for the assets and liabilities of the operations in Africa and Asia, which are consolidated and stated in a single line item of the balance sheet as assets held for sale, based on management’s expectation and decision of holding these assets and liabilities for sale. New Accounting Standards Long-Term Debt and Debt Issuance Costs Deferred Income Taxes and Liabilities Revenue Recognition Business Combinations Leases (Topic 842) - Recognition and Measurement of Financial Assets and Financial Liabilities - Functional and presentation currency The Company and its subsidiaries operate primarily as telecommunications operators in Brazil, Africa, and Asia, and engage in activities typical of this industry. The items included in the financial statements of each group company are measured using the currency of the main economic environment of the respective company’s operations (“functional currency”). The consolidated financial statements are presented in Brazilian reais (R$), which is the Company’s functional and presentation currency. To define its functional currency, management considered the currency that influences: • the sales prices of its goods and services; • the costs of services and sales; • the cash flows arising from receipts from customers and payments to suppliers; • interest, investments and financing. Transactions and balances Foreign currency-denominated transactions are translated into the functional currency using the exchange rates prevailing on the transaction dates. Foreign exchange gains and losses arising on the settlement of the transaction and the translation at the exchange rates prevailing at year end, related foreign currency-denominated monetary assets and liabilities are recognized in the statement of profit or loss, except when qualified as hedge accounting and, therefore, deferred in equity as cash flow hedges. Group companies with a different functional currency The profit or loss and the financial position of all Group entities, none of which uses a currency from a hyperinflationary economy, whose functional currency is different from the presentation currency are translated into the presentation currency as follows: • assets and liabilities are translating at the rate prevailing at the end of the reporting period; • revenue and expenses disclosed in the statement of profit or loss are translated using the average exchange rate; • all the resulting foreign exchange differences are recognized as a separate component of equity in other comprehensive income; and • goodwill and fair value adjustments, arising from the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing exchange rate. As at December 31, 2015 and 2014, the foreign currency-denominated assets and liabilities were translated into Brazilian reais using mainly the following foreign exchange rates: Closing rate Average rate Currency 2015 2014 2015 2014 Euro 4.2504 3.2270 4.2158 3.2525 US dollar 3.9048 2.6562 3.8711 2.6394 Cabo Verdean escudo 0.0390 0.0339 0.0298 0.0287 Sao Tomean dobra 0.000174 0.000154 0.000132 0.000131 Kenyan shilling 0.0382 0.0339 0.0293 0.0268 Namibian dollar 0.2510 0.2606 0.2297 0.2169 Mozambican metical 0.0832 0.0838 0.0767 0.0742 Segment information The presentation of information relating to operating segments is consistent with the internal reports provided to the chief operating decision maker of the Company. The results of segment operations are regularly reviewed in order to make decisions about the allocation of resources to assess operational performance and for strategic decision-making. Business combinations The Company uses the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred, and the equity instruments issued. The consideration transferred includes the fair value of assets and liabilities resulting from a contingent consideration contract, where applicable. The identifiable assets acquired and the liabilities and contingent liabilities assumed in a business combination are initially measured at their fair values at the date of acquisition. The Company depreciates amounts recognized according to the useful lives of the underlying assets, and tests such assets to determine any asset impairment losses when there is evidence of impairment. The Company tests goodwill for impairment on an annual basis. Investment Securities Investment securities at December 31, 2015 and 2014 consist of short-term and long-term investments classified as trading and an investment at Unitel classified as available-for-sale. Trading and available-for-sale securities are recorded at fair value. Unrealized holding gains and losses on trading securities are included in earnings. Unrealized holding gains and losses, net of the related tax effect, on available-for-sale securities are excluded from earnings and are reported as a separate component of accumulated other comprehensive income until realized. A decline in the market value of any available-for-sale below cost that is deemed to be other-than-temporary results in an impairment to reduce the carrying amount to fair value. To determine whether an impairment is other-than-temporary, the Company considers all available information relevant to the collectibility of the security, including past events, current conditions, and reasonable and supportable forecasts when developing estimate of cash flows expected to be collected. Evidence considered in this assessment includes the reasons for the impairment, the severity and duration of the impairment, changes in value subsequent to year-end, forecasted performance of the investee, and the general market condition in the geographic area or industry the investee operates in. Accounts receivable Accounts receivable from telecommunications services provided are stated at the tariff or service amount on the date they are provided and do not differ from their fair values. These receivables also include receivables from services provided and not billed by the end of the reporting period and receivables related to handset, SIM cards, and accessories. The allowance for doubtful accounts estimate is recognized in an amount considered sufficient to cover possible losses on the realization of these receivables. The allowance for doubtful accounts estimate is prepared based on historic default rates. The allowance for doubtful accounts is set up to recognize probable losses on accounts receivable taking into account the measures implemented to restrict the provision of services to and collect late payments from customers. There are cases of agreements with certain customers to collect past-due receivables, including agreements that allow customers to settle their debts in installments. The actual amounts not received may be different from the allowance recognized, and additional accruals might be required. Non-current assets held for sale and discontinued operations Non-current assets are classified as assets held for sale when their carrying amount is recoverable, principally through a sale, and when such sale is highly probable. These assets are stated at the lower of their carrying value and fair value less costs to sell. Disposals that represent a strategic shift that should have or will have a major effect on the Company’s operations and financial results qualify as discontinued operations. The results of discontinued operations are reported in discontinued operations in the consolidated statements of income for current and prior periods commencing in the period in which the business meets the criteria of a discontinued operation, and include any gain or loss recognized on closing or adjustment of the carrying amount to fair value less cost to sell. Property, plant and equipment Property, plant and equipment is stated at cost of purchase or construction, less accumulated depreciation. Historical costs include expenses directly attributable to the acquisition of assets. They also include certain costs for facilities, when it is probable that the future economic benefits related to such costs will flow to the Company. The borrowings and financing costs directly attributable to the purchase, construction or production of a qualifying asset are capitalized in the initial cost of such asset. Qualifying assets are those that necessarily require a significant time to be ready for use. Subsequent costs are added to the carrying amount as appropriate, when, and only when, these assets generate future economic benefits and can be reliably measured. The residual balance of the replaced asset is derecognized. Maintenance and repair costs are recorded in profit or loss as incurred. Depreciation is calculated on a straight-line basis, based on the estimated useful lives of the assets. The useful lives are reviewed annually by the Company. Intangible assets Acquired intangible assets with finite useful lives are recognized at cost, less amortization and accumulated impairment losses. Amortization is recognized on a straight-line basis over the asset’s estimated useful life. The estimated useful life and method of amortization are reviewed at the end of each annual reporting period, and the effect of any changes in estimates is accounted for on a prospective basis. Intangible assets with indefinite useful lives are carried at cost less accumulated impairment losses. Software licenses purchased are capitalized based on the costs incurred to purchase the software and make it ready for use. Software maintenance costs are expensed as incurred. Long-lived assets Long-lived assets, such as property, plant, and equipment, and purchased intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying amount. If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. Derivative financial instruments and hedging activities Derivative financial instruments are contracted to mitigate exposure to market risks arising from changes in exchange rates on foreign currency-denominated debts and short-term investments held abroad, and also from changes in earnings. Derivatives are initially recognized at cost at the inception of the derivative contract and are subsequently measured at fair value based on future cash flow estimates associated to the respective instrument. Changes in the fair value of any of these derivatives are recorded directly in earnings. The Company uses hedge accounting for derivative financial instruments. The purpose of this practice is to reduce the volatility of the gains or losses recognized due to changes in the fair values of these derivative financial instruments. Derivative financial instruments that qualify for hedge accounting are submitted to periodic prospective and retrospective effectiveness tests using the dollar offset method. Derivative instruments contracted and designated as hedging instruments are formally identified through initial designation documentation. Derivative financial instruments classified as cash flows hedges were designated for hedge accounting. The effective portion, is recognized in Other Comprehensive Income, net of taxes, and is reclassified to financial income (expenses) in the same period or periods during which the hedge transaction affects earnings. The ineffective portion, measured after the quarterly effectiveness tests, is recognized in financial income (expenses) in the same period it occurs. Changes in the fair values of derivative financial instruments that are not designated for purposes of hedge accounting are recognized as financial income or expenses in profit or loss in the period they occur. The hedge relationship expires and the designation is removed when: (i) The derivative contract is settled, terminated or settled, or if the Company or its subsidiary TMAR voluntarily removes the designation. If the hedged item continues to exist, the balances accumulated in other comprehensive income related to the changes in the fair value of the derivative are transferred to profit or loss for the year in which the hedged interest expenses and foreign exchange fluctuations are allocated. (ii) The debt was either prepaid or settled. In this case, the balance accumulated in other comprehensive income is immediately transferred to financial income or expenses in profit or loss for the year the designation is terminated. The required information on derivative instruments and the effects recognized by the Company are described in Note 3. Contingencies Liabilities for loss contingencies arising from claims, assessment, litigation, fines and penalties are recorded when it is probable that the liability has been incurred and the amount can be reasonably estimated, based on opinion of the management and its in-house and outside legal counsel, and the amounts are recognized based on the cost of the expected outcome of ongoing lawsuits. Pension and other postretirement plans The Company and its subsidiaries have defined benefit and defined contribution plans. The Company also sponsors a defined benefit health care plan for retirees and employees. In the defined contribution plan, the sponsor makes fixed contributions to a fund managed by a separate entity. The contributions are recognized as employee benefit expenses as incurred. The sponsor does not have the legal or constructive obligation of making additional contributions, in the event the fund lacks sufficient assets to pay all employees the benefits related to the services provided in the current year and prior years. For the defined benefit plans, the Company records annual amounts relating to its pension and postretirement plans based on calculations that incorporate various actuarial and other assumptions, including discount rates, mortality, assumed rates of return, compensation increases, turnover rates and healthcare cost trend rates. The Company reviews its assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends when it is appropriate to do so. The effect of modifications to those assumptions is recorded in accumulated other comprehensive income and amortized to net periodic cost over future periods using the corridor method. The Company believes that the assumptions utilized in recording its obligations under its plans are reasonable based on its experience and market conditions. The Company recognizes the over or under-funded status of a defined benefit postretirement plan as an asset or liability in its balance sheet and to recognizes changes in that funded status in the year in which the changes occur through other comprehensive income. The Company is not required to record actuarial calculations for multi-employer pension plans such as the PBS-A and contributions to such plans are recorded on an accrual basis. Refunds from these plans are recorded only upon the cash receipt. Revenue recognition Revenues correspond basically to the amount of the payments received or receivable from sales of services in the regular course of the Company’s and its subsidiaries’ activities. Service revenue is recognized when services are provided. Local and long distance calls are charged based on time measurement according to the legislation in effect. The services charged based on monthly fixed amounts are calculated and recorded on a straight-line basis. Prepaid services are recognized as unearned revenues and recognized in revenue as services are used by customers. Revenue from sales of handsets and accessories is recognized when these items are delivered and accepted by the customers. Discounts on services provided and sales of cell phones and accessories are taken into consideration in the recognition of the related revenue. Revenues involving transactions with multiple elements are identified in relation to each one of their components and the recognition criteria are applied on an individual basis. Revenue is not recognized when there is significant uncertainty as to its realization. Expense recognition Expenses are recognized on an accrual basis, considering their relation with revenue realization. Prepaid expenses attributable to future years are deferred over the related periods. Financial income and expenses Financial income is recognized on an accrual basis and comprises interest on receivables settled after the due date, gains on short-term investments and gains on derivative instruments. Financial expenses represent interest effectively incurred and other charges on borrowings, financing, derivative contracts, and other financial transactions. Income taxes Income taxes are recorded under the asset and liability method. Deferred taxes are recognized for temporary differences and tax loss carryforwards are recorded in assets or liabilities, as applicable. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50 percent likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The company and its subsidiaries file income tax returns in all jurisdictions in which they do business (Brazil is the only major tax jurisdiction). In Brazil, income tax returns are subject to review and adjustment by the tax authorities during a period of five calendar years. Positions challenged by the taxing authorities may be settled or appealed by the company. All audit periods prior to 2010 are closed for federal examination purposes. As of December 31, 2015 the company has no unrecognized tax benefits, nor any interest and penalties thereon. Interest and penalties on an underpayment of income taxes are recognized as part of interest expense and other expenses, respectively. |
FINANCIAL INSTRUMENTS AND RISK
FINANCIAL INSTRUMENTS AND RISK ANALYSIS | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
FINANCIAL INSTRUMENTS AND RISK ANALYSIS | 3. FINANCIAL INSTRUMENTS AND RISK ANALYSIS 3.1. Overview The table below summarizes our financial assets and financial liabilities carried at fair value at December 31, 2015 and 2014. Accounting measurement 2015 2014 Carrying amount Fair value Carrying amount Fair value Assets Cash and banks Fair value 1,111,840 1,111,840 532,285 532,285 Cash equivalents Fair value 13,786,223 13,786,223 1,916,921 1,916,921 Short-term investments Fair value 1,927,686 1,927,686 282,700 282,700 Derivative financial instruments Fair value 7,386,703 7,386,703 3,221,481 3,221,481 Accounts receivable (i) Amortized cost 8,379,719 8,379,719 7,455,687 7,455,687 Held-for-sale assets (Note 26) Available-for-sale financial asset Fair value 3,541,314 3,541,314 4,284,416 4,284,416 Dividends receivable Amortized cost 2,042,191 2,042,191 1,261,826 1,261,826 Liabilities Trade payables (i) Amortized cost 5,004,833 5,004,833 4,331,286 4,331,286 Borrowings and financing Borrowings and financing (ii) Amortized cost 17,049,280 17,049,280 15,335,155 15,335,155 Debentures Amortized cost 4,138,025 4,128,539 7,776,876 7,513,867 Senior notes Amortized cost 38,670,111 22,159,838 12,737,364 12,199,092 Derivative financial instruments Fair value 2,510,343 2,510,343 666,922 666,922 Dividends and interest on capital Amortized cost 96,433 96,433 185,138 185,138 Licenses and concessions payable (iii) Amortized cost 918,537 918,537 1,361,940 1,361,940 Tax refinancing program (iii) Amortized cost 795,088 795,088 990,230 990,230 Other payables (payable for the acquisition of equity interest) (iii) Amortized cost 382,230 382,230 408,978 408,978 (i) The balances of accounts receivables and trade payables have near terms and, therefore, they are not adjusted to fair value. (ii) Part of this balance of borrowings and financing with the BNDES and export credit agencies correspond to exclusive markets and, therefore, the fair values of these instruments is similar to their carrying amounts. A portion of the balance of borrowings and financing refers to the bonds issued in the international market, for which is there is a secondary market, and their fair values are different from their carrying amounts. (iii) The licenses and concessions payable, the tax refinancing program, and other obligations (payable for the acquisition of equity interest) are stated at the amounts that these obligations are expected to be settled and are not adjusted to fair value. Fair value of financial instruments The Company and its subsidiaries have measured their financial assets and financial liabilities at fair value using available market inputs and valuation techniques appropriate for each situation. The interpretation of market inputs for the selection of such techniques requires considerable judgment and the preparation of estimates to obtain an amount considered appropriate for each situation. Accordingly, the estimates presented may not necessarily be indicative of the amounts that could be obtained in an active market. The use of different assumptions for the calculation of the fair value may have a material impact on the amounts. (a) Derivative financial instruments The method used for calculating the fair value of derivative financial instruments was the future cash flows associated to each instrument contracted, discounted at market rates prevailing at December 31, 2015. (b) Non-derivative financial instruments measured at fair value The fair value of securities traded in active markets is equivalent to the amount of the last closing quotation available at the end of the reporting period, multiplied by the number of outstanding securities. For the remaining contracts, the Company carries out an analysis comparing the current contractual terms and conditions with the terms and conditions effective for the contract when they were originated. When terms and conditions are dissimilar, fair value is calculated by discounting future cash flows at the market rates prevailing at the end of the period, and when similar, fair value is similar to the carrying amount on the reporting date. (c) Fair value measurement hierarchy Fair value is the price for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties, in an arm’s length transaction on measurement date. The fair value is be based on the assumptions that market participants consider in pricing an asset or a liability, and in the establishment a hierarchy that prioritizes the information used to build such assumptions. The fair value measurement hierarchy attaches more importance to available market inputs (i.e., observable data) and a less weight to inputs based on data without transparency (i.e., unobservable data). Additionally, the Company considers all nonperformance risk aspects, including the entity’s credit, when measuring the fair value of a liability. The classification of an instrument in the fair value measurement hierarchy is based on the lowest level of input significant for its measurement. We present below a description of the three-level hierarchy: Level 1—inputs consist of prices quoted (unadjusted) in active markets for identical assets or liabilities to which the entity has access on measurement date; Level 2—inputs are different from prices quoted in active markets used in Level 1 and consist of directly or indirectly observable inputs for the asset or liability. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical assets or liabilities in markets that are not active; or inputs that are observable for the asset or liability or that can support the observed market inputs by correlation or otherwise for substantially the entire asset or liability. Level 3—inputs used to measure an asset or liability are not based on observable market variables. These inputs represent management’s best estimates and are generally measured using pricing models, discounted cash flows, or similar methodologies that require significant judgment or estimate. There were no transfers between levels between December 31, 2015 and December 31, 2014. Fair value measurement hierarchy Fair value 2015 Fair value 2014 Assets Cash and banks Level 1 1,111,840 532,285 Cash equivalents Level 2 13,786,223 1,916,921 Short-term investments Level 2 1,927,686 282,700 Derivative financial instruments Level 2 7,386,703 3,221,481 Available-for-sale financial asset (Note 26) Level 3 3,541,314 4,284,416 Liabilities Derivative financial instruments Level 2 2,510,343 666,922 3.2. Measurement of financial assets and financial liabilities at amortized cost The fair value of the financial instruments mentioned below are substantially close to its carrying amounts due to the following reasons: • Accounts receivables: near-term maturity of bills. • Trade payables, dividends and interests on capital: all obligations are due to be settled in the short term. • Borrowings and financing: all transactions are adjusted for inflation based on contractual indices. • Licenses and concessions payable, tax refinancing program and other payables (payable for the acquisition of equity interests): all payables are adjusted for inflation based on the contractual indices. 3.3. Financial risk management The Company’s and its subsidiaries’ activities an exposed them to several financial risks, such as: market risk (including currency variation risk, interest rate risk on fair value, interest rate risk on cash flows, and price risk), credit risk, and liquidity risk. The Company and its subsidiaries use derivative financial instruments to mitigate certain exposures to these risks. Risk management is carried out by the Company’s treasury officer, in accordance with the policies approved by management. The Hedging and Cash investments Policies, approved by the Board of Directors, document the management of exposures to market risk factors generated by the financial transactions of Oi Group companies. Under Company policies, market risks are identified based on the features of financial transactions contracted and to be contracted during the year. Several scenarios are then simulated for each of the risk factors using statistical models, used as basis to measure the impacts on Group’s financial income (expenses). The Board of Directors meeting of January 2016 widened this concept, to also monitor impacts on Group’s financial cash flow, gross debt and net debt. Based on this analysis, the Executive Committee annually agrees with the Board of Directors a guideline to be followed in each financial year. To ensure a proper risk management, the Company can contract and reverse hedging instruments, including derivative transactions such as swaps and currency forwards. The contract of such instruments depends on, among other factors, available funds within the credit limit set by banks. The Company and its subsidiaries do not use derivative financial instruments for other purposes. According to their nature, financial instruments may involve known or unknown risks, and it is important to assess to the best judgment the potential of these risks. 3.4.1. Market risk (a) Foreign exchange risk Financial assets Foreign currency-denominated cash equivalents and short-term investments are basically maintained in securities issued by financial institutions abroad similar to Bank Certificates of Deposit (CDBs) traded in Brazil (time deposits), and euro-denominated time deposits and United States dollars (“dollar” or “dollars”). The risk associated to these assets arises from the possible exchange rate changes that may reduce the balance of these assets when translated into Brazilian reais. The Company’s and its subsidiaries’ assets subject to this risk represent approximately 73.22% (11.41% at December 31, 2014) of our total cash and cash equivalents and short-term investments. Net investment in foreign subsidiaries The risks related to the Company’s investments in foreign currency arise mainly from the investments in the subsidiaries in Africa. The Company does not have any contracted instrument to hedge against the risk associated to the net investments in foreign companies. Foreign exchange risk sensitivity analysis Management estimated the impact of a potential depreciation of the euro and the US dollar by 25% and 50%, using as benchmark for the possible and remote scenarios, respectively, as follows: Rate Description 2015 Depreciation Probable scenario US dollar 3.9048 0 % Euro 4.2504 0 % Possible scenario US dollar 2.9286 25 % Euro 3.1878 25 % Remote scenario US dollar 1.9524 50 % Euro 2.1252 50 % 2015 Description Individual risk Probable scenario Possible scenario Remote scenario US dollar cash Dollar 642,418 481,814 321,209 Euro cash Euro 12,438,363 9,328,772 6,219,182 Total associated to exchange rates 13,080,781 9,810,586 6,540,391 Financial liabilities The Company and its subsidiaries have foreign currency-denominated or foreign currency-indexed borrowings and financing. The risk associated with these liabilities is related to the possibility of changes in foreign exchange rates that could increase the balance of such liabilities. The Company and subsidiaries borrowings and financing exposed to this risk represent approximately 78.5% (41.7% at December 31, 2014) of total liabilities from borrowings and financing, less the contracted currency hedging transactions. In order to minimize this type of risk, we enter into foreign exchange hedges with financial institutions. Of the consolidated foreign currency-denominated debt, 99.5% (100.0% at December 31, 2014) is protected by exchange swaps, currency forwards, and short-term investments in foreign currency. The cash denominated in euros and in US dollar operates as a natural hedge for the foreign denominated debt. These foreign currency-denominated financial assets and financial liabilities are presented in the balance sheet as follows: 2015 2014 Carrying amount Fair value Carrying amount Fair value Financial assets Cash and banks 761,788 761,788 26,759 26,759 Cash equivalents 10,553,452 10,553,452 198,047 198,047 Short-term investments 1,765,541 1,765,541 86,807 86,807 Derivative financial instruments 6,940,963 6,940,963 3,025,464 3,025,464 Financial liabilities Borrowings and financing (Note 16) 46,935,152 30,727,817 14,781,242 14,342,043 Derivative financial instruments 1,915,910 1,915,910 425,784 425,784 Derivative financial instruments are summarized as follows: Derivatives designated for hedge accounting Maturity (years) Fair value Amounts (payable)/receivable 2015 2014 US$/R$ cross currency swaps 0.1 - 8.2 4,954,291 1,816,206 US$/fixed rate cross currency swaps 4.8 819,647 649,293 EUR/R$ cross currency swaps 1.9 - 4.3 (169,513 ) EUR/R$ non-deliverable forwards (NDFs) < 1 year 23,524 Derivatives not designated for hedge accounting Maturity (years) Fair value Amounts (payable)/receivable 2015 2014 US$/R$ cross currency swaps < 1 year 31,467 24,122 R$/US$ cross currency swaps < 1 year (27,965 ) (31,290 ) US$/R$ non-deliverable forwards (NDFs) < 1 year (156,707 ) 107,718 EUR/R$ non-deliverable forwards (NDFs) < 1 year (427,452 ) 10,107 Options (USD/R$ put option) 3.3 - 4.8 8,783 Options (EUR/R$ put option) 3.8 24,767 Options (EUR/R$ call option) 3.8 (32,265 ) The main foreign currency hedge transactions contracted with financial institutions to minimize the foreign exchange risk are as follows: Cross currency swap contracts (plain vanilla) US$/R$: Refer to foreign exchange swaps to protect its US dollar-denominated debt payments. Under these contracts, the asset position is in US dollars plus a fixed interest rate or in US LIBOR plus a fixed interest rate, and the liability position a percentage of interbank deposit rate (CDI) or a fixed rate in Brazilian Real. The main risk of loss in the asset position of these instruments is the US dollar exchange rate change; however, such losses would be fully offset by the US dollar-denominated debt’s maturities. R$/US$: Refer to foreign exchange swaps to reverse swap contracts. Under these contracts, the asset position is in US dollar plus a fixed rate and the liability position is a percentage of CDI. The main risk of loss in the liability position of these instruments is the US dollar exchange rate change; however, such possible losses would be fully offset by the maturities of the reversed US dollar-denominated swaps. Non-deliverable forwards (NDFs) US$/R$: Refer to future US dollar purchase transactions using NDFs to hedge against a depreciation of the Brazilian real in relation to the US dollar. The main strategy for these contracts is to set the foreign exchange rate for the contract period at a fixed amount, thus mitigating the risk of adverse fluctuations on US dollar-denominated debt. In order to extend the hedging period, we can roll over these instruments by selling US dollars for the period equivalent to the short-term NDF in the portfolio and simultaneously purchase US dollars for longer positions. Euro/R$: Refer to future Euro dollar purchase transactions using NDFs to hedge against a depreciation of the Brazilian real in relation to the US dollar. The main strategy for these contracts is to set the foreign exchange rate for the contract period at a fixed amount, thus mitigating the risk of adverse fluctuations on euro-denominated debt. In order to extend the hedging period, we can roll over these instruments by selling euro for the period equivalent to the short-term NDF in the portfolio and simultaneously purchase euro for longer positions. Options (put options) Refers to the purchase of dollar put options related to debt’s principal to hedge against an appreciation of the real against the dollar. The main strategy of these options is to set a threshold foreign exchange rate for a set of swaps during the contract period, thus mitigating unfavorable changes in the long position of these derivatives. As at December 31, 2015 and 2014, the derivative transactions in the amounts shown below were recognized in financial income (expenses) (see Note 6): 2015 2014 Gain (loss) on currency swaps 4,539,844 674,228 Currency forwards 1,322,916 (317,740 ) Options (21,850 ) Total 5,840,910 356,488 The movements below, related to currency hedges designated for hedge accounting treatment, were recognized in other comprehensive income: Table of movements in hedge accounting effects in other comprehensive income Balance in 2012 128,127 Loss on designated hedges (126,511 ) Transfer on ineffective portion to profit or loss (16,611 ) Amortization of hedges to profit or loss at effective rate 36,072 Deferred taxes on hedge accounting 36,397 Balance in 2013 57,474 Gain on designated hedges 143,524 Transfer on ineffective portion to profit or loss 10,443 Amortization of hedges to profit or loss at the effective rate 9,081 Deferred taxes on hedge accounting (55,437 ) Balance in 2014 165,085 Gain on designated hedges (697,726 ) Transfer on ineffective portion to profit or loss (7,626 ) Amortization of hedges to profit or loss at the effective rate 8,336 Deferred taxes on hedge accounting 236,985 Balance in 2015 (294,946 ) (a.1) Foreign exchange risk sensitivity analysis As at December 31, 2015, management estimated the depreciation scenarios of the Brazilian real in relation to other currencies at yearend. The rates used for the probable scenario were the rates prevailing at the end of December 2015. The probable rates were then depreciated by 25% and 50% and used as benchmark for the possible and remote scenarios, respectively. Rate Description 2015 Depreciation Probable scenario US dollar 3.90480 0 % Euro 4.25040 0 % Possible scenario US dollar 4.88100 25 % Euro 5.31300 25 % Remote scenario US dollar 5.85720 50 % Euro 6.37560 50 % As at December 31, 2015, management estimated the outflow for the payment of interest and principal of its debt associated to exchange rates based on the interest rates prevailing at the end of this annual reporting period and the exchange rates above. The impacts of foreign exchange exposure, in the sensitivity scenarios estimated by the Company, are shown in the table below: 2015 Description Individual risk Probable scenario Possible scenario Remote scenario US dollar debt Dollar appreciation 23,054,987 28,818,734 34,582,481 Derivatives (net position - US$) Dollar depreciation (22,470,237 ) (28,087,796 ) (33,705,356 ) US dollar cash Dollar depreciation (642,418 ) (803,023 ) (963,627 ) Euro debt Euro appreciation 24,316,758 30,395,948 36,475,137 Derivatives (net position - euro) Euro depreciation (11,606,953 ) (14,508,691 ) (17,410,430 ) Euro cash Euro depreciation (12,438,363 ) (15,547,954 ) (18,657,545 ) Total associated to exchange rates 213,774 267,218 320,660 (b) Interest rate risk Financial assets Cash equivalents and short-term investments in local currency are substantially maintained in financial investment funds exclusively managed for the Company and its subsidiaries, and investments in private securities issued by prime financial institutions. The interest rate risk linked to these assets arises from the possibility of decreases in these rates and consequent decrease in the return on these assets. Financial liabilities The Company and its subsidiaries have borrowings and financing subject to floating interest rates, based on the Long-term Interest Rate (TJLP) or the CDI, in the case of real-denominated debt, and on the LIBOR, in the case of U.S. dollar-denominated debt. As at December 31, 2015, approximately 33.4% (60.3% at December 31, 2014) of the incurred debt, less adjustment for derivative transactions, was subject to floating interest rates. After the derivative transactions, approximately 59.6% (79.4% at December 31, 2014) of the consolidated debt was subject to floating interest rates. The most material exposure of Company’s and its subsidiaries’ debt after the hedging transactions is to CDI. Therefore, a continued increase in this interest rate would have an adverse impact on future interest payments and hedging adjustments. We continuously monitor these market rates to assess the possible contracting of derivatives to reduce the risk of fluctuation of these rates. These assets and liabilities are presented in the balance sheet as follows: 2015 2014 Carrying amount Fair value Carrying amount Fair value Financial assets Cash equivalents 3,232,771 3,232,771 1,718,874 1,718,874 Short-term investments 162,145 162,145 195,893 195,893 Derivative financial instruments 445,740 445,740 196,017 196,017 Financial liabilities Borrowings and financing 18,307,705 18,298,218 17,722,928 17,717,628 Derivative financial instruments 594,433 594,433 241,138 241,138 The amounts of contracted derivatives to manage exposure to floating interest rates on outstanding debt are summarized below: Derivatives designated for hedge accounting Maturity (years) Fair value Amounts (payable)/receivable 2015 2014 Fixed rate/DI rate swaps 4.8 (146,121 ) (37,627 ) US$ LIBOR/US$ fixed rate swaps < 1 year (1,413 ) Derivatives not designated for hedge accounting Maturity (years) Fair value Amounts (payable)/receivable 2015 2014 US$ LIBOR/US$ fixed rate swaps 0.1- 6.1 (448,312 ) (200,771 ) US$ fixed rate/US$ LIBOR swaps 6.1 445,740 194,690 The main derivative transactions contracted with financial institutions to minimize the interest rate risk are as follows: Interest rate swaps US$ LIBOR/US$ fixed rate: Refer to interest rate swaps to protect debt payments associated to US dollar floating rates from exchange fluctuation. Under these contracts, the asset position in US dollar LIBOR and the liability position is a fixed rate. The risk of loss in the asset position of these instruments is, therefore, the fluctuation of the US dollar LIBOR; however, such possible losses would be fully offset by maturities of US dollar-denominated US$ fixed rate/US$ LIBOR: Refers to the interest rate swap transaction that changes US dollar-denominated debt payments from fixed rate to floating rate. Under this contract, the asset position is a US dollar fixed rate and the liability position is subject to LIBOR aimed at reducing the cost of the underlying debt, as part of the Company’s interest-bearing liabilities management strategy. R$ fixed rate/CDI: Refer to interest rate swaps to convert a foreign exchange swap liability position at a fixed rate into R$ to a liability subject to a DI percentage. This transaction is intended to swap the foreign exchange fluctuation of a certain dollar-denominated debt to a floating DI position, cancelling the debt’s current fixed rate position. As at December 31, 2015 and 2014, the amounts shown below were recorded as gain or loss on derivatives: (see Note 6). 2015 2014 Gain (loss) on interest rate swap (43,808 ) 70,896 Total (43,808 ) 70,896 The movements below, related interest rate hedges designated for hedge accounting treatment, were recognized in other comprehensive income: Table of movements in hedge accounting effects in other comprehensive income Balance in 2012 12,057 Loss on designated hedges (80,487 ) Transfer on ineffective portion to profit or loss 500 Amortization of hedges to profit or loss at effective rate (24,075 ) Deferred taxes on hedge accounting 35,381 Balance in 2013 (56,624 ) Gain on designated hedges 20,029 Transfer on ineffective portion to profit or loss (97 ) Amortization of hedges to profit or loss at the effective rate 3,070 Deferred taxes on hedge accounting (7,820 ) Share of subsidiary’s hedge accounting Balance in 2014 (41,442 ) Gain on designated hedges (104,339 ) Transfer on ineffective portion to profit or loss 78 Amortization of hedges to profit or loss at the effective rate 3,325 Deferred taxes on hedge accounting 34,319 Balance in 2015 (108,059 ) (b.1) Interest rate fluctuation risk sensitivity analysis Management believes that the most significant risk related to interest rate fluctuations arises from its liabilities associated to the TJLP, the USD LIBOR, and mainly the CDI. This risk is associated to an increase in those rates. As at December 31, 2015, management estimated the fluctuation scenarios of the rates CDI, TJLP and USD LIBOR. The rates used for the probable scenario were the rates prevailing at the end of the reporting period. These rates have been stressed by 25 and 50 percent, and used as benchmark for the possible and remote scenarios. Important to consider that in the beginning of January 2015, the TJLP increased from 5.0% p.a. to 5.5% p.a., which was the start of successive increases. For the quarter beginning April 2015, the TJLP increased to 6.0%, remaining at 6.5% in July and in October 1-December 31, 2015 it increased to 7.0%. Before the end of the first quarter of 2016, the National Monetary Council had decided for a new increase for this rate, this time to 7.5% p.a., effective in January 1 - March 31, 2016. 2015 Interest rate scenarios Probable scenario Possible scenario Remote scenario CDI TJLP 6M USD LIBOR CDI TJLP 6M USD LIBOR CDI TJLP 6M USD 14.14 % 7.0 % 0.84615 % 17.68 % 8.8 % 1.05769 % 21.21 % 10.5 % 1.26923 % As at December 31, 2015, management estimated the future outflows for the payment of interest and principal of its debt associated to CDI, TJLP, and USD LIBOR based on the interest rates above. Such sensitivity analysis considers payment outflows in future dates. Thus, the aggregate of the amounts for each scenario is not equivalent to the fair values, or even the present values of these liabilities. The fair values of these liabilities, should the Company’s credit risk remain unchanged, would not be impacted in the event of fluctuations in interest rates, as the interest rates used to estimate future cash outflows would be the same rates that discount such flows to present value. The impacts of exposure to interest rates, in the sensitivity scenarios estimated by the Company, are shown in the table below: 2015 Transaction Individual risk Probable Possible Remote CDI-indexed debt CDI increase 2,120,449 2,516,488 2,980,156 Derivative financial instruments (net position - CDI) CDI increase 10,669,673 13,047,050 15,566,283 TJLP-indexed debt TJLP increase 942,049 1,119,643 1,304,957 US$ LIBOR-indexed debt US$ LIBOR increase 562,123 660,468 715,699 Derivative instruments (net position - LIBOR) US$ LIBOR decrease (198,734 ) (211,566 ) (231,488 ) Total associated to interest rates 14,095,560 17,132,083 20,335,607 3.4.2. Credit risk The concentration of credit risk associated to trade receivables is immaterial due to the diversification of the portfolio. Doubtful receivables are adequately covered by an allowance for doubtful accounts. Transactions with financial institutions (short-term investments and borrowings and financing) are made with prime entities, avoiding the concentration risk. The credit risk of financial investments is assessed by setting caps for investment in the counterparts, taking into consideration the ratings released by the main international risk rating agencies for each one of such counterparts. As at December 31, 2015, approximately 99.20% of the consolidated short-term investments were made with counterparties with an AAA, AA or sovereign risk rating. The Company had credit risks related to dividends receivable associated to the investment in Unitel (Note 26). 3.4.3. Liquidity risk The liquidity risk also arises from the possibility of the Company being unable to settle its liabilities on maturity dates and obtain cash due to market liquidity restrictions. During 2015, our operations generated negative cash flows of R$1,054 million. As a result, we financed investing activities, debt service and working capital from our cash and cash equivalents and short-term cash investments. Historically, we have financed our investments in property, plant and equipment through the use of bank loans, vendor financing, capital markets and other forms of financing. As of December 31, 2015, our consolidated cash and cash equivalents and short-term cash investments amounted to R$16,700 million and our consolidated indebtedness amounted to R$ 59,857million. We anticipated that we will be required to spend approximately R$19,725 million to meet our short-term contractual obligations and commitments during 2016, and an additional approximately R$30,672 million to meet our long-term contractual obligations and commitments in 2017 and 2018. On March 9, 2016, we announced that we had retained PJT Partners as our financial advisor to assist us in evaluating financial and strategic alternatives to optimize our liquidity and debt profile. On April 25, 2016, we entered into a customary non-disclosure agreement with Moelis & Company, who acts as advisor for a diverse ad hoc group of holders of the bonds issued by Oi and its subsidiaries, as an initial step towards discussions of a potential restructuring of its indebtedness. The following are the contractual maturities of the financial liabilities, including estimated interest payments, where applicable: Less than One to Three Three to More than Total (in millions of reais ) Continuing operations: Loans and financings (i) R$ 15,282 R$ 24,998 R$ 16,894 R$ 6,243 R$ 63,417 Debentures (ii) 1,622 4,170 17 — 5,809 Unconditional purchase obligations (iii) 1,477 758 343 — 2,578 Concession fees (iv) 288 306 348 1,437 2,379 Usage rights (v) 912 7 — — 919 Pension plan contributions (vi) 144 433 289 577 1,443 R$ 19,725 R$ 30,672 R$ 17,891 R$ 8,257 R$ 76,545 The amounts disclosed in the tables take into account the contractual undiscounted payment outflow estimates, these amounts are not reconciled with the amounts disclosed in the balance sheet for borrowings and financing, derivative financial instruments, and trade payables. (i) Includes (1) estimated future payments of interest on our loans and financings, calculated based on interest rates and foreign exchange rates applicable at December 31, 2015 and assuming that all amortization payments and payments at maturity on our loans and financings will be made on their scheduled payment dates, and (2) estimated future cash flows on our derivative obligations, calculated based on interest rates and foreign exchange rates applicable as of December 31, 2015 and assuming that all payments on our derivative obligations will be made on their scheduled payment dates; (ii) Includes estimated future payments of interest on our debentures, calculated based on interest rates applicable as of December 31, 2015 and assuming that all amortization payments and payments at maturity on our debentures will be made on their scheduled payment dates; (iii) Consists of (1) obligations in connection with a business process outsourcing agreement, and (2) purchase obligations for network equipment pursuant to binding obligations which include all significant terms, including fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction; (iv) Consists of estimated bi-annual fees due to ANATEL under our concession agreements expiring in 2025. These estimated amounts are calculated based on our results for the year ended December 31, 2015; (v) Consists of payments due to ANATEL for radio frequency licenses. Includes accrued and unpaid interest as of December 31, 2015; and (vi) Consists of expected contributions to amortize the actuarial deficit of the BrTPREV plan. Capital management The Company seeks to manage its equity structure according to best market practices. The objective of the Company’s capital management strategy is to ensure that liquidity levels and financial leverage to allow the sustained growth of the Group, the compliance with the strategic investment plan, and generation of returns to our shareholders. The Company may change its capital structure, according to existing economic and financial conditions, to optimize its financial leverage and debt management (Note 1). The indicators commonly used to measure capital structure management are: gross debt to accumulated twelve-month EBITDA (earnings before interest (financial income and expenses), taxes, depreciation and amortization, and other nonrecurring results), net debt (gross debt less cash and cash equivalents and short-term investments) to accumulated twelve-month EBITDA, and the interest coverage ratio. 3.4.4. Risk of acceleration of maturity of borrowings and financing Under some debt instruments of the Company, default events can trigger the accelerated maturity of other debt instruments. The impossibility to incur in new debt might prevent the company from investing in its business and incur in required or advisable capital expenditures, which would reduce future sales and adversely impact its profitability. Additionally, the funds necessa |
NET OPERATING REVENUE
NET OPERATING REVENUE | 12 Months Ended |
Dec. 31, 2015 | |
Other Income and Expenses [Abstract] | |
NET OPERATING REVENUE | 4. NET OPERATING REVENUE 2015 2014 2013 Gross operating revenue 44,519,320 45,357,481 45,252,584 Deductions from gross revenue (17,165,555 ) (17,110,382 ) (16,830,437 ) Taxes (8,148,655 ) (8,906,909 ) (9,538,623 ) Discounts and other deductions (9,016,900 ) (8,203,473 ) (7,291,814 ) Net operating revenue 27,353,765 28,247,099 28,422,147 |
OPERATING EXPENSES
OPERATING EXPENSES | 12 Months Ended |
Dec. 31, 2015 | |
Text Block [Abstract] | |
OPERATING EXPENSES | 5. OPERATING EXPENSES 2015 2014 2013 Operating expenses by nature Third-party services (6,317,233 ) (6,258,606 ) (6,119,733 ) Depreciation and amortization (6,195,039 ) (5,766,702 ) (5,691,824 ) Rentals and Insurance (3,599,830 ) (3,119,521 ) (2,119,684 ) Personnel (2,719,530 ) (2,829,307 ) (2,534,222 ) Network maintenance service (1,901,569 ) (1,923,074 ) (2,328,140 ) Interconnection (1,808,845 ) (2,689,815 ) (3,965,623 ) Contingencies (861,500 ) (779,314 ) (656,849 ) Allowance for doubtful accounts (721,175 ) (649,463 ) (922,779 ) Advertising and publicity (405,626 ) (674,275 ) (556,500 ) Handset and other costs (284,637 ) (730,444 ) (515,377 ) Impairment losses (i) (590,641 ) Taxes and other income (expenses) (1,013,056 ) (1,459,012 ) (1,397,982 ) Other operating income (expenses), net (ii) 277,954 3,245,643 2,369,555 (26,140,727 ) (23,633,890 ) (24,439,158 ) Operating expenses by function Cost of sales and/or services (16,250,083 ) (16,257,192 ) (16,466,773 ) Selling expenses (4,719,811 ) (5,565,757 ) (5,532,045 ) General and administrative expenses (3,912,178 ) (3,834,563 ) (3,683,440 ) Other operating income 1,630,056 4,466,914 3,193,024 Other operating expenses (2,866,828 ) (2,437,411 ) (1,932,174 ) Equity pick up (21,883 ) (5,881 ) (17,750 ) Total operating expenses (26,140,727 ) (23,633,890 ) (24,439,158 ) (i) As at December 31, 2015, the Company conducted the annual impairment test and recognized a loss on goodwill amounting to R$501,465 related to goodwill and trademarks for the Telecommunication services in Brazil due to a significant change in the macroeconomic conditions in Brazil and R$89,176 related to Africa which is being reported as held for sale. The fair value of the reporting unit was estimated using the expected present value of future cash flows. (ii) The other net operating income (expenses) for the year ended December 31, 2015 primarily include the reversal of a civil contingency amounting to R$325,709 arising from the revision of the calculation methodology and R$47,756 in costs relating to terminations of employments contracts in this period. Other net operating income (expenses) for the year ended December 31, 2014 primarily includes the gain of R$2.4 billion on the sale, net of transaction expenses, recognized in the context of the agreement entered into on December 3, 2013 by the Company and SBA Torres Brasil for the transfer of 100% of the shares of one of its subsidiaries that held 2,007 telecommunication towers used to provide mobile telephony services and R$355 million resulting from the revision of the calculation methodology of the provisions for losses in corporate lawsuits and the reversal of R$476 million from the provision related to the adhesion to the REFIS tax refinancing program. |
FINANCIAL INCOME (EXPENSES)
FINANCIAL INCOME (EXPENSES) | 12 Months Ended |
Dec. 31, 2015 | |
Other Income and Expenses [Abstract] | |
FINANCIAL INCOME (EXPENSES) | 6. FINANCIAL INCOME (EXPENSES) 2015 2014 2013 Financial income Exchange differences on translating foreign short-term investments (trading) 3,349,783 32,444 69,626 Interest on other assets 740,417 762,498 694,734 Income from short-term investments 235,042 354,526 278,598 Interest on related parties loans 29,057 1,066 Other income (i) 1,010,235 194,233 332,259 Total 5,364,534 1,344,767 1,375,217 Financial expenses and other charges a) Borrowing and financing costs Inflation and exchange losses on third-party borrowings (10,908,438 ) (1,464,510 ) (2,013,066 ) Interest on borrowings payable to third parties (3,178,461 ) (1,979,414 ) (1,591,915 ) Interest on debentures (871,977 ) (953,863 ) (860,400 ) Derivatives 5,797,102 427,384 1,158,520 Subtotal: (9,161,774 ) (3,970,403 ) (3,306,861 ) b) Other charges Loss on available for sale financial assets (ii) (447,737 ) Interest on other liabilities (833,276 ) (814,148 ) (643,318 ) Tax on transactions and bank fees (712,799 ) (385,824 ) (193,048 ) Inflation adjustment to provisions (176,297 ) (233,276 ) (246,205 ) Interest on taxes in installments - tax financing program (93,784 ) (132,194 ) (81,262 ) Other expenses (iii) (476,875 ) (357,844 ) (206,479 ) Subtotal: (2,740,768 ) (1,923,286 ) (1,370,312 ) Total (11,902,542 ) (5,893,689 ) (4,677,173 ) Financial income (expenses) (6,538,008 ) (4,548,922 ) (3,301,956 ) (i) Refers basically to the gain on debenture repayment transactions and includes USD187.5 million (R$733 million) related with our portion of dividends approved by Unitel. (ii) Refers basically to the loss of R$408 million due to other-than-temporary impairment of the investment in Unitel classified as available-for-sale. (iii) Represented mainly by financial fees and commissions. |
CASH, CASH EQUIVALENTS AND SHOR
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS | 12 Months Ended |
Dec. 31, 2015 | |
Cash and Cash Equivalents [Abstract] | |
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS | 7. CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS Short-term investments made by the Company and its subsidiaries in the years ended December 31, 2015 and 2014, are classified as trading securities and are measured at their fair values. (a) Cash and cash equivalents 2015 2014 Cash and banks 1,111,840 532,285 Cash equivalents 13,786,223 1,916,921 Total 14,898,063 2,449,206 2015 2014 Time deposits 10,734,985 205,523 Bank certificates of deposit (CDBs) 1,387,158 920,116 Repurchase agreements 1,637,798 773,487 Other 26,282 17,795 Cash equivalents 13,786,223 1,916,921 (b) Short-term investments 2015 2014 Time deposits 1,700,386 Private securities 125,966 111,285 Government securities 101,334 171,415 Total 1,927,686 282,700 Current 1,801,720 171,415 Non-current 125,966 111,285 The Company and its subsidiaries hold short-term investments in Brazil and abroad for the purpose of earning interest on cash, benchmarked to CDI in Brazil, LIBOR for the US dollar-denominated portion, and EURIBOR for the euro-denominated portion. |
TRADE ACCOUNTS RECEIVABLE, NET
TRADE ACCOUNTS RECEIVABLE, NET | 12 Months Ended |
Dec. 31, 2015 | |
Receivables [Abstract] | |
TRADE ACCOUNTS RECEIVABLE, NET | 8. TRADE ACCOUNTS RECEIVABLE, NET 2015 2014 Billed services 6,733,219 5,481,028 Unbilled services 1,296,562 1,450,777 Mobile handsets and accessories sold 911,077 1,032,022 Allowance for doubtful accounts (561,139 ) (513,787 ) Total 8,379,719 7,450,040 The aging list of trade receivables is as follows: 2015 2014 Current 6,855,027 5,878,915 Past-due up to 60 days 1,296,612 1,388,330 Past-due from 61 to 90 days 146,608 136,200 Past-due from 91 to 120 days 121,916 113,212 Past-due from 121 to 150 days 124,887 102,139 Over 150 days past-due 395,808 345,031 Total 8,940,858 7,963,827 The movements in the allowance for doubtful accounts were as follows: Balance at Jan 1, 2014 (654,042 ) Acquisition of investments - PT Portugal (652,964 ) Allowance for doubtful accounts (684,017 ) Trade receivables written off as uncollectible 712,128 Foreign exchange differences 6,841 Transfer to assets held for sale 758,267 Balance in 2014 (513,787 ) Allowance for doubtful accounts (692,935 ) Trade receivables written off as uncollectible 645,583 Balance in 2015 (561,139 ) |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 9. INCOME TAXES (a) Tax rate reconciliation Income taxes encompass the income tax and the social contribution in Brazil. The income tax rate is 25% and the social contribution rate is 9%, an aggregate nominal tax rate of 34%. Income tax expense attributable to income (loss) from continuing operations was an income tax expense of R$3,379,927, R$758,268 and R$76,610 for the years ended December 31, 2015, 2014 and 2013, respectively. Total income taxes for the years ended December 31, 2015, 2014 and 2013 were allocated as follows: 2015 2014 2013 Income (expenses) from continuing operations (3,379,927 ) (758,268 ) (76,610 ) Expenses from discontinued operations (327,115 ) (92,545 ) Total income tax recognized in earnings (3,707,042 ) (850,813 ) (76,610 ) Income tax recognized in other comprehensive income (194,020 ) 243,333 (17,514 ) Income tax expense attributable to income from continuing operations consists of: 2015 2014 2013 Income tax and social contribution Current taxes (781,576 ) (622,001 ) (418,498 ) Deferred taxes (2,598,351 ) (136,267 ) 341,888 Total (3,379,927 ) (758,268 ) (76,610 ) The tax rate reconciliation from continuing operation consists of the following: 2015 2014 2013 Income (loss) before taxes (i) (5,324,970 ) 64,287 681,033 Income tax and social contribution Income tax and social contribution at statutory rate (34%) 1,810,490 (21,858 ) (231,552 ) Valuation allowance (ii) (4,755,151 ) 5,848 (68,654 ) Effect of foreign rate differential (iii) (106,388 ) (23,795 ) (13,046 ) Tax effects on permanent additions (iv) (268,989 ) (688,719 ) (76,433 ) Tax effects on permanent exclusions 114,052 376,241 280,844 Tax effect of REFIS permanent additions (v) (443,401 ) Tax incentives (basically, operating income) (vi) 7,332 36,281 31,573 Tax amnesty program (vii) (165,676 ) — — Other (15,597 ) 1,135 658 Income tax and social contribution effect on profit or loss (3,379,927 ) (758,268 ) (76,610 ) (i) In 2013, substantially all pre tax income and income tax are related to Brazilian Companies. In 2015 and 2014 income before taxes and income tax for continuing operations is as follows: 2015 Brazil Foreign operations Total Income (loss) before taxes (4,428,005 ) (896,965 ) (5,324,970 ) Income tax (3,191,186 ) (188,741 ) (3,379,927 ) Current taxes (589,090 ) (192,486 ) (781,576 ) Deferred taxes (2,602,096 ) 3,745 (2,598,351 ) 2014 Brazil Foreign Total Income (loss) before taxes (145,581 ) 209,868 64,287 Income tax (615,406 ) (142,862 ) (758,268 ) Current taxes (479,061 ) (142,940 ) (622,001 ) Deferred taxes (136,345 ) 78 (136,267 ) (ii) Refers to valuation allowance due to change in judgment about the recoverability of deferred tax assets. The change in the beginning-of-the year balance of the valuation allowance due to change in judgment about the recoverability of deferred tax assets amounts to R$2,845,521. (iii) Refers to the effects of the difference between the applicable tax rate in Brazil and the tax rates applicable to other Group companies located abroad. (iv) In 2015 the main effects of permanent addition refers to: (1) the impairment of Unitel available-for-sale investment which is not tax deductible in the amount of R$152 million (Note 26), (2) the impairment of goodwill and trademarks for the Telecommunication services in Brazil and impairment of goodwill related to África, which is not tax deductible in the amount of R$91 million and (3) nondeductible fines in the amount of R$25 million. In 2014 the main effects refers to the impairment of PT SGPS shares held subsidiary TMAR which is not tax deductible in the amount of R$266 million. (v) In 2014, the main effects are linked to goodwill amortization (pre-merger period), settlement of principal, fine and interest utilizing tax loss carryforwards as permitted by Article 2 of Law 12996/2014 and Article 33 of Law 13043/2014. (vi) These tax incentives correspond mainly to a 75% reduction in the current income tax due on operating income obtained as a result of telecommunication services rendered in certain northern and northeast regions of Brasil, where the Company holds facilities for the purpose of rendering those services. This tax benefit is usually granted for a 10 year period, limited up to January 1, 2024. (vii) Refers to uncertain tax position taken in prior periods which were assessed by the taxing authorities. Although the Company believed in prior periods that these positions would be more-likely-than-not of being sustained, it has decided to adhere to PRORELIT and avoid substantial costs to keep on going discussions with government. PRORELIT program allowed taxpayers to settle federal tax debts accrued prior to June 30th, 2015, excluding tax debts that are subject to tax installment payments. In order to enroll, tax payers were requested to resign of their litigation rights with respect to the settled debt amount and pay at least 30% of their outstanding consolidated tax debt accrued through June 30th, 2015 in cash. The remaining 70% of the debt would be settled with tax loss carryforwards. Apart from the initial 30% down payment, no guarantees or collateral is needed. The Company has submitted its application for PRORELIT to settle several tax debts. Nevertheless, tax authorities have a five years term to ratify the amounts of tax loss carryforwards utilized by taxpayers. A reconciliation of the beginning and ending amount of total unrecognized tax benefits for the year ended December 31, 2015 as follows: 2015 2014 Balance, beginning of year 84,650 84,650 Increase related to prior year tax position 165,676 Settlements (250,326 ) Balance, end of year 84,650 (b) Significant components of current and deferred taxes ASSETS 2015 2014 Current recoverable taxes Recoverable income tax (IRPJ) (i) 416,125 485,929 Recoverable social contribution (CSLL) (i) 153,059 182,772 IRRF/CSLL - withholding income taxes (ii) 346,389 428,488 Income taxes recoverable (v) 147,278 60,944 Total current 1,062,851 1,158,133 LIABILITIES 2015 2014 Current taxes payable Income tax payable 211,571 306,366 Social contribution payable 128,053 170,916 Total current 339,624 477,282 2015 2014 Deferred taxes assets Income tax and social contribution on merged goodwill (iii) 2,423,763 1,605,513 Income tax and social contribution on temporary differences (iv) 3,885,435 2,499,243 Income tax and social contribution on tax loss carryforwards (iv) 4,134,378 3,447,938 Total - deferred taxes assets 10,443,576 7,552,694 Business combinations – other intangibles (3,047,832 ) (3,464,404 ) Pension plan assets (299,574 ) (176,397 ) Total deferred tax liabilities (3,347,406 ) (3,640,801 ) Valuation allowance (iv) (6,239,713 ) (217,655 ) Total deferred taxes, net 856,457 3,694,238 (i) Refer mainly to prepaid income tax and social contribution that will be offset against federal taxes payable in the future. (ii) Refer to corporate income tax credits on short-term investments, related parties loans, government entities, and other that are used as deductions from income tax for the years, and social contribution withheld at source on services provided to government agencies. (iii) Refer to: (i) deferred income tax and social contribution assets calculated as tax benefit originating from the goodwill paid on acquisition by the Company and recognized by the merged companies in the course of 2009. The realization of the tax basis arises from the amortization of the goodwill balance based on the STFC license and in the appreciation of property, plant and equipment, the utilization of which is estimated to occur through 2025, and (ii) deferred income tax and social contribution assets originating from the goodwill paid on the acquisition of interests by the Company in 2008-2011, recognized by the companies merged with and into TmarPart and by TmarPart merged with and into the Company on September 1, 2015, which was based on the Company’s expected future earnings and the amortization of which is estimated to occur through 2025 (Note 1). (iv) For the year ended December 31, 2015, total valuation allowance increased from R$217,655 million to R$6,239,713 million, reflecting valuation allowance totaling R$6,022,058 recognized for the companies that, as at December 31, 2015, do not expect to generate sufficient future taxable profits, based on consistent assumptions and timing used in the analysis of the potential impairment of long-lived assets and goodwill, against which tax assets could be offset. Most of our deferred tax assets have been reduced by a valuation allowance to the amount supported by reversing taxable temporary difference. The deferred tax assets not offset by valuation allowance are dependent upon the generation of future pretax income in certain of our tax-paying components in Brazil that have a history of profitability and an expectation of continued profitability. Management believes it is more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets that are not subject to the valuation allowance. However, deferred income tax assets can be reduced in the near term if estimates of future taxable income during the carryforward period are reduced. The net changed in valuation allowance in 2014 was R$217,655. No valuation allowance was recorded prior to 2014. The tax loss carryfowards of approximately R$12,159,935, corresponding to R$4,134,378 million of deferred tax assets, do not expire, and may be carried forward indefinitely. (v) Refer mainly to prior years’ prepaid income tax and social contribution that will be offset against federal taxes payable. Movements in deferred income tax and social contribution Balance in Recognized in deferred tax income/ expenses Other comprehensive income Other Balance in 2015 Deferred tax assets arising on: Temporary differences Contingencies 1,668,750 (129,407 ) 1,539,343 Allowance for doubtful accounts 592,279 66,591 658,870 Profit sharing 86,534 (22,291 ) 64,243 Foreign exchange differences 556,389 1,221,972 1,778,361 Merged goodwill (i) 1,605,513 (164,517 ) 982,767 2,423,763 Hedge accounting (ii) (63,695 ) 271,303 207,608 Other temporary items (341,015 ) (89,489 ) 67,514 (362,990 ) Tax loss carryforwards Income tax loss carryforwards 2,513,846 731,485 (234,122 ) 3,011,209 Social contribution carryforwards 934,093 273,339 (84,263 ) 1,123,169 Total - deferred taxes assets 7,552,694 1,887,683 271,303 731,896 10,443,576 Business combinations – other intangibles (3,464,404 ) 416,572 (3,047,832 ) Provisions for pension funds (ii) (176,397 ) (68,500 ) (54,677 ) (299,574 ) Total deferred tax liabilities (3,640,801 ) 348,072 (54,677 ) (3,347,406 ) Valuation allowance (217,655 ) (4,755,151 ) (216,626 ) (1,050,281 ) (6,239,713 ) Total net deferred tax 3,694,238 (2,519,396 ) (318,385 ) 856,457 (i) As a result of the merger of TmarPart with and into Oi on September 1, 2015, the Company recognized the income tax and social contribution benefit arising on the utilization of goodwill paid on the acquisition of interests in the Company in 2008-2011, recognized by the companies merged with and into TmarPart and by TmarPart merged with and into the Company, which was based on the Company’s expected future earnings. (ii) Please see statements of comprehensive income for impacts attributed to other comprehensive income items as well as reclassification to earnings. |
OTHER TAXES
OTHER TAXES | 12 Months Ended |
Dec. 31, 2015 | |
Other Liabilities Disclosure [Abstract] | |
OTHER TAXES | 10. OTHER TAXES ASSETS 2015 2014 Recoverable State VAT (ICMS) (i) 1,285,800 1,512,543 Taxes on revenue (PIS and COFINS) 200,029 181,772 Other 97,056 101,851 Total 1,582,885 1,796,166 Current 922,986 1,054,255 Non-current 659,899 741,911 LIABILITIES 2015 2014 State VAT (ICMS) 759,922 709,126 ICMS Agreement No. 69/1998 33,998 80,287 Taxes on revenue (PIS and COFINS) 668,888 664,278 FUST/FUNTTEL/broadcasting fees 861,212 807,576 Other 153,968 281,059 Total 2,477,988 2,542,326 Current 1,553,651 1,667,599 Non-current 924,337 874,727 (i) Recoverable ICMS arises mostly from prepaid taxes and credits claimed on purchases of property, plant and equipment, which can be offset against ICMS payable within 48 months, pursuant to Supplementary Law 102/2000. |
JUDICIAL DEPOSITS
JUDICIAL DEPOSITS | 12 Months Ended |
Dec. 31, 2015 | |
Banking and Thrift [Abstract] | |
JUDICIAL DEPOSITS | 11. JUDICIAL DEPOSITS In some situations the Company makes, by legal requirement or to provide guarantees, judicial deposits to ensure the continuity of ongoing lawsuits. These judicial deposits can be required for lawsuits with a likelihood of loss, as assessed by the Company based on the opinion of its legal counsel, as probable, possible, or remote. 2015 2014 Civil 9,459,735 8,919,658 Tax 2,548,720 2,466,187 Labor 2,368,902 2,007,822 Total 14,377,357 13,393,667 Current 1,258,227 1,133,639 Non-current 13,119,130 12,260,028 As set forth by relevant legislation, judicial deposits are adjusted for inflation. |
INVESTMENTS
INVESTMENTS | 12 Months Ended |
Dec. 31, 2015 | |
Schedule of Investments [Abstract] | |
INVESTMENTS | 12. INVESTMENTS 2015 2014 Joint venture 63,837 74,803 Investments in associates 39,003 21,558 Tax incentives, net of allowances for losses 31,579 31,579 Other investments 20,471 20,471 Total 154,890 148,411 Summary of the movements in investment balances Balance at January 1, 2014 173,640 Share of profits of subsidiaries (5,881 ) Subsidiaries’ dividends and interest on capital (4,968 ) Other (14,380 ) Balance in 2014 148,411 Share of profits of subsidiaries (21,883 ) Associates’ share of other comprehensive income 11,266 Other 17,096 Balance in 2015 154,890 |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | 13. PROPERTY, PLANT AND EQUIPMENT Works in progress Automatic switching equipment Transmission and other equipment (i) Infrastructure Buildings Other assets Total Cost of PP&E (gross amount) Balance at Jan 1, 2014 4,569,682 19,476,331 45,332,907 26,991,988 3,598,183 5,201,130 105,170,221 Acquisition of investments - PT Portugal 452,844 6,004,681 4,537,199 16,357,177 2,957,154 9,693,740 40,002,795 Additions 3,029,820 63,899 997,941 308,985 92,788 271,954 4,765,387 Write-offs (2,083 ) (4,595 ) (75,547 ) (105,159 ) (2,146 ) (8,662 ) (198,192 ) Transfers (4,944,777 ) 317,773 6,045,939 (1,711,939 ) 592,592 (368,441 ) (68,853 ) Foreign exchange differences 20,468 288,829 255,552 785,557 148,022 469,466 1,967,894 Transfers to assets held for sale (468,545 ) (6,338,824 ) (4,900,950 ) (17,171,247 ) (2,995,379 ) (10,373,620 ) (42,248,565 ) Balance in 2014 2,657,409 19,808,094 52,193,041 25,455,362 4,391,214 4,885,567 109,390,687 Additions 2,893,198 14,274 270,031 15,792 185,588 243,459 3,622,342 Write-offs (4,737 ) (68,650 ) (521,106 ) (80,208 ) (15,659 ) (690,360 ) Transfers (3,894,026 ) 70,070 1,992,540 1,502,411 (209,257 ) 538,262 Other 135 780 18,370 19,285 Balance in 2015 1,656,581 19,887,701 54,387,097 26,453,239 4,287,337 5,669,999 112,341,954 Accumulated depreciation Balance at Jan 1, 2014 (17,075,110 ) (34,307,252 ) (21,505,346 ) (2,568,768 ) (3,988,687 ) (79,445,163 ) Acquisition of investments - PT Portugal (5,685,512 ) (3,169,003 ) (11,029,655 ) (1,238,292 ) (7,840,705 ) (28,963,167 ) Depreciation expenses (458,367 ) (2,700,926 ) (774,053 ) (189,874 ) (585,636 ) (4,708,856 ) Write-offs 3,521 61,653 51,428 (5,016 ) 7,921 119,507 Transfers (3,027 ) (2,132,253 ) 2,022,793 351,649 (145,499 ) 93,663 Foreign exchange differences (275,108 ) (168,315 ) (534,544 ) (63,973 ) (393,646 ) (1,435,586 ) Transfers to assets held for sale 6,032,368 3,559,523 11,706,376 1,273,000 8,621,957 31,193,224 Balance in 2014 (17,461,235 ) (38,856,573 ) (20,063,001 ) (2,441,274 ) (4,324,295 ) (83,146,378 ) Depreciation expenses (399,628 ) (2,225,984 ) (1,048,933 ) (107,140 ) (253,892 ) (4,035,577 ) Write-offs 3,496 66,245 519,546 63,234 14,433 666,954 Transfers (29,376 ) 94,258 (5,608 ) 53,913 (113,187 ) Other (109 ) (169 ) 0 (8,854 ) (9,132 ) Balance in 2015 (17,886,743 ) (40,922,163 ) (20,598,165 ) (2,431,267 ) (4,685,795 ) (86,524,133 ) Property, plant and equipment, net Balance in 2014 2,657,409 2,346,859 13,336,468 5,392,361 1,949,940 561,272 26,244,309 Balance in 2015 1,656,581 2,000,958 13,464,934 5,855,074 1,856,070 984,204 25,817,821 Annual depreciation rate (average) 11 % 10 % 8 % 8 % 12 % (i) Transmission and other equipment includes transmission and data communication equipment. Additional disclosures Pursuant to ANATEL’s concession agreements, all property, plant and equipment items capitalized by the Company that are indispensable for the provision of the services granted under said agreements are considered returnable assets and are part of the concession’s cost. These assets are surrendered to ANATEL upon the termination of not renewed concession agreements. As at December 31, 2015, the residual balance of the Company’s returnable assets is R$8,055,876 (R$8,199,356 at December 31, 2014) and consist of assets and installations in progress, switching and transmission equipment, payphones, outside network equipment, power equipment, and systems and operation support equipment. In the year ended December 31, 2015, financial charges and transaction costs incurred on works in progress were capitalized at the average rate of 10% per year (9% in 2014) and totaling R$15,463 (R$60,275 in 2014). |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | 14. INTANGIBLE ASSETS Goodwill Intangibles in progress Data processing systems Regulatory licenses (i) Customer portfolio Other Total Cost of intangibles (gross amount) Balance at Jan 1, 2014 409,012 184,387 6,657,925 18,994,358 1,588,916 27,834,598 Acquisition of investments - PT Portugal 10,574,704 52,819 575,983 1,656,050 3,215,523 3,091,687 19,166,766 Additions 487,895 248,470 282,688 1,019,053 Write-offs (1,574 ) (15,031 ) (16,605 ) Transfers (519,904 ) 451,615 36,401 (31,888 ) Foreign exchange differences 507,532 1,256 44,200 78,963 153,469 124,238 909,658 Transfers to assets held for sale (11,082,236 ) (48,161 ) (667,884 ) (1,736,767 ) (3,368,992 ) (3,291,736 ) (20,195,776 ) Balance in 2014 409,012 156,718 7,310,309 18,992,604 1,817,163 28,685,806 Additions 438,445 136,982 51,331 626,758 Transfers (469,322 ) 459,078 10,244 0 Other 92,453 1,382 93,835 Balance in 2015 501,465 125,841 7,907,751 18,992,604 1,878,738 29,406,399 Accumulated amortization 0 Balance at Jan 1, 2014 (5,348,057 ) (6,677,334 ) (1,143,075 ) (13,168,466 ) Acquisition of investments - PT Portugal (428,721 ) (514,850 ) (2,155,564 ) (3,099,135 ) Amortization expenses (571,298 ) (1,210,359 ) (169,982 ) (424,030 ) (2,375,669 ) Write-offs 11,673 0 26,373 38,046 Transfers (28,171 ) (26,246 ) (7,970 ) (89,734 ) (152,121 ) Foreign exchange differences (260 ) 260 Transfers to assets held for sale 489,838 578,878 177,952 2,378,692 3,625,360 Balance in 2014 (5,874,996 ) (7,849,911 ) (1,407,078 ) (15,131,985 ) Amortization expenses (662,068 ) (1,137,568 ) (191,901 ) (1,991,537 ) Other (1,276 ) (1,276 ) Balance in 2015 (6,538,340 ) (8,987,479 ) (1,598,979 ) (17,124,798 ) Intangible assets, net Balance in 2014 409,012 156,718 1,435,313 11,142,693 410,085 13,553,821 Subtotal 2015 501,465 125,841 1,369,411 10,005,125 279,759 12,281,601 Impairment Losses (501,465 ) (501,465 ) Balance in 2015 125,841 1,369,411 10,005,125 279,759 11,780,136 Annual amortization rate (average) 20 % 9 % 16 % (i) Includes mainly the fair value of intangible assets related to purchase of control of BrT (now Oi, S.A.). |
TRADE PAYABLES
TRADE PAYABLES | 12 Months Ended |
Dec. 31, 2015 | |
Payables and Accruals [Abstract] | |
TRADE PAYABLES | 15. TRADE PAYABLES 2015 2014 Infrastructure, network and plant maintenance materials 1,282,493 1,708,777 Services 3,059,394 1,985,629 Rental of polls and rights-of-way 372,103 445,642 Other 321,803 219,737 Total 5,035,793 4,359,785 |
LOANS AND FINANCING
LOANS AND FINANCING | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
LOANS AND FINANCING | 16. LOANS AND FINANCING Borrowings and financing by type 2015 2014 Maturity (principal and interest) TIR % Senior notes 38,670,111 12,737,364 Local currency 1,090,716 1,136,801 Dec 2015 to Sep 2016 11.62 Foreign currency (i) 37,579,395 11,600,563 Dec 2015 to Feb 2022 15.24 Financial institutions 17,540,795 15,778,442 CCB – Bank Credit Note 2,416,314 4,503,810 Dec 2015 to Jan 2028 12.08 Certificates of Real Estate Receivables (CRI) 1,397,504 1,496,674 Dec 2015 to Aug 2022 14.10 Development Banks and Export Credit Agencies 10,986,710 9,777,958 Dec 2015 to Dec 2033 12.28 Revolver credit facility 2,740,267 Dec 2015 to Oct 2016 21.65 Public debentures 4,144,760 7,807,389 Dec 2015 to Jul 2021 11.82 Subtotal 60,355,666 36,323,195 Incurred debt issuance cost (498,249 ) (473,800 ) Total 59,857,417 35,849,395 Current 11,809,598 4,463,728 Non-current 48,047,819 31,385,667 (i) On June 2, 2015, PT Portugal was sold to Altice S.A. As part of the PT Portugal sale process, the debt of PTIF previously classified as liabilities associated to held-for-sale assets remained with Oi, together with cash in similar amount, and was reclassified to the Company’s debt. The original debt consists basically of EMTN notes issued, maturing in 2016-2025. Breakdown of the debt by currency 2015 2014 Euro 24,221,508 2,412,691 US dollar 22,713,644 12,368,551 Brazilian reais 12,922,265 21,068,153 Total 59,857,417 35,849,395 Breakdown of the debt by index 2015 2014 Fixed rate 39,892,444 14,146,444 LIBOR 8,812,005 2,762,046 CDI 6,347,119 9,811,490 TJLP 3,148,581 5,149,392 IPCA 1,475,381 3,798,431 INPC 181,887 181,592 Total 59,857,417 35,849,395 Maturity schedule of the debt and debt issuance costs allocation schedule Debt 2016 11,927,129 2017 8,495,856 2018 6,532,989 2019 7,072,157 2020 14,563,635 2021 and following years 11,763,900 Total 60,355,666 Description of main borrowings and financing Senior Notes - foreign and local currency In June 2015, Oi Holanda issued senior notes in the amount of €600 million, bearing interest at 5.625% per annum and maturing in 2021, the proceeds of which are to be used to refinance Oi’s and its subsidiaries’ debt. Using this issue’s proceeds, the Company bought back a total of €148 million in previously issued notes maturing in February 2016, bearing interest at 5.625% and maturing in March 2016, bearing interest at 5.242%. Additionally, the Company notes maturing in February 2016, bearing interest at 5.625%, the notes maturing in March 2017, bearing interest at 5.242%, and the notes maturing in December 2017, bearing interest of 5.125% were exchanged for newly issued notes totaling €173 million. In July 2015, Portugal Telecom International Finance (PTIF) rebought for immediate cancelation 169,793 Notes from holders that opted to exercise the right to sell the retail bond’s senior notes issued in July 2012 originally amounting to €400 million. As at December 31, 2015 the Company held own debentures acquired in the market for approximately US$33 million, which it retains in its portfolio for cancellation or to be held to maturity. Financial institutions Development Banks and Export Credit Agencies The Company and its subsidiaries obtained financing facilities with BNDES and other development banks from the North and Northeast regions to finance and the upgrading of their nationwide fixed and mobile networks and to meet their regulatory obligations and obligations to the Export Credit Agencies of financing part of the investments in equipment and services that incorporate international technology. The main export credit agencies with that are the Company’s and its subsidiaries’ counterparties are: SEK – Swedish Export Corporation; CDB – China Development Bank; ONDD – Office National Du Ducroire; and FEC – Finnish Export Credit. In February 2015, US$42.8 million (R$123.2 million) were disbursed under a US$ 257 million financing agreement entered into by the Company with ONDD (“Office National Du Ducroire/Nationale Delcrederedienst”) in March 2013, to finance part of our investments. In March 2015, US$141.3 million (R$461.1 million) were disbursed under a US$397.4 million financing agreement entered into by Oi with Finnvera (“Finnish Export Credit Ltd”) in October 2014, to finance part of our investments. In December 2015, TMAR obtained new credit facilities with CDB - China Development Bank totaling US$1,200 million aimed at supporting the refinancing of its debt and the debt of its parent company Oi and financing the purchase of equipment and services from Huawei Technologies. The US$632.5 (R$2,515 million) was disbursed. The export credit facility guaranteed by EKN contained a requirement to prepay all outstanding amounts in the event that our credit rating was downgraded below Ba2 by Moody’s or BB by Fitch. As a result of the actions by these rating agencies, the Company was required to prepay the outstanding principal amount under this export credit agreement of R$202 million in April 2016. Revolver credit facility Disbursements from the revolver credit facility entered into by Oi with Citigroup Global Markets Inc., HSBC Securities (USA) Inc. Merril Lynch, Pierce, Fenner & Smith Incorporated, and RBS Securities Inc. included US$1,000 million in October 2011, and US$300 million (R$955.7 million) and US$400 million (R$1,167.7 million), in May 2015 and April, respectively. These amounts are intended to provide working capital to Oi and its subsidiaries or for other purposes in general. In September 2015, the Company prepaid the total disbursed amounting to R$1,300 million of the revolver credit facility raised with a syndicate of commercial banks, consisting of Banco do Brasil, Bradesco, HSBC, and Santander. This facility totals R$1,500 million. Public debentures In 2015, the Company rebought and immediately cancelled the following publicly distributed nonconvertible, unsecured debentures: (1) 38,965 debentures of the 9 th st th nd th th nd th Guarantees BNDES financing facilities are collateralized by receivables of the Company and its subsidiaries TMAR and Oi Móvel. The Company provides guarantees to its subsidiaries TMAR and Oi Móvel for such financing facilities, totaling R$2,684 million. Beginning May 5, 2014, the outstanding EMTN notes of subsidiary PTIF have been guaranteed by Oi amounting to R$19,228. Covenants The financing agreements of the Company and subsidiaries TMAR and Oi Móvel with the BNDES and other financial institutions, and the debentures issued contain covenants that require the Oi and/or TMAR, as applicable, to maintain certain financial ratios. Compliance with these covenants is determined either on a quarterly or an annual basis, depending on the financing agreement. In 2015, Oi renegotiated the terms of all of its debt covenants to a ratio of 6.00:1.00 total net debt-to-EBITDA. For some contracts this ratio should be revised back to its original terms during 2016 while for others this ratio will be in place until the end of 2016. Oi intends to renegotiate the terms of the contracts that will expire during the year 2016. As no covenant violation occurred up to the date that these financial statements were issued the debts are classified as current or non-current based on their original maturity. In addition, most of the renegotiated terms in effect for 2016 require Oi to use the net proceeds from the sale of PT Portugal to reduce its debt or make acquisitions as part of the consolidation of the Brazilian telecommunications industry. Under the Trust Deed governing each of the Bonds issued by PTIF (other than the PTIF 6.25% Notes due 2016), or the PTIF Bonds, we were required to file audited financial statements of PTIF as of and for the year ended December 31, 2014 with the Dutch Chamber of Commerce no later than January 31, 2016. On April 29, 2016, Citicorp Trustee Company Limited, the trustee under this Trust Deed, or the PTIF Trustee, delivered a written notice to PTIF and Oi noting that the failure of PTIF to provide the 2014 audited financial statements constituted a potential event of default under the PTIF Bonds and requesting the delivery of those financial statements. PTIF is continuing to work with its auditor to complete the preparation of its 2014 audited financial statements as soon as possible. The PTIF Trustee has notified PTIF that if PTIF fails to deliver the financial statements on or prior to May 29, 2016 and the PTIF Trustee determines that this failure is materially prejudicial to the interests of the holders of the PTIF Bonds, the PTIF Trustee could declare that the PTIF Bonds are immediately due and repayable. Under the terms of the PTIF Bonds, the PTIF Trustee is not obliged to exercise its discretion to declare any PTIF Bonds immediately due and repayable or to take any other action to enforce the rights of the holders of the PTIF Bonds unless it shall have been indemnified to its satisfaction and specifically directed or requested to do so by a requisite percentage of the holders of the PTIF Bonds in accordance with the terms and conditions of the PTIF Bonds. As of December 31, 2015 the total indebtedness was classified between short-term and long-term liabilities under the consolidated balance sheet based on the maturity of the debt instrument or contract. The terms of the instruments governing a substantial portion of our indebtedness contain cross-acceleration clauses and if any series of the PTIF Bonds were accelerated, this acceleration would enable the creditors under other indebtedness to accelerate that indebtedness. Were a substantial amount of our outstanding indebtedness to be accelerated, we may not have sufficient funds to repay such debt when due. Upon the closing of the financial statements for the year ended December 31, 2015 there was no covenants violation that would allow the acceleration of the maturity of other debts. Committed and unused credit facilities In December 2014 the Company signed a financing agreement with Banco do Nordeste do Brasil (BNB) in the amount of R$370.6 million to finance part of the investments in the Northeast of Brazil. There was no disbursement from this facility to date. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | 17. DERIVATIVE FINANCIAL INSTRUMENTS 2015 2014 Assets Currency swaps 6,805,084 2,871,904 Interest rate swaps 445,740 196,017 Non-deliverable forwards (NDFs) 102,329 153,560 Options 33,550 Total 7,386,703 3,221,481 Current 606,387 340,558 Non-current 6,780,316 2,880,923 Liabilities Currency swaps 1,197,157 413,573 Interest rate swaps 594,433 241,138 Non-deliverable forwards (NDFs) 686,488 12,211 Options 32,265 Total 2,510,343 666,922 Current 1,988,948 523,951 Non-current 521,395 142,971 |
LICENSES AND CONCESSIONS PAYABL
LICENSES AND CONCESSIONS PAYABLE | 12 Months Ended |
Dec. 31, 2015 | |
Contractors [Abstract] | |
LICENSES AND CONCESSIONS PAYABLE | 18. LICENSES AND CONCESSIONS PAYABLE 2015 2014 SMP 905,601 1,238,209 STFC concessions 12,936 123,731 Total 918,537 1,361,940 Current 911,930 675,965 Non-current 6,607 685,975 Licenses and concessions payable corresponds to the amounts payable to ANATEL for the radiofrequency concessions and the licenses to provide the SMP services, and STFC service concessions, obtained at public auctions. The payment schedule is as follows: 2016 911,930 2017 3,147 2018 3,147 2019 313 Total 918,537 |
TAX FINANCING PROGRAM
TAX FINANCING PROGRAM | 12 Months Ended |
Dec. 31, 2015 | |
Text Block [Abstract] | |
TAX FINANCING PROGRAM | 19. TAX FINANCING PROGRAM The outstanding balance of the Tax Debt Refinancing Program is broken down as follows: 2015 2014 Law 11941/09 and Law 12865/2013 tax financing program 791,696 983,904 REFIS II - PAES 3,392 6,326 Total 795,088 990,230 Current 78,432 94,041 Non-current 716,656 896,189 The amounts of the tax refinancing program created under Law 11941/2009, divided into principal, fine and interest, which include the debt declared at the time the deadline to join the program was reopened as provided for by Law 12865/2013 and Law 12996/2014, are broken down as follows: 2015 2014 Principal Fines Interest Total Total Tax on revenue (COFINS) 176,567 6,762 203,899 387,228 563,846 Income tax 42,576 4,201 54,120 100,897 119,447 Tax on revenue (PIS) 64,756 1,266 38,116 104,138 102,598 Social security (INSS – SAT) 527 2,675 6,679 9,881 13,852 Social contribution 10,414 1,362 13,875 25,651 30,985 Tax on banking transactions (CPMF) 19,196 2,156 26,959 48,311 39,717 Other 44,916 5,238 68,828 118,982 119,785 Total 358,952 23,660 412,476 795,088 990,230 The payment schedule is as follows: 2016 78,432 2017 90,010 2018 90,010 2019 90,010 2020 90,010 2021 to 2023 270,030 2024 to 2025 86,586 Total 795,088 The tax refinancing plans under Law 11941/2009 and Law 12865/2013 are divided into 180 monthly installments. Companies are required to ensure the timely payment of all the installments and will be excluded from the program if they have three installments outstanding, whether consecutive or otherwise, or fail to pay one installment, if all the others have been paid. The Company’s and its subsidiaries’ debts included in said tax refinancing programs are divided into several types of debts, determined by the nature (social security or otherwise) and agency responsible for the management of the related debt (either the Brazilian Federal Revenue Service, or RFB, or the National Treasury Attorney General’s Office, or PGFN). To date, the Company is aware of the consolidation of some of these types of tax refinancing programs, while other are still being consolidated by the RFB or the PGFN and are, therefore, subject to confirmation of the amounts payable in installments and outstanding balances. Regarding the installment plans already verified by the tax authorities, the Company was notified of the acceptance of revision request filed by one of the Company’s subsidiaries to exclude debts previously settled, resulting in a significant reduction of the outstanding balances related to one of the types of tax refinancing programs. Thus, the Company made some accounting adjustments to adjust the corresponding balances of the line items where such obligations were recognized to the amount verified by the RFB at the end of the consolidation revision procedure, resulting in the reversal of liabilities previously amounting to R$168,541. The Company and some of its subsidiaries’ joined the new tax installment program governed by Article 2 of Law 12996/2014, under which they can include federal tax debts past due through December 31, 2013. In its application to the new program, the Company elected to pay its debt in 30 monthly installments. In November 2014 the balances of the tax installment plans entered into by the Company and its subsidiaries under Article 2 of Law 12996/2014 were fully settled as provided for by Article 33 of Law 13043/2014, i.e., the companies offset their own tax loss carryforwards against 70% of their tax debts R$256,118 in Company and R$302,014 on a consolidated basis, and settled the remaining 30% of R$109,765 in Company and R$129,435 on a consolidated basis in cash. The Company and its subsidiaries complied with all the requirements set out in said Law and the administrative order that regulated its enforcement and the related deadlines, including the payment of amounts that had to be paid in cash, while the utilization of tax loss carryforwards is still subject to analysis and confirmation by the Federal Revenue Service. |
CONTINGENCIES
CONTINGENCIES | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES | 20. CONTINGENCIES Broken down as follows: Type 2015 2014 Labor (i) Overtime 329,510 471,506 (ii) Sundry premiums 110,664 131,963 (iii) Indemnities 99,607 152,113 (iv) Stability/reintegration 97,783 126,070 (v) Additional post-retirement benefits 70,942 83,417 (vi) Salary differences and related effects 38,013 52,852 (vii) Lawyer/expert fees 25,291 29,382 (viii) Severance pay 15,016 20,235 (ix) Labor fines 10,275 15,562 (x) Employment relationship 6,967 5,717 (xi) Severance Pay Fund (FGTS) 6,694 9,359 (xii) Joint liability 610 1,581 (xiii) Other claims 38,105 55,267 Total 849,477 1,155,024 Tax (i) State VAT (ICMS) 308,144 363,025 (ii) Tax on services (ISS) 71,201 71,666 (iii) INSS (joint liability, fees, and severance pay) 29,394 31,735 (iv) Tax on net income (ILL) 6,882 20,691 (v) Other claims 76,736 45,504 Total 492,357 532,621 Civil (i) Corporate 1,111,742 1,549,525 (ii) ANATEL 1,148,621 1,104,163 (iii) Small claims courts 361,474 282,209 (iv) Other claims 471,295 508,226 Total 3,093,132 3,444,123 Total provisions 4,434,966 5,131,768 Current 1,020,994 1,058,521 Non-current 3,413,972 4,073,247 In compliance with the relevant Law, the provisions are adjusted for inflation on a monthly basis. Breakdown of contingent liabilities, by nature The breakdown of contingent liabilities with a possible unfavorable outcome and, therefore, not recognized in accounting, is as follows: 2015 2014 Labor 779,776 1,082,677 Tax 24,047,529 21,059,009 Civil 1,238,279 1,146,745 Total 26,065,584 23,288,431 Summary of movements in provision balances Labor Tax Civil Total Balance at Jan 1, 2014 1,142,274 640,372 3,833,671 5,616,317 Acquisition of investments - PT Portugal 7,471 86,198 48,040 141,709 Inflation adjustment 147,825 (29,680 ) 115,131 233,276 Additions/(reversals) 116,230 13,895 340,472 470,597 Write-offs for payment/terminations (250,830 ) (82,593 ) (848,190 ) (1,181,613 ) Foreign exchange differences 5 69 36 110 Liabilities on held-for-sale assets (7,951 ) (95,640 ) (45,037 ) (148,628 ) Balance in 2014 1,155,024 532,621 3,444,123 5,131,768 Merger of TmarPart and subsidiaries 6,987 6,130 785 13,902 Inflation adjustment (15,016 ) 33,053 158,260 176,297 Additions/(reversals) (113,636 ) 44,325 635,928 566,617 Write-offs for payment/terminations (183,882 ) (123,772 ) (1,145,964 ) (1,453,618 ) Balance in 2015 849,477 492,357 3,093,132 4,434,966 Pursuant to our legal counsel’s assessments and based on more complete historic information, we revised the likelihood of unfavorable outcome of a set of labor lawsuits to which the Company is jointly and severally liable to remote, resulting in a decrease in the previously recognized amount. We revised the methodology used to calculate the provisions for losses in civil lawsuits—corporate lawsuits involving the financial participation agreements, including statistical techniques, as a result of the higher experience accumulated in the matter. The change in estimates generated a R$325,709 reversal in the provisions for civil contingencies—corporate, recognized in other operating income (expenses), net. Summary of the main matters related to the recognized provisions and contingent liabilities Contingencies Labor (i) Overtime - refers to the claim for payment of salary and premiums for alleged overtime hours; (ii) Sundry premiums - refer to claims of hazardous duty premium, based on Law 7369/85, regulated by Decree 93412/86, due to the alleged risk from employees’ contact with the electric power grid, health hazard premium, pager pay, and transfer premium; (iii) Indemnities - refers to amounts allegedly due for occupational accidents, leased vehicles, occupational diseases, pain and suffering, and tenure; (iv) Stability/reintegration - claim due to alleged noncompliance with an employee’s special condition which prohibited termination of the employment contract without cause; (v) Supplementary retirement benefits - differences allegedly due on the benefit salary referring to payroll amounts; (vi) Salary differences and related effects - refer mainly to claims for salary increases due to alleged noncompliance with trade union agreements. As for the effects, these refer to the impact of the salary increase allegedly due on the other amounts calculated based on the employee’s salary; (vii) Lawyers/expert fees - installments payable to the plaintiffs’ lawyers and court appointed experts, when necessary for the case investigation, to obtain expert evidence; (viii) Severance pay - claims of amounts which were allegedly unpaid or underpaid upon severance; (ix) Labor fines - amounts arising from delays or nonpayment of certain amounts provided for by the employment contract, within the deadlines set out in prevailing legislation and collective bargaining agreements; (x) Employment relationship - lawsuits filed by outsourced companies’ former employees claiming the recognition of an employment relationship with the Company or its subsidiaries by alleging an illegal outsourcing and/or the existence of elements that evidence such relationship, such as direct subordination; (xi) Supplement to FGTS fine - arising from understated inflation, refers to claims to increase the FGTS severance fine as a result of the adjustment of accounts of this fund due to inflation effects. The Company filed a lawsuit against Caixa Econômica Federal to assure the reimbursement of all amounts paid for this purpose; (xii) Joint liability - refers to the claim to assign liability to the Company, filed by outsourced personnel, due to alleged noncompliance with the latter’s labor rights by their direct employers; (xiii) Other claims - refer to different litigation including rehiring, profit sharing, qualification of certain allowances as compensation, etc. Tax (i) ICMS - Refers to the provision considered sufficient by management to cover the various tax assessments related to: (a) levy of ICMS and not ISS on certain revenue; (b) claim and offset of credits on the purchase of goods and other inputs, including those necessary for network maintenance; and (c) tax assessments related to alleged noncompliance with accessory obligations. (ii) ISS - the Company and TMAR have provisions for tax assessment notices challenged because of the levy of ISS on several value added, technical, and administrative services, and equipment leases. (iii) INSS - Provision related basically to probable losses on lawsuits discussing joint liability and indemnities. (iv) ILL - TMAR offset the ILL paid up to calendar 1992 based on Federal Supreme Court (“STF”) decisions that declare the unconstitutionality of this tax. However, even though there is case law on the matter, a provision is maintained, as there is no final decision of the criteria for the adjustments of these credits. (v) Other claims - Refer basically to provisions to cover Real Estate Tax (IPTU) assessments and several tax assessments related to income tax and social contribution collection. Civil (i) Corporate – Financial Participation Agreements - these agreements were governed by Administrative Rules 415/1972, 1181/1974, 1361/1976, 881/1990, 86/1991, and 1028/1996. Subscribers held a financial interest in the concessionaire after paying in a certain amount, initially recorded as capitalizable funds and subsequently recorded in the concessionaire’s equity, after a capital increase was approved by the shareholders’ meeting, thus generating the issuance of shares. The lawsuits filed against the former CRT - Companhia Riograndense de Telecomunicações, a company acquired by the Company, challenge the way shares were granted to subscribers based on said financial participation agreements. The Company used to recognize a provision for the risk of unfavorable outcome in these lawsuits based on certain legal doctrine. During 2009, however, decisions issued by appellate courts led the Company to revisit the amount accrued and the risk classification of the relevant lawsuits. The Company, considering obviously the peculiarities of each decision and based on the assessment made by its legal department and outside legal counsel, changed its estimate on the likelihood of an unfavorable outcome from possible to probable. In 2009, the Company’s management, based on the opinions of its legal department and outside legal counsel, revised the measurement criteria of the provision related to the financial interest agreements. Said revision contemplated additional considerations regarding the dates and the arguments of the final and unappealable decisions on ongoing lawsuits, as well as the use of statistical criteria to estimate the amount of the provision for those lawsuits. The Company currently accrues these amounts mainly taking into consideration (i) the criteria above, (ii) the number of ongoing lawsuits by matter discussed, and (iii) the average amount of historical losses, broken down by matter in dispute. In addition to these criteria, in 2013 the courts recognized, in several decisions, the enforcement of the twenty-year statute of limitations for the lawsuits that met this criterion and the Company, based on the opinion of its in-house and outside legal counsel, understands that the likelihood of loss is remote. Therefore, it is not necessary to set up a provision. At the end of 2010, the website of the Superior Court of Justice (STJ) disclosed news that this court had set compensation criteria to be adopted by the Company to the benefit of the shareholders of the former CRT for those cases new shares, possibly due, could not be issued because of the sentence issued. According to this court judgment news, which does not correspond to a final decision, the criteria must be based on (i) the definition of the number of shares that each claimant would be entitled, measuring the capital invested at the book value of the share reported in the company’s monthly trial balance on the date it was paid-in, (ii) after said number of shares is determined, it must be multiplied by its quotation on the stock exchange at the closing of the trading day the final and unappealable decision is issued, when the claimant becomes entitled to sell or disposed of the shares, and (iii) the result obtain must be adjusted for inflation (IPC/INPC) from the trading day of the date of the final and unappealable decision, plus legal interest since notification. In the case of succession, the benchmark amount will be the stock market price of the successor company. Based on current information, management believes that its estimate would not be materially impacted as at December 31, 2015, had these criteria already been adopted. There may be, however, significant changes in the items above, mainly regarding the market price of Company shares. (ii) ANATEL - refers basically to alleged noncompliance with General Universal Service Targets Plan (“PGMU”), General Quality Targets Plan (“PGMQ”), and the Quality Indicators Regulation (“RIQ”) obligations; In December 2013, ANATEL approved Resolution 629/2013, which approves the Regulation for the execution and monitoring of the Policy Adjustment Agreements (TAC). The TAC that allow telecommunications operators to request, in the context of proceedings for which no final and unappealable decision has been issued at the administrative level by ANATEL, that such fines be settled through investments in infrastructure, with additional incentives for projects in underdeveloped areas or through direct benefits to consumers, as well as the revision of the policies that resulted in said fines. In April 2015, Oi filed a proposal containing (a) corrective actions for approximately 500 policies that covers almost all the main reasons for the regulatory penalties imposed by ANATEL and (b) an “additional commitment” to offset Oi’s contingencies falling within the scope of the TAC. Since then, ANATEL is assessing and discussing the content of this proposal with Oi, in compliance with the formalities provided for under the TAC, to meet the premises that drove the approval of this Regulation. Currently, the TAC negotiation process is at its final stage and we expect to sign the agreements on Universal Service and Quality targets in the coming months. Up to December 31, 2015, the proceedings being judged by ANATEL and discussed in the context of the TAC totaled approximately R$5 billion, consisting of fines at several procedural stages—approximately R$3 billion in fines imposed and R$2 billion in estimated fines. If Oi fails to comply with its commitments set forth in the TAC or discharge the obligations established by ANATEL regulations, it will be subject to penalties, such as: warnings, fines, and, in a worst case scenario, ANATEL’s intervention, temporary suspensions of services, or cancellation of its concessions and licenses. If the TAC does not provide for a specific policy, the related administrative proceeding returns to the ordinary review proceeding, where Oi will discuss with ANATEL its nature and amounts involved, as well as the implementation of corrective measures, if necessary. In 2015, ANATEL revised the penalization methodologies concerning the main types of infractions, notably User Rights and Guarantees, Quality (targets and indicators), and Station Licensing, and initiated a Public Hearing process for the revision of the Universal Service and Barriers to Inspections methodologies. Oi and the other industry players contributed to the Public Consultations conducted by ANATEL on these matters by emphasizing the need for improvement that can contribute to penalty fairness that ensures the educational nature of penalties and the economic feasibility of the operators, thus reducing disputes in courts and favoring the expansion of industry investments. As at December 31, 2015, the Company had fines outside the jurisdiction of ANATEL that were determined under the former penalty calculation methodology and are being discussed in courts. The Company disagrees and is challenging some of the alleged noncompliance events, and is also challenging the unfairness of the amount of some imposed fines in light of the pinpointed noncompliance event. (iii) Small claims courts - claims filed by customers for which the individual indemnification compensation amounts do not exceed the equivalent of forty minimum wages; and (iv) Other claims - refer to several ongoing lawsuits relating to contract terminations, certain agencies requesting the reopening of customer service centers, compensation claimed by former suppliers and building contractors, in lawsuits filed by equipment vendors against Company subsidiaries, revision of contractual terms and conditions due to changes introduced by a plan to stabilize the economy, and litigation mainly involving discussions on the breach of contracts, to which management and its legal counsel attribute a probable likelihood of an unfavorable outcome, etc. Possible contingencies The Company and its subsidiaries are also parties to several lawsuits in which the likelihood of an unfavorable outcome is classified as possible, in the opinion of their legal counsel, and for which no provision for contingent liabilities has been recognized. The main contingencies classified with possible likelihood of an unfavorable outcome, according to the Company´s management’s opinion, based on its legal counsel’s assessment, are summarized below: Labor Refer to several lawsuits claiming, but not limited to, the payment of salary differences, overtime, hazardous duty and health hazard premium, and joint liability, which total approximately R$779,776 (R$1,082,677 in 2014). Tax The main ongoing lawsuits have the following matters: (i) ICMS - several ICMS assessment notifications, including two main matters: ICMS levied on certain revenue from services already subject to ISS or which are not part of the ICMS tax base, and utilization of ICMS credits claimed on the purchase of goods and other inputs, in the approximate amount of R$10,144,485 (R$7,554,421 in 2014); (ii) ISS - alleged levy of this tax on subsidiary telecommunications services and discussion regarding the classification of the services taxed by the cities listed in Supplementary Law 116/2003, amounting approximately to R$2,908,031 (R$2,588,849 in 2014); (iii) INSS - tax assessments to add amounts to the contribution salary allegedly due by the Company, amounting approximately to R$1,029,470 (995,994 in 2014); and (iv) Federal taxes - several tax assessment notifications regarding basically the disallowances made on the calculation of taxes, errors in the completion of tax returns, transfer of PIS and COFINS and FUST related to changes in the interpretation of these taxes tax bases by ANATEL. These lawsuits amount approximately to R$9,965,543 (R$9,919,745 in 2014). Civil The main ongoing lawsuits do not have any court decision which has been issued, and are primarily related, but not limited to, challenging of network expansion plans, compensation for pain and suffering and material damages, collection lawsuits, and bidding processes. These lawsuits total approximately R$1,238,279 (R$1,146,745 in 2014). Guarantees The Company has bank guarantee letters and guarantee insurance granted by several financial institutions and insurers to guarantee commitments arising from lawsuits, contractual obligations, and biddings with ANATEL. The total adjusted amount of contracted guarantees and guarantee insurance, effective at December 31, 2015, corresponds to R$5,394,597 (R$5,816,071 in 2014), Company, and R$15,577,522 (R$16,488,245 in 2014), on a consolidated basis. The commission charges on these contracts are based on market rates. |
OTHER PAYABLES
OTHER PAYABLES | 12 Months Ended |
Dec. 31, 2015 | |
Other Liabilities Disclosure [Abstract] | |
OTHER PAYABLES | 21. OTHER PAYABLES 2015 2014 Unearned revenues (i) 2,039,183 2,475,391 Advances from customers 767,905 635,681 Provisions for indemnities payable (Note 26) 668,534 Payable for the acquisition of equity interest 382,230 408,978 Consignation to third parties 43,160 43,062 Provision for asset decommissioning 15,437 14,835 Other 356,088 46,328 Total 4,272,537 3,624,275 Current 1,219,624 1,021,719 Non-current 3,052,913 2,602,556 (i) Primarily refers (1) amounts received in advance for the assignment of the right to the commercial operation and use of infrastructure assets that are recognized in revenues over the effective period of the underlying agreements and (2) prepaid mobile telephony services that are recognized in revenue when the customers use the services. |
EQUITY
EQUITY | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
EQUITY | 22. EQUITY (a) Share capital Subscribed and paid-in capital is R$21,438,374 (R$21,438,220 at December 31, 2014), represented by the following no-par value shares: Number of shares (in thousands) 2015 2014 Total capital in shares Common shares 668,034 286,155 Preferred shares 157,727 572,317 Total 825,761 858,472 Treasury shares Common shares 148,282 8,425 Preferred shares 1,812 7,281 Total 150,094 15,706 Outstanding shares Common shares 519,752 277,730 Preferred shares 155,915 565,036 Total outstanding shares 675,667 842,766 Preferred shares are nonvoting, but are assured priority in the payment of the noncumulative minimum dividends equal to the higher of 6% per year of the amount obtained by dividing capital stock by the total number of shares of the Company or 3% per year of the amount obtained by dividing book equity by the total number of shares of the Company. The Company is authorized to increase its capital under a Board of Directors’ resolution, in common and preferred shares, up to the share capital top limit of R$34,038,701,741.49, within the legal top limit of 2/3 for the issuance of new nonvoting preferred shares. By resolution of the Shareholders’ Meeting or Board of Directors’ Meeting, the Company’s capital can be increased by capitalizing retained earnings or reserves previously set up for this purpose by the Shareholders’ Meeting. Under these conditions, the capitalization can be made without any change in the number of shares. Capital is represented by common and preferred shares with no par value. The Company is not required to maintain the current proportion of common to preferred share on capital increases. On February 25, 2015 the Board of Directors approved a capital increase of R$154 without the issue of new shares, through the capitalization of the investment reserve. In October 2015, the voluntary conversion of Company preferred shares into common shares was completed (Note 1). (b) Treasury shares Treasury shares as at December 31, 2015 originate from the corporate events that took place in the first quarter of 2015, the second quarter of 2014, and the first half of 2012, described below: (i) On February 27, 2012, the Extraordinary Shareholders’ Meeting of Oi S.A. approved the Merger Protocol and Justification of Coari with and into the Company and, as a result, the cancelation of the all the treasury shares held by the Company on that date; (ii) On February 27, 2012, the Extraordinary Shareholders’ Meeting of Oi S.A. approved the Merger Protocol and Justification of TNL with and into the Company, and the Company’s shares then held by TNL, as a result of the merger of Coari with and into the Company, were canceled, except for 24,647,867 common shares that remained in treasury; (iii) Starting April 9, 2012, Oi paid the reimbursement of shares to withdrawing shareholders. (iv) As a result of the Company’s capital increase approved by the Board of Directors on April 30 and May 5, 2014, and due to subscription made by Pharol in PT Portugal assets, R$263,028 was reclassified to treasury shares. (v) Under the exchange agreement entered into with Pharol on September 8, 2014 (Note 27), approved at Pharol’s extraordinary shareholders’ meeting, by the Brazilian Securities and Exchange Commission - CVM, and at Oi’s extraordinary shareholders’ meeting, on March 30, 2015 the Company conducted a share exchange under which Pharol delivered to PTIF Oi shares divided into 474,348,720 OIBR3 shares and 948,697,440 OIBR4 shares (47,434,872 and 94,869,744 after the reverse stock split, respectively); in exchange, the Company delivered Rio Forte securities to PT SGPS, in the total principal amount of R$3,163 million (€897 million). The treasury shares position corresponding to items (i), (ii) and (iii) referred to above, not taking into consideration item (iv) because this refers to a reclassification derived from cross-shareholdings, is as follows: Common Amount Preferred shares Amount Balance in 2013 84,251 880,378 72,808 1,224,146 Reverse share split (75,826 ) (65,527 ) Balance in 2014 8,425 880,378 7,281 1,224,146 Share exchange 47,435 1,054,513 94,870 2,109,026 Share conversion 92,422 3,274,047 (100,339 ) (3,274,047 ) Balance in 2015 148,282 5,208,938 1,812 59,125 (*) Number of shares in thousands Historical cost in purchase of treasury shares (R$ per share) 2015 2014 Weighted average 13.40 13.40 Minimum 3.79 3.79 Maximum 15.25 15.25 (c) Capital reserves Capital reserves consist mainly of the Special Reserve on Merger that is represented by the corporate reorganizations primarily due to the corporate reorganization approved on February 27, 2012. In 2015, the increase in this reserve refers the net assets recorded related to merger of TmarPart approved on September 1, 2015 amounting to R$1,105,180 (Note 1). (d) Dividends and interest on capital Dividends are calculated pursuant to the Company’s Bylaws and the Brazilian Corporate Law and dividends preferred or priority dividends are calculated pursuant to the Company’s Bylaws. Preferred shares are nonvoting, but are assured priority in the payment of the noncumulative minimum dividends equal to the higher of 6% per year of the amount obtained by dividing capital stock by the total number of shares of the Company or 3% per year of the amount obtained by dividing book equity by the total number of shares of the Company. By decision of the Board of Directors, the Company can pay or credit, as dividends, interest on capital pursuant to Article 9, paragraph 7, of Law 9249/1995. The interest paid or credited will be offset against the annual mandatory minimum dividend amount, pursuant to Article 43 of the Bylaws. At the Company’s Annual Shareholders’ Meeting held on April 29, 2015 the allocation of loss for 2014, amounting to R$4,407,711, was approved as follows: (i) offset against the legal reserve amounting to R$383,527 and R$4,024,184 to accumulated losses. The Company reported loss for the year ended December 31, 2015 amounting to R$4,934,908. On March 23, 2016 the Board of Directors approved the Company profit allocation proposal, subject to approval by the Annual Shareholders’ Meeting, to line item accumulated losses. The mandatory minimum dividends, which are calculated pursuant to Article 202 of Law 6404/1976 (Brazilian Corporate Law), were not calculated because the Company reported losses in 2015 and 2014. (e) Share issue costs This line item includes the share issue costs net of taxes amounting to R$377,429, of which R$194,464 is taxes. These costs are related to the following corporate transactions: (1) capital increase, in accordance with the plan for the business combination between the Company and Pharol and (2) the corporate reorganization of February 27, 2012, and (3) merger of TmarPart with and into Oi. These costs directly attributable to the mentioned events are basically represented by expenses on the preparation of prospectus and reports, third-party professional services, fees and commissions, transfer costs, and registration costs. (f) Other comprehensive income We recognize in this line item other comprehensive income, which includes hedge accounting gains and losses, actuarial gains and losses, foreign exchange differences arising on translating the net investment in foreign subsidiaries, and the tax effects related to these components, which are not recognized in the statement of profit or loss. |
LIABILITIES FOR PENSION BENEFIT
LIABILITIES FOR PENSION BENEFITS | 12 Months Ended |
Dec. 31, 2015 | |
Postemployment Benefits [Abstract] | |
LIABILITIES FOR PENSION BENEFITS | 23. LIABILITIES FOR PENSION BENEFITS (a) Pension funds The Company and its subsidiaries sponsor retirement benefit plans for their employees, provided that they elect to be part of such plan. The table below shows the existing pension plans at December 31, 2015. Benefit plans Sponsors Manager TCSPREV Oi, Oi Móvel, BrT Multimídia and Oi Internet FATL BrTPREV Oi, Oi Móvel, BrT Multimídia and Oi Internet FATL TelemarPrev Oi, TMAR, Oi Móvel and Oi Internet FATL PBS-Telemar TMAR FATL PAMEC Oi Oi PBS-A TMAR and Oi Sistel PBS-TNCP Oi Móvel Sistel CELPREV Oi Móvel Sistel PAMA Oi and TMAR Sistel Sistel – Fundação Sistel de Seguridade Social FATL – Fundação Atlântico de Seguridade Social For purposes of the pension plans described in this note, the Company can also be referred to as the “Sponsor”. The sponsored plans are valued by independent actuaries at the end of the annual reporting period. The Bylaws provide for the approval of the pension plan policy, and the joint liability attributed to the defined benefit plans is governed by the agreements entered into with the pension fund entities, with the agreement of the National Pension Plan Authority (PREVIC), as regards the specific plans. PREVIC is the official agency that approves and oversees said plans. The sponsored defined benefit plans are closed to new entrants because they are close-end pension funds. Participants’ and the sponsors’ contributions are defined in the funding plan. Underfunded status The unfunded status are as follows: 2015 2014 BrTPREV plan 399,754 473,554 PAMEC plan 2,585 2,981 Financial obligations - BrTPREV plan (i) 141,681 Total 544,020 476,535 Current 144,589 129,662 Non-current 399,431 346,873 (i) Represented by the agreement of financial obligations, entered into by the Company and Fundação Atlântico intended for the payment of the mathematical provision without coverage by the plan’s assets. This obligation represents the additional commitment between the provision recognized pursuant to the actuarial assumptions and the financial obligations agreement calculated based on the laws applicable to close-end pension funds, regulated by PREVIC. Specifically in 2015, the real interest rate adopted under actuarial assumptions was significantly higher than the PREVIC interest rate which led to a significant gain in the obligation, recognized in other comprehensive income by the Company. Over funded status These assets are broken down as follows: 2015 2014 TCSPREV plan 1,061,456 932,403 TelemarPrev plan 482,938 237,308 PBS – Telemar plan 33,477 10,104 Other (47,924 ) (74,734 ) Total 1,529,947 1,105,081 Current 753 1,744 Non-current 1,529,194 1,103,337 Characteristics of the sponsored pension plans 1) FATL FATL, closed-end, multiple sponsor, multiple plan pension fund, is a nonprofit, private pension-related entity, with financial and administrative independence, headquartered in Rio de Janeiro, State of Rio de Janeiro, engaged in the management and administration of pension benefit plans for the employees of its sponsors. Plans (i) BrTPREV Variable contribution pension Benefit Plan, enrolled with the National Register of Benefit Plans (CNPB) under No. 2002.0017-74. The monthly, mandatory Basic Contribution of the BrTPREV group Participants corresponds to the product obtained, in whole numbers, by applying a percentage to the Contribution Salary (SP), according to the Participant’s age and option, as follows: (i) Age up to 25 years old - Basic Contribution cohort of 3 and 8 percent of the SP; (ii) Age 26 to 30 years old - Basic Contribution cohort of 4 to 8 percent of the SP; (iii) Age 31 to 35 years old - Basic Contribution cohort of 5 to 8 percent of the SP; (iv) Age 36 to 40 years old - Basic Contribution cohort of 6 to 8 percent of the SP; (v) Age 41 to 45 years old - Basic Contribution cohort of 7 to 8 percent of the SP; and (vi) Age 46 years old or more - Basic Contribution cohort of 8 percent of the SP. The monthly Contribution of the Fundador/Alternativo group (merged) Participants corresponds to the sum of: (i) 3 percent charged on the Contribution Salary; (ii) 2 percent charged on the Contribution Salary that exceeds half of the highest Official Pension Scheme Contribution Salary, and (iii) 6.3 percent charged on the Contribution Salary that that exceeds the highest Official Pension Scheme Contribution Salary. A BrTPREV group Participant’s Voluntary Contribution corresponds to the product obtained, in whole numbers, by applying a percentage of up 22 percent, elected by the Participant, to the Participation Salary. The Sporadic Contribution of a BrTPREV group Participant is optional and both its amount and frequency are freely chosen by the Participant, provided it is not lower than one (1) UPBrT (BrT’s pension unit). The Sponsor does not make any counterpart contribution to the Participant’s Voluntary or Sporadic Contribution. The Plan’s Charter provides for contribution parity by the Participants and the Sponsors. The plan is funded under the capitalization approach. (ii) PBS-Telemar Defined benefit pension Benefit Plan, enrolled with the CNPB under No. 2000.0015-56. The contributions from Active Participants of the PBS-Telemar Benefit Plan correspond to the sum of: (i) 0.5 to 1.5 percent of the Contribution Salary (according to the participant’s age on enrollment date); (ii) 1% of Contribution Salary that exceeds half of one Standard Unit; and (iii) 11% of the Contribution Salary that exceeds one Standard Unit. The Sponsors’ contributions are equivalent to 8% of the payroll of active participants of the plan. The plan is funded under the capitalization approach. (iii) TelemarPrev Variable contribution pension Benefit Plan, enrolled with the CNPB under No. 2000.0065-74. A participant’s regular contribution is comprised of two portions: (i) basic - equivalent to 2% of the contribution salary; and (ii) standard - equivalent to 3% of the positive difference between the total contribution salary and the social security contribution. The additional extraordinary contributions from participants are optional and can be made in multiples of 0.5% of the Contribution Salary, for a period of not less than six (6) months. Nonrecurring extraordinary contributions from a participant are also optional and cannot be lower than 5% of the Contribution Salary ceiling. The Plan’s Charter requires the parity between participants’ and sponsors’ contributions, up to the limit of 8% of the Contribution Salary, even though a sponsor is not required to match Extraordinary Contributions made by participants. The plan is funded under the capitalization approach. (iv) TCSPREV Variable contribution pension Benefit Plan, enrolled with the CNPB under No. 2000.0028-38. The monthly, mandatory Basic Contribution of the TCSPREV group Participants corresponds to the product obtained, in whole numbers, by applying a percentage, chosen by the Participant, to the Contribution Salary (SP) as follows: (i) Age up to 25 years old - basic contribution cohort of 3 and 8 percent of the SP; (ii) Age 26 to 30 years old - basic contribution cohort of 4 to 8 percent of the SP; (iii) Age 31 to 35 years old - basic contribution cohort of 5 to 8 percent of the SP; (iv) Age 36 to 40 years old - basic contribution cohort of 6 to 8 percent of the SP; (v) Age 41 to 45 years old - basic contribution cohort of 7 to 8 percent of the SP; and (vi) Age 46 years old or more - basic contribution cohort of 8 percent of the SP. The TCSPREV group Participant’s Voluntary Contribution corresponds to the product obtained, in whole numbers, by applying a percentage of up 22%, elected by the Participant, to the Participation Salary. The Sporadic Contribution of a Participant is optional and both its amount and frequency are freely chosen by the Participant, provided it is not lower than one (1) UPTCS (TCSPREV’s pension unit). The Sponsor does not make any counterpart contribution to the Participant’s Voluntary or Sporadic contribution. The Plan’s Charter provides for contribution parity by the Participants and the Sponsors. The plan is funded under the capitalization approach. 2) SISTEL Sistel is a nonprofit, private welfare and pension entity, established in November 1977, which is engaged in creating private plans to grant benefits in the form of lump sums or annuities, supplementary or similar to the government retirement pensions, to the employees and their families who are linked to Sistel’s sponsors. Plans (i) PBS-A Multiemployer pension plan jointly sponsored with other sponsors associated to the provision of telecommunications services and offered to participants who held the status of beneficiaries on January 1, 2000. Contributions to the PBS-A are contingent on the determination of an accumulated deficit and the Company is jointly and severally liable, along with other fixed-line telecommunications companies, for 100% of any insufficiency in payments owed to members of the PBS-A plan. As of December 31, 2015, the PBS-A plan had a surplus of R$2,636,281. No significant contribution in 2015, 2014 and 2013. (ii) PBS-TNCP PBS-TNCP plan is funded under the capitalization approach. PBS-TNCP plan has been closed to new members since April 2004. Contributions to the PBS-TNCP plan are contingent on the determination of an accumulated deficit. As of December 31, 2015, the PBS-TNCP plan had a surplus of R$25,351. No significant contribution in 2015, 2014 and 2013. (iii) CELPREV In 2004, Amazônia (merged with and into TNL PCS) obtained from PREVIC the approval to create a new Pension Plan. The variable contribution plan, called CelPrev Amazônia (“CELPREV”), was offered to the employees who did not participate of the PBS-TNCP plan, and to new employees hired by its subsidiary. The participants of the PBS-TNCP plan were offered the possibility and encouraged to migrate to the CELPREV plan. Approximately 27.3% of Amazônia’s active employees that were participants in the PBS-TNCP plan migrated to the CELPREV plan. As of December 31, 2015, the CELPREV plan had a surplus of R$2,412. No significant contribution in 2015, 2014 and 2013. (v) PAMA PAMA is a multiemployer healthcare plan for retired employees aimed at providing medical care to beneficiaries, with copayments by and contributions from the latter. The PAMA plan has been closed to new members since February 2000, other than new beneficiaries of current members and employees that are covered by the PBS-A plan who have not yet elected to join the PAMA plan. In December 2003, the Company began sponsoring the PCE –Special Coverage Plan, or the PCE plan, a health-care plan managed by Sistel. The PCE plan is open to employees that are covered by the PAMA plan. From February to July 2004, December 2005 to April 2006, June to September 2008, July 2009 to February 2010, March to November 2010, February 2011 to March 2012 and March 2012 until today, the Company offered incentives to our employees to migrate from the PAMA plan to the PCE plan. In October 2015, in compliance with a court order, Sistel transferred the surpluses of the PBS-A benefits plan, amounting to R$3,042 million, to ensure the solvency of the plan PAMA. Of the total amount transferred, R$2,127 million is related to the plans sponsored by the Company, apportioned proportionally to the obligations of the defined benefit plan. As of December 31, 2015, the PAMA plan had a surplus of R$1,154,176. No significant contribution in 2015, 2014 and 2013. 3) PAMEC-BrT - Assistance plan managed by the Company Defined benefit plan intended to provide medical care to the retirees and survivor pensioners linked to the TCSPREV pension plan managed by FATL. The contributions for PAMEC-BrT were fully paid in July 1998, through a bullet payment. However, as this plan is now administrated by the Company, after the transfer of management by Fundação 14 in November 2007, there are no assets recognized to cover current expenses, and the actuarial obligation is fully recognized in the Company’s liabilities. Funded Status Changes in the actuarial obligations, fair value of assets and amounts recognized in the balance sheet 2015 2014 TCSPREV BrTPREV TelemarPrev PBS- Telemar PAMEC TCSPREV BrTPREV TelemarPrev PBS- Telemar PAMEC Projected benefit obligation at the beginning of the year 502,433 2,023,849 2,885,744 247,833 2,981 481,055 1,941,701 2,722,980 235,884 3,418 Service cost 586 142 2,785 80 797 230 3,592 121 Interest cost 57,066 228,738 328,289 28,089 345 54,689 219,630 310,467 26,755 396 Benefits paid (44,535 ) (177,696 ) (219,465 ) (19,942 ) (122 ) (36,569 ) (167,661 ) (216,394 ) (18,507 ) (110 ) Participant’s contributions 43 52 Changes in actuarial assumptions (18,420 ) (74,280 ) (204,806 ) (11,956 ) (619 ) 2,461 29,949 65,099 3,528 (723 ) Projected benefit obligation at the end of the year 497,130 2,000,753 2,792,547 244,147 2,585 502,433 2,023,849 2,885,744 247,833 2,981 2015 2014 TCSPREV BrTPREV TelemarPrev PBS- Telemar PAMEC TCSPREV BrTPREV TelemarPrev PBS- Telemar PAMEC Fair value of plan assets at the beginning of the year 1,434,836 1,550,295 3,123,052 257,937 1,442,657 1,301,556 3,204,535 264,224 Actual return on plan assets 168,285 88,465 371,898 39,516 28,748 293,096 134,911 12,091 Company’s contributions 139,935 71 123,304 77 Participant’s contributions 42 52 Benefits paid (44,535 ) (177,696 ) (219,465 ) (19,942 ) (36,569 ) (167,661 ) (216,394 ) (18,507 ) Fair value of plan assets at the end of the year 1,558,586 1,600,999 3,275,485 277,624 1,434,836 1,550,295 3,123,052 257,937 2015 2014 TCSPREV BrTPREV TelemarPrev PBS-Telemar PAMEC TCSPREV BrTPREV TelemarPrev PBS- Telemar PAMEC Funded (unfunded) status of plan (1,061,456 ) 399,754 (482,938 ) (33,477 ) 2,585 (932,403 ) 473,554 (237,308 ) (10,104 ) 2,981 Net periodic defined benefit pension cost for the years ended December 31, 2015, 2014 and 2013 includes the following: 2015 TCSPREV BrTPREV TelemarPrev PBS-Telemar PAMEC Net service cost 586 142 2,785 80 Interest cost 57,066 228,738 328,289 28,089 345 Expected return on plan assets (162,701 ) (180,363 ) (356,313 ) (29,293 ) Amortization of net actuarial losses (gains) 47,438 Amortization of prior year service costs (gains) (5,636 ) 1,552 Amortization of initial transition obligation (4,203 ) Net periodic pension cost (benefit) (110,684 ) 50,069 17,996 (1,124 ) 345 2014 TCSPREV BrTPREV TelemarPrev PBS-Telemar PAMEC Net service cost 797 230 3,592 121 Interest cost 54,689 219,630 310,467 26,755 396 Expected return on plan assets (150,078 ) (151,143 ) (367,435 ) (30,117 ) Amortization of net actuarial losses (gains) (5,831 ) 6,940 9,131 Amortization of prior year service costs (gains) (5,636 ) 1,552 Amortization of initial transition obligation (4,202 ) Net periodic pension cost (benefit) (106,059 ) 77,209 (48,447 ) (3,241 ) 396 2013 TCSPREV BrTPREV TelemarPrev PBS-Telemar PAMEC Net service cost 1,837 782 12,206 235 Interest cost 49,310 194,520 282,508 23,839 427 Expected return on plan assets (145,230 ) (130,340 ) (305,649 ) (27,942 ) Amortization of net actuarial losses (gains) (19,443 ) 23,698 30,174 Amortization of prior year service costs (gains) (5,636 ) 1,552 Amortization of initial transition obligation (4,203 ) Net periodic pension cost (benefit) (119,162 ) 90,212 15,036 (3,868 ) 427 The net periodic pension cost expected to be recognized in 2016 are as follows: 2016 TCSPREV BrTPREV TelemarPrev PBS-Telemar PAMEC Net service cost 551 154 2,042 78 Interest cost 62,214 249,319 350,701 30,475 330 Expected return on plan assets (193,747 ) (191,438 ) (381,993 ) (32,876 ) Amortization of net actuarial losses (gains) 4,380 Amortization of prior year service costs (gains) (5,636 ) 1,552 Amortization of initial transition obligation Net periodic pension cost (benefit) (136,618 ) 59,587 (24,870 ) (2,323 ) 330 The sponsors’ contributions to the pension plans managed by FATL and SISTEL estimated for 2016 amount R$144,598 and R$30, respectively. The following actuarial assumptions were used to determine the actuarial present value of the Company’s projected benefit obligation: 2015 BrTPREV TelemarPrev and and TCSPREV PAMEC PBS-Telemar Discount rate for determining projected benefit obligations 13.10 % 13.10 % 13.10 % Expected long-term rate of return on plan assets 13.10 % 13.10 % 13.10 % Annual salary increases 6.45 % 7.08 % 5.50 % Rate of compensation increase 5.50 % 5.50 % 5.50 % Inflation rate assumption used in the above 5.50 % 5.50 % 5.50 % 2014 BrTPREV TelemarPrev and and TCSPREV PAMEC PBS-Telemar Discount rate for determining projected benefit obligations 11.83 % 11.83 % 11.83 % Expected long-term rate of return on plan assets 11.83 % 11.83 % 11.83 % Annual salary increases 7.93 % 7.93 % 7.93 % Rate of compensation increase 5.50 % 5.50 % 5.50 % Inflation rate assumption used in the above 5.50 % 5.50 % 5.50 % 2013 BrTPREV TelemarPrev and and TCSPREV PAMEC PBS-Telemar Discount rate for determining projected benefit obligations 11.83 % 11.83 % 11.83 % Expected long-term rate of return on plan assets 11.83 % 11.83 % 11.83 % Annual salary increases 7.93 % 7.93 % 7.93 % Rate of compensation increase 5.50 % 5.50 % 5.50 % Inflation rate assumption used in the above 5.50 % 5.50 % 5.50 % Investment policy of the plans The investment policies and strategies for the two single-employer benefit pension plans PBS-Telemar and TelemarPrev are subject to Resolution N° 3,121 of the National Monetary Council, which establishes investment guidelines. TelemarPrev is a defined contribution plan with individual capitalization. Management allocates the investments in order to conciliate the expectations of the sponsors, active and assisted participants. The assets on December 31, 2015 consists mainly of the following portfolio: 91% in debt securities, 5% in equity of Brazilian companies and 4% in real estate and other assets. PBS-Telemar plan is closed for new participants and the vast majority of the current participants are receiving their benefits. The mathematical reserves are readjusted annually considering an interest rate of 6% per annum over the variation of the National Consumer Price Index (“INPC”). Therefore, management’s strategy is to guarantee resources that exceed this readjustment. Management also prepares a long-term cash-flow to match assets and liabilities. Therefore, debt securities investments are preferred when choosing the allocation of its assets, representing 88% of the portfolio in December 31, 2015. The investment policies and strategies for BrTPREV, TCSPREV and PAMEC, which is approved annually by the pension fund’s board states that the investment decisions should consider: (i) capital preservation; (ii) diversification; (iii) risk tolerance; (iv) expected returns versus benefit plan’s interest rates; (v) compatibility between investments liquidity and pensions’ cash flows and (vi) reasonable costs. It also defines volume ranges for the different types of investment allowed for pension funds, which are: domestic fixed income, domestic equity, loans to pension fund’s members and real estate. In the fixed income portfolio, only low credit risk securities are allowed. Derivative instruments are only permitted for hedging purposes. Loans are restricted to certain credit limits. Tactical allocation is decided by the investment committee, consisted of the pension fund’s officers, investment manager and one member designated by the Board. Execution is performed by the Finance Department. The average ceilings set for the different types of investment permitted for pension funds are as follows: ASSET SEGMENT TCSPREV BrTPREV PBS- Telemar TelemarPrev Fixed income 100.00 % 100.00 % 100.00 % 100.00 % Variable income 17.00 % 17.00 % 10.00 % 17.00 % Structured investments 20.00 % 20.00 % 20.00 % 20.00 % Investments abroad 5.00 % 5.00 % 2.00 % 5.00 % Real estate 8.00 % 8.00 % 8.00 % 8.00 % Loans to participants 15.00 % 15.00 % 15.00 % 15.00 % The allocation of plan assets as at December 31, 2015 is as follows: ASSET SEGMENT TCSPREV BrTPREV PBS- Telemar TelemarPrev Fixed income 84.25 % 92.17 % 88.01 % 91.40 % Variable income 3.25 % 1.32 % 1.78 % 2.21 % Equity securities 11.45 % 5.21 % 9.12 % 5.08 % Real estate 0.72 % 0.69 % 0.74 % 0.70 % Loans to participants 0.33 % 0.62 % 0.35 % 0.61 % Total 100.00 % 100.00 % 100.00 % 100.00 % Expected contribution and benefits The estimated benefit payments, which reflect future services, as appropriate, are expected to be paid as follows (unaudited): TCSPREV BrTPREV PBS-Telemar TelemarPrev 2016 44,429 195,106 23,028 230,887 2017 46,725 203,295 24,131 244,260 2018 49,143 211,461 25,367 258,614 2019 51,562 219,708 26,650 272,844 2020 54,040 228,076 27,866 287,623 2021 until 2025 308,753 1,261,909 157,295 1,684,353 (b) Employee profit sharing In the year ended December 31, 2015, the Company and its subsidiaries recognized provisions for employee profit sharing based on individual and corporate goal attainment estimates totaling R$70,199 in Company and R$210,054 on a consolidated basis. (c) Share-based compensation The Long-term Incentive Program (2015-2017), approved by the Company’s Board of Directors on March 13, 2015, seeks a greater alignment with the Company’s management cycle and business priorities. The Program consists of the payment of gross cash reward, in accordance with the Law Laws and Regulations, as a result of the compliance with the goals set for 2015-2017. The gross cash reward is benchmarked to the quotation of Company shares. We also disclose that the beneficiaries are not entitled to receiving Company shares since the Program does not provide for the transfer of shares to its beneficiaries. This share-based compensation program has been recorded as a liability in the consolidated financial statements. No relevant provisions were recorded in 2015 considering the Company performance. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | 24. SEGMENT INFORMATION The Company uses operating segment information for decision-making. The Company identified only one operating segment that corresponds to the telecommunications business in Brazil. In addition to the telecommunications business in Brazil, the Company conducts other businesses that individually or in aggregate do not meet any of the quantitative indicators that would require their disclosure as reportable business segments. These businesses refer basically to the following companies: Mobile Telecommunications Limited in Namibia, Companhia Santomense de Telecomunicações, Listas Telefónicas de Moçambique, ELTA – Empresa de Listas Telefónicas de Angola, and Timor Telecom, which provide fixed and mobile telecommunications services and publish telephone directories, and which have been consolidated since May 2014. The revenue generation is assessed by the Company based on a view segmented by customer, into the following categories: • Residential Services, focused on the sale of fixed telephony services, including voice services, data communication services (broadband), and pay TV; • Personal Mobility, focused on the sale of mobile telephony services to subscription and prepaid customers, and mobile broadband customers; and • SMEs/Corporate, which includes corporate solutions offered to our small, medium-sized, and large corporate customers. Telecommunications in Brazil In preparing the financial statements for this reportable segment, the transactions between the companies included in the segment have been eliminated. The financial information of this reportable segment for the years ended December 31, 2015, 2014 and 2013 is as follows: 2015 2014 2013 Residential 9,779,218 9,995,205 10,302,910 Personal mobility 8,430,890 9,011,200 9,289,893 SMEs/Corporate 7,973,893 8,311,458 8,454,923 Other services and businesses 257,090 295,297 374,421 Net operating revenue 26,441,091 27,613,160 28,422,147 Operating expenses Depreciation and amortization (5,996,157 ) (5,630,238 ) (5,691,824 ) Interconnection (1,757,277 ) (2,674,915 ) (3,965,623 ) Personnel (2,618,139 ) (2,749,404 ) (2,534,222 ) Third-party services (6,154,900 ) (6,163,447 ) (6,119,733 ) Network maintenance services (1,860,646 ) (1,906,789 ) (2,328,140 ) Handset and other costs (226,826 ) (702,379 ) (515,377 ) Advertising and publicity (379,537 ) (656,487 ) (556,500 ) Rentals and Insurance (3,553,881 ) (3,095,667 ) (2,119,684 ) Provisions/reversals (860,166 ) (779,314 ) (656,849 ) Allowance for doubtful accounts (692,935 ) (628,605 ) (922,779 ) Impairment losses (501,465 ) Taxes and other expenses (902,507 ) (1,440,968 ) (1,397,982 ) Other operating income, net 277,954 3,206,943 2,369,555 OPERATING INCOME BEFORE FINANCIAL INCOME (EXPENSES) AND TAXES 1,214,609 4,391,890 3,982,989 FINANCIAL INCOME (EXPENSES) Financial income 4,493,042 1,332,723 1,375,217 Financial expenses (11,013,939 ) (5,870,193 ) (4,677,173 ) PRETAX INCOME (5,306,288 ) (145,580 ) 681,033 Income tax and social contribution (3,202,817 ) (615,406 ) (76,610 ) LOSS FROM CONTINUING OPERATIONS (8,509,105 ) (760,986 ) 604,423 Reconciliation of revenue and income (loss) and information per geographic market In the years ended December 31, 2015, 2014 and 2013, the reconciliation of the revenue of the segment Telecommunications in Brazil and total consolidated revenue is as follows: 2015 2014 2013 Net operating revenue Revenue related to the reportable segment 26,441,091 27,613,160 28,422,147 Revenue related to other businesses (i) 912,674 633,939 Consolidated net operating revenue 27,353,765 28,247,099 28,422,147 (i) In 2014 the Africa and Timor business were consolidated after May 1. In the years ended December 31, 2015, 2014 and 2013, the reconciliation between the profit (loss) before taxes of the segment telecommunications in Brazil and the consolidated profit (loss) before taxes is as follows: 2015 2014 2013 Profit (loss) before taxes Telecommunications in Brazil (5,306,288 ) (145,580 ) 681,033 Other businesses (i) (18,682 ) 209,867 Consolidated income before taxes (5,324,970 ) 64,287 681,033 (i) In 2014 the Africa and Timor business were consolidated after May 1. Total assets, liabilities and property, plant and equipment and intangible assets per geographic market as at December 31, 2015 and 2014 are as follows: 2015 Total assets Total Property, plant and equipment assets Intangible assets Capital expenditures on property, plant and equipment and intangible assets Brazil 91,648,303 81,943,161 25,817,821 11,780,136 3,565,454 Other, primarily Africa 7,686,298 745,000 466,049 943,534 116,030 2014 Total assets Total liabilities Property, plant and equipment assets Intangible assets Capital expenditures on property, plant and equipment and intangible assets Brazil 103,098,596 82,736,984 26,244,309 13,553,821 5,259,714 Other, primarily Africa 7,642,738 851,273 506,347 997,015 110,637 No single customer accounts for more than 10% of consolidated revenue. |
RELATED-PARTY TRANSACTIONS
RELATED-PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
RELATED-PARTY TRANSACTIONS | 25. RELATED-PARTY TRANSACTIONS Transactions with joint venture, associates, and unconsolidated entities 2015 2014 Accounts receivable and other assets 4,916 191,159 PT-ACS 15,114 Fundação PT 7,387 Sportinvest Multimédia 105,492 Siresp 40 Fibroglobal 48,134 Yunit 7,454 Contax 3,307 Other entities 4,916 4,231 2015 2014 Accounts payable and other liabilities 53,246 68,259 PT-ACS 599 Fundação PT 2 Sportinvest Multimédia 291 Siresp 6 Fibroglobal 9,564 Yunit 669 Contax 41,832 TODO 5,587 Ability 7 Veotex 345 Hispamar 52,425 9,357 Other entities 821 2015 2014 Revenue Revenue from services rendered 67 31,873 Contax 30,754 TODO 1,026 Other entities 67 93 2015 2014 Costs/expenses Operating costs and expenses (240,511 ) (232,176 ) PT-ACS (3,887 ) Sportinvest Multimédia (669 ) Fibroglobal (10,974 ) Veotex (10,221 ) TODO (22,984 ) Hispamar (207,366 ) (152,041 ) Other entities (33,145 ) (31,400 ) The balances and transactions with joint venture, associates, and unconsolidated entities result from business transactions carried out in the normal course of operations, namely the provision of telecommunications services by the Company to these entities and the acquisition of these entities’ contents and the rent of their infrastructure. Compensation of key management personnel The compensation of the officers responsible for planning, managing and controlling the Company’s activities, i.e., directors and executive officers, totaled R$25,441 (R$25,409 at December 31, 2014) in the Company and R$25,649 (R$25,565 December 31, 2014) on a consolidated basis. |
HELD-FOR-SALE ASSETS AND DISCON
HELD-FOR-SALE ASSETS AND DISCONTINUED OPERATIONS | 12 Months Ended |
Dec. 31, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |
HELD-FOR-SALE ASSETS AND DISCONTINUED OPERATIONS | 26. HELD-FOR-SALE ASSETS AND DISCONTINUED OPERATIONS Sale of PT Portugal shares to Altice On December 9, 2014, the Company and Altice entered into a purchase and sale agreement of all PT Portugal shares to Altice, basically involving the operations conducted by PT Portugal in Portugal and in Hungary. On January 22, 2015, Pharol shareholders approved the sale by Oi of all PT Portugal shares to Altice, under the terms and conditions of the Share Purchase and Sale Agreement. Accordingly, the suspensive condition provided for in said agreement to its effectiveness was implemented. On June 2, 2015, the sale by Oi to Altice of its entire stake in PT Portugal was completed. Altice Portugal paid a total of €5,789 million for PT Portugal, of which €4,920 million were received in cash by Oi and €869 million were immediately allocated to settle PT Portugal euro-denominated debt. There is also a provision for the payment of an earn-out of €500 million related to PT Portugal’s future generation of revenue and Oi provided a set of guarantees and representations usual in this type of agreements to the buyer. Classification of the investment sales transactions as discontinued operations On May 5, 2014, the Company acquired PT Portugal and since then it also fully consolidated its profits or losses, assets and liabilities. In December 2014, with the approval of the sale of the investments in PT Portugal to Altice, the Company classified its operations in Portugal as held-for-sale assets and liabilities, and discontinued operations. With the sale of PT Portugal shares to Altice, the loss on divesture is presented as discontinued operations in a single line of the income statement, as follows: 2015 2014 Allowance for impairment loss at fair value of the PT Portugal investment and divesture-related expenses (3,836,388 ) Loss on sale of PT Portugal and divesture-related expenses (i) (625,464 ) Comprehensive income transferred to the income statement (ii) (225,934 ) Loss for the period of discontinued operations (iii) (15,741 ) (250,061 ) Profit for the period from discontinued operations (iv) (867,139 ) (4,086,449 ) (i) The loss on the sale of PT Portugal includes: (1) the derecognized investment cost that includes goodwill arising on the business combination between the Company and PT less the R$3.8 billion allowance for loss recognized in December 2014, and selling expenses totaling R$1.3 billion; and (2) the R$0.7 billion revenue related to cash proceeds received directly by the Company. The final price is subject to possible post-closing adjustments to be determined in the following months based on changes in the cash, debt, and working capital positions at the closing date. (ii) Refers to the cumulative foreign exchange differences gains totaling R$0.5 billion and actuarial losses from pensions and postretirement benefits plans totaling R$0.7 billion recognized in other comprehensive income, transferred from equity to profit or loss for the year due to divesture. (iii) Refers to PT Portugal’s loss recognized as equity in profits of subsidiaries for 2015 and 2014. (iv) The profit or loss from discontinued operations includes the effect of taxes amounting to R$327,115 (R$92,545 in 2014). Approval of preparatory actions for the sale of Africatel At the Board of Directors’ meeting held on September 16, 2014, Oi’s management was authorized to take all the necessary actions to divest Oi’s stake in Africatel, representing 75% of Africatel’s share capital, and/or dispose of its assets. Oi will lead the sale process, even though we believe that it would be in the best interests of both Africatel shareholders to maximize the value of their investments, that this sale be coordinated with Samba Luxco, a Helios Investors L.P. affiliate that holds the remaining 25% of Africatel’s share capital. Oi is committed to working with its local partners and each one of the operating companies where Africatel holds investments to ensure a coordinated transition of its interests in these companies. Notwithstanding the above, our indirect subsidiary Africatel GmbH & Co. KG (“Africatel GmbH”), direct holder of the Oi’s investment in Africatel, received on September 16, 2014 a letter from Samba Luxco, where Samba Luxco exercised an alleged right to sell the shares it holds in Africatel (put option), pursuant to Africatel’s shareholders’ agreement. According to this letter, this put option results from the indirect transfer of Africatel shares, previously indirectly held by Pharol, to the Company as the payment for the capital increase made in May 2014. In the letter, Samba Luxco purported to exercise the alleged put right and thereby require Africatel GmbH to acquire its shares in Africatel. The Company believes that there was not any action or event that, under Africatel’s shareholders’ agreement terms, would trigger the right to exercise the put option. Accordingly, without prejudice to the value the Company attributes to maintaining a relationship of mutual respect with Samba Luxco, Africatel GmbH intends to challenge the exercise of this put option by Samba Luxco in the current circumstances, which, pursuant to Africatel’s shareholders’ agreement, which was duly notified in Africatel GmbH’s reply to Samba Luxco’s letter, on September 26, 2014. On November 12, 2014, the International Court of Arbitration of the International Chamber of Commerce notified Africatel GmbH that Samba Luxco had commenced arbitral proceedings against Africatel GmbH to enforce its purported put right or, in the alternative, certain ancillary rights and claims. Africatel GmbH presented its answer to Samba Luxco’s request for arbitration on December 15, 2014. The arbitral tribunal was constituted on March 12, 2015 and held a first management conference in London on May 8, 2015. On July 22, 2015, Samba Luxco submitted its Statement of Claim, and on October 9, 2015, Pharol and Africatel GmbH submitted their Statement of Defence. On January 25, 2016, Samba Luxco submitted its Reply and, on March 14, 2016, Pharol and Africatel GmbH submitted their Rejoinder. The proceedings have been bifurcated, with the merits hearing currently scheduled to take place during November 2016. Dates for a quantum hearing (if necessary) have been reserved in March 2017. With regard to Africatel’s indirect stake in Unitel, through its subsidiary PT Ventures, it is worth noting that on October 13, 2015, PT Ventures initiate the arbitration proceeding against Unitel’s shareholders as a result of the violation by the latter of several rules of Unitel’s shareholders’ agreement and the Angolan law, including the fact that such shareholders caused Unitel not to pay the dividends paid to PT Ventures and retain the information and clarifications on such payment. Additionally, on October 20, 2015, PT Ventures filed an action for a declaration of sentence against Unitel with an Angolan court, claiming the recognition of PT Ventures’ right to receive the outstanding dividends declared in 2010, and the dividends for the years 2011, 2012, and 2013. The other shareholders of Unitel have asserted to PT Ventures that they believe that Pharol’s sale of a non-controlling non-controlling The assets and liabilities of the African operations are stated at the lower of their carrying amounts and their fair values less costs to sell. The African operations are consolidated in the income statement since May 5, 2014. The main components of the assets for held sale and liabilities associated to assets held for sale of the African operations are as follows: Operations in Africa 2015 Held-for-sale assets 7,686,298 Cash, cash equivalents and short-term investments 214,413 Accounts receivable 217,992 Dividends receivable (i) 2,042,191 Available-for-sale financial asset (ii) 3,541,314 Other assets 230,318 Investments 61,425 Property, plant and equipment 466,049 Intangible assets 356,900 Goodwill (iii) 555,696 Liabilities directly associated to assets held for sale 745,000 Borrowings and financing 9,557 Trade payables 85,730 Provisions for pension plans 923 Other liabilities 648,790 Non-controlling interests (*) 1,190,547 Total assets held for sale and liabilities associated to assets held for sale 5,750,751 (*) Represented mainly by the Samba Luxco’s 25% stake in Africatel Holdings, BV and, consequently, in its net assets. PT Portugal operations African operations Total 2014 Held-for-sale assets 26,611,944 7,642,738 34,254,682 Cash, cash equivalents and short-term investments 590,111 170,056 760,167 Accounts receivable 2,270,140 195,690 2,465,830 Dividends receivable (i) 1,948 1,261,826 1,263,774 Available-for-sale financial asset (ii) 4,284,416 4,284,416 Other assets 1,085,751 164,121 1,249,872 Investments 134,272 63,267 197,539 Property, plant and equipment 10,560,140 506,347 11,066,487 Intangible assets 5,271,808 376,441 5,648,249 Goodwill 6,697,774 620,574 7,318,348 Liabilities directly associated to assets held for sale 26,326,949 851,273 27,178,222 Borrowings and financing 18,892,793 83,843 18,976,636 Trade payables 2,260,503 97,600 2,358,103 Provisions for pension plans 3,347,667 997 3,348,664 Other liabilities 1,825,986 668,833 2,494,819 Non-controlling interests 1,509,197 1,509,197 Total assets held for sale and liabilities associated to assets held for sale 284,995 5,282,268 5,567,263 (i) Refers to dividends receivable from Unitel. In 2015, the Company’s recognized dividends not yet received based on the expected recoverable amount and took into account, for this valuation, the existence of lawsuits filed to collect these amounts, the expected favorable decisions on these lawsuits, and the existence of cash at Unitel for the payment of these dividends. The dividends not paid by Unitel to PT Ventures refer to fiscal years 2010, 2011, 2012, and 2013, totaling US$661million; (ii) Refers mainly to the fair value of the indirect interest financial investment of 18.75% of Unitel’s share capital, classified as held for sale. The fair value of this investment at the date of acquisition was estimated based on the valuation made by Banco Santander (Brasil), which used a series of estimates and assumptions, including cash flows forecasts for a four-year period, the choice of a growth rate to extrapolate the cash flows projections, and definition of appropriate discount rates. The Company has the policy of monitoring and periodically updating the main assumptions and material estimates used in the fair value measurement, and also takes into consideration in this assessment possible impacts of actual events related to the investment, notably the lawsuits filed against Unitel and its shareholders in 2015. As at December 31, 2015 and in the context of the updating of assumptions referred to above, the Company determined a fair value of the investment in Unitel of R$3,436 million and recognized in profit or loss a loss of R$408 million. The Company believes that the fair value measured under the Discounted Cash Flows method and using the discount rate assumptions (from 15.5% to 17.5%), foreign exchange rates, and other Angolan official financial indicators, corresponds to the best estimate of the realizable value of the investment in Unitel. (iii) As at December 31, 2015, the Company conducted the annual impairment test of its assets related to the operations in África and recognized a loss on goodwill amounting to R$89,176. |
OTHER INFORMATION
OTHER INFORMATION | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
OTHER INFORMATION | 27. OTHER INFORMATION (a) Rio Forte securities On June 30, 2014, the Company was informed, through a notice disclosed by Pharol, of the investment made by PT International Finance BV (“PTIF”) and PT Portugal, companies contributed by Pharol to Oi in the capital increase, in a commercial paper of Rio Forte Investments S.A. (“Securities” and “Rio Forte”, respectively), a company part of the Portuguese group Espírito Santo (“GES”), when both PTIF and PT Portugal were Pharol subsidiaries. According to said notice, the Securities had been issued in the total amount of €897 million, and bore average annual interest of 3.6% and matured on July 15 and July 17, 2014 (€847 and €50 million, respectively), stressing that since April 28, 2014 no other investment and/or renewal of this type of investments had been made. Both PT Portugal and PTIF (collectively “Oi Subsidiaries”) became Company subsidiaries due to the assignment of all PT Portugal shares to the Company by Pharol, on May 5, 2014, to pay in the Company’s capital increase approved on April 28 and 30, 2014. The Securities matures in July 2014 and subsequently the cure period for payment of the securities ended without Rio Forte paying the amount due. The Luxembourg Commercial Court denied Rio Forte’s request for controlled management on October 17, 2014 and Rio Forte’s bankruptcy was declared on December 8, 2014. Agreements entered into by the Company, TmarPart, and Pharol related to the investments made in Rio Forte commercial papers On September 8, 2014, after obtaining the due corporate approvals, the Company, the Oi Subsidiaries, TmarPart, and Pharol entered into definitive agreements related to the investments made in the Securities. The agreements provided for (i) an exchange (the “Exchange”) through which Oi Subsidiaries transferred the Securities to Pharol in exchange for preferred shares and common shares of the Company held by Pharol, as well as (ii) the assignment by Oi Subsidiaries of a call option on the Company shares to the benefit of Pharol (“Call Option”). On March 26, 2015, in order to comply with the conditions presented by the CVM’s Board to grant the waivers necessary for the implementation of the Share Exchange and Call Option, according to the decision issued on March 4, 2015, the Company held a Shareholders’ Meeting which approved the terms and conditions of the Share Exchange and Call Option agreements. On March 31, 2015, the Company announced, the consummation of the Exchange, under which Pharol delivered to the Oi Subsidiaries Oi unencumbered shares corresponding to 47,434,872 OIBR3 (common shares) and 94,869,744 OIBR4 (preferred shares) (“Exchanged Shares”); and in exchange Oi, through PTIF, delivered the Securities to Pharol, totaling €897 million, with no cash involved. With implementation of the Exchange, Pharol became the holder of the Securities and the sole responsible for negotiating with Rio Forte and the decisions related to the Securities, and the Company is responsible for the supporting documentation to Pharol to take the necessary actions to collect the receivables represented by the Securities. As a result of the consummation of the Exchange, Pharol’s direct interest in Oi decreased from 104,580,393 common shares and 172,025,273 preferred shares, representing 37.66% of the voting capital (ex-treasury) and 32.82% of the total capital of Oi (ex-treasury) to 57,145,521 common shares and 77,155,529 preferred shares, representing 24.81% of the voting capital (ex-treasury) and 19.17% of the total capital of Oi (ex-treasury). Oi shares received by PTIF as a result of the Exchange will remain in treasury. Main terms of the Call Option for the Purchase of Shares (“Option Contract”) Under the Call Option Agreement entered into on September 8, 2014 by Pharol, PTIF, PT Portugal, Oi, and TmarPart, and amended on March 31, 2015, the call option on Oi shares granted Pharol became exercisable with the consummation of the Exchange, beginning March 31, 2015, at any time, during a six-year period. Under the terms of the Call Option Agreement, the Call Option will involve 47,434,872 Oi common shares and 94,869,744 Oi preferred shares (“Shares Subject to the Option”) and can be exercised, in whole or in part, at any time, pursuant to the following terms and conditions: (i) Term: six (6) years, noting that Pharol’s right to exercise the Option on the Shares Subject to the Option will be reduced by the percentages below: Date of Reduction % of Shares Subject to the Option that cease to the As from 03/31/2016 10 % As from 03/31/2017 18 % As from 03/31/2018 18 % As from 03/31/2019 18 % As from 03/31/2020 18 % As from 03/31/2021 18 % (ii) Exercise Price: R$1.8529 per Company preferred share and R$2.0104 per Company common share, before the reverse share split approved on November 18, 2014, as adjusted by the interbank deposit rate (CDI), plus 1.5% per annum, calculated on a pro rata temporis basis, from the date of the Exchange to the date of the effective payment of each exercise price, in whole or in part, of the Option. The exercise price of the shares will be paid in cash, at the transfer date of the Shares Subject to the Option. Oi is not required to maintain the Exchanged Shares in treasury. In the event that PTIF or any of Oi’s subsidiaries do not hold, in treasury, a sufficient number of Shares Subject to the Option to transfer to Pharol, the Option may be financially settled through payment by the Oi Subsidiaries of the amount corresponding to the difference between the market price of the Shares Subject to the Option and the respective exercise price corresponding to these shares. While the Option is effective, Pharol may not purchase Oi shares, directly or indirectly, in any manner other than by exercising the Option. Pharol may not transfer or assign the Option, nor grant any rights under the Option, including security, without the consent of Oi. If Pharol issues, directly or indirectly, derivatives that are backed by or referenced to Oi shares, it shall immediately use the proceeds derived from such a derivative transaction, directly or indirectly, to acquire the Shares Subject to the Option. Oi may terminate the Option if (i) the Bylaws of Pharol are amended voluntarily to remove or amend the provision that limits the voting right to 10% of all votes corresponding to the capital stock of Pharol; (ii) Pharol directly or indirectly engages in activities that compete with the activities of Oi or its subsidiaries in the countries in which they operate; (iii) Pharol violates certain obligations under the Option Contract. On March 31, 2015, the Option Agreement was amended to provide for (i) the possibility of Pharol assigning or transferring the Call Option, regardless of previous consent by Oi, provided that such assignment or transfer covers at least 1 4 This amendment has been executed with a suspensive condition and would only be effective after an authorization from the CVM to amend the Option Agreement were granted. However, at a meeting held on December 16, 2015, the CVM’s board decided to refuse the entire request filed by the Company for waiver of the requirements of CVM Instructions 10/1980 and 390/2003 to amend the Option Agreement. These Instructions determine that the acquisition and sale of shares of a publicly held company must be conducted in a stock exchange and that the stock options transactions of a publicly held company must be conducted in the markets where the company’s shares are traded, and interdicts any private transactions. The waiver of these requirements would allow the enforcement of the provisions of the amendment to the Call Option Agreement related to (i) the possibility of privately transferring the Call Option from Pharol to Oi; (ii) granting a right of first refusal to Oi to acquire the Call Option; and (iii) the possibility of making the payment of the Option acquisition price in Oi shares, if the right of first refusal if exercised. As at December 31, 2015, the fair value of the Call Option is estimated at R$4 million calculated by the Company using the Black-Scholes (b) Consolidation of the telecommunications industry in the Brazilian market On August 26, 2014, Oi entered into an agreement with Banco BTG Pactual S.A. (“BTG Pactual”) under which the latter will act as commissioner to develop feasible alternatives to render viable participating in the industry consolidation in the Brazilian telecommunications market. As already reported to the market, BTG Pactual held discussions with third parties regarding a possible transaction and the role of BTG Pactual includes contracting other market players that could be interested in the transaction, as Company agent for the transaction. On October 23, 2015, the company received from LetterOne Technology (UK) LLP, one of the companies in the Letter One investment group (“L1 Technology”), a letter containing an exclusivity proposal in a potential transaction for the specific purpose of allowing a consolidation in the Brazilian telecommunications industry involving a potential business combination with TIM Participações S.A. (“TIM Participações”). Under the proposal, L1 Technology would be willing to make a capital contribution of up to US$4.0 billion to the Company, contingent to the consolidation transaction. After assessing the proposal, the Company sent to counter-proposal to L1 Technology on October 28, de 2015, under which Oi and L1 Technology would mutually grant each other an exclusivity right over a seven-month periods, starting on October 23, 2015, especially regarding business combinations involving telecommunications companies or telecommunications assets in Brazil. Since L1 Technology accepted the terms of the counterproposal, Oi and L1 Technology are now bound by the exclusivity agreement during the seven-period starting October 23, 2015. If the transaction under construction materializes, it is expected a decrease in Oi’s leverage to become a more robust player, and the generation of major synergies and gains of scale, promoting the creation of value for all shareholders. A potential union of Oi with TIM Participações should result in the incorporation of a more complete, better-positioned operator, capable of competing with global players already operating in Brazil. Consumers should benefit from this trend, consequently strengthening the Company. On February 25, 2016, Oi disclosed a Material Fact Notice where it informed that it has been notified by L1 Technology that L1 Technology had disclosed a notice stating that it had been informed by TIM that the latter was no longer interested in proceeding with the negotiations on the possibility of a business combination with Oi in Brazil. L1 Technology informed that without TIM’s involvement it could not proceed with transaction as previously planned. In light of this information, Oi will assess the impacts of this notice on the possibilities of consolidation in the Brazilian market. (c) Completion of the share auction The last auction to sell the shares resulting from the reverse split of share fractions approved by the shareholders at Extraordinary Shareholders’ Meeting held on November 18, 2014 was held on June 30, 2015. As a result of the three auctions held, 1,069,131 Company common shares and 1,162,652 Company preferred shares were sold (“Share”), representing all the shares resulting from the reverse split of share fractions. The net proceeds of the sale of the Shares totaled R$13,632 and were deposited on July 10, 2015 on behalf of the share fraction holders, proportionately to the number of shares held. (d) New York Stock Exchange (NYSE) Listing Rule In September 2015, the Company was notified by the NYSE that Oi was not complying with the continued listing rule, which requires that the average closing price of the listed securities of a company cannot go below US$1.00 per share in any consecutive 30-day On January 22, 2016, in order to comply with the minimum share price requirement established by NYSE, Oi disclosed a Notice to the Market announcing the change in Company’s common shares ratio of the Depositary Receipts Program, Level II, Sponsored (“Common DR”) so that each Common DR, which was previously one (1) common share, represents five (5) common shares as from February 1, 2016. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 28. SUBSEQUENT EVENTS Optimization of the Company’s liquidity and debt profile The Company has retained PJT Partners as financial advisor to assist Oi in evaluating financial and strategic alternatives to optimize its liquidity and debt profile. In addition on April 25, 2016, the Company announced that it has entered into a customary non-disclosure agreement with an advisor to a diverse ad hoc group of holders of the bonds issued by the Company and certain of its affiliated companies, as an initial step toward discussions regarding the terms of a potential restructuring. Oi’s operating and business focus remains unchanged and Oi is still committed to continuing to make investments that ensure a continual improvement of its quality of service, which it believes will allow it to continue to bring technological advances to its customers all over Brazil. Oi also continues to undertake efforts for the operating upgrading and transformation of its business by focusing on austerity, infrastructure optimization, process revision, and sales actions. Debenture holders’ general meeting of the 5th and the 9th Issuance of the Company’s Debentures On April 15, 2016, general debenture holders’ meetings were held for: (i) the 5 th th th th th th th Contrarily to the 8 th th With regard to the 5 th th With regard to the 9 th th th The Debenture accelerated maturity declaration did not result, nor will it result, in the accelerated maturity of the other Company debt, both domestic and foreign (cross-default). |
SIGNIFICANT ACCOUNTING POLICI37
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Use of estimates | Use of estimates In preparing the financial statements in conformity with U.S. Generally Accepted Accounting Principles, the Company’s management uses estimates and assumptions based on historical experience and other factors, including expected future events, which are considered reasonable and relevant. The use of estimates and assumptions frequently requires judgments related to matters that are uncertain with respect to the outcomes of transactions and the amount of assets and liabilities. Actual results of operations and the financial position may differ from these estimates. Significant items subject to such estimates and assumptions include the useful lives of fixed assets, allowances for doubtful accounts, the valuation of derivatives, the valuation of available-for-sale investment, deferred tax assets, valuation of fixed assets, pension plan, income tax uncertainties and contingencies. |
Consolidated Financial Statements | Consolidated Financial Statements The accompanying consolidated financial statements include the accounts of Oi S.A. and its majority owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The Company accounts for investments over which it has significant influence but not a controlling financial interest using the equity method of accounting. Beginning June 2, 2015, the remaining assets and liabilities of PT Portugal not sold to Altice (Note 1) have been fully consolidated by the Company in each line item of the balance sheet, except for the assets and liabilities of the operations in Africa and Asia, which are consolidated and stated in a single line item of the balance sheet as assets held for sale, based on management’s expectation and decision of holding these assets and liabilities for sale. |
New Accounting Standards | New Accounting Standards Long-Term Debt and Debt Issuance Costs Deferred Income Taxes and Liabilities Revenue Recognition Business Combinations |
Functional and presentation currency | Functional and presentation currency The Company and its subsidiaries operate primarily as telecommunications operators in Brazil, Africa, and Asia, and engage in activities typical of this industry. The items included in the financial statements of each group company are measured using the currency of the main economic environment of the respective company’s operations (“functional currency”). The consolidated financial statements are presented in Brazilian reais (R$), which is the Company’s functional and presentation currency. To define its functional currency, management considered the currency that influences: • the sales prices of its goods and services; • the costs of services and sales; • the cash flows arising from receipts from customers and payments to suppliers; • interest, investments and financing. Transactions and balances Foreign currency-denominated transactions are translated into the functional currency using the exchange rates prevailing on the transaction dates. Foreign exchange gains and losses arising on the settlement of the transaction and the translation at the exchange rates prevailing at year end, related foreign currency-denominated monetary assets and liabilities are recognized in the statement of profit or loss, except when qualified as hedge accounting and, therefore, deferred in equity as cash flow hedges. Group companies with a different functional currency The profit or loss and the financial position of all Group entities, none of which uses a currency from a hyperinflationary economy, whose functional currency is different from the presentation currency are translated into the presentation currency as follows: • assets and liabilities are translating at the rate prevailing at the end of the reporting period; • revenue and expenses disclosed in the statement of profit or loss are translated using the average exchange rate; • all the resulting foreign exchange differences are recognized as a separate component of equity in other comprehensive income; and • goodwill and fair value adjustments, arising from the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing exchange rate. As at December 31, 2015 and 2014, the foreign currency-denominated assets and liabilities were translated into Brazilian reais using mainly the following foreign exchange rates: Closing rate Average rate Currency 2015 2014 2015 2014 Euro 4.2504 3.2270 4.2158 3.2525 US dollar 3.9048 2.6562 3.8711 2.6394 Cabo Verdean escudo 0.0390 0.0339 0.0298 0.0287 Sao Tomean dobra 0.000174 0.000154 0.000132 0.000131 Kenyan shilling 0.0382 0.0339 0.0293 0.0268 Namibian dollar 0.2510 0.2606 0.2297 0.2169 Mozambican metical 0.0832 0.0838 0.0767 0.0742 |
Segment information | Segment information The presentation of information relating to operating segments is consistent with the internal reports provided to the chief operating decision maker of the Company. The results of segment operations are regularly reviewed in order to make decisions about the allocation of resources to assess operational performance and for strategic decision-making. |
Business combinations | Business combinations The Company uses the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred, and the equity instruments issued. The consideration transferred includes the fair value of assets and liabilities resulting from a contingent consideration contract, where applicable. The identifiable assets acquired and the liabilities and contingent liabilities assumed in a business combination are initially measured at their fair values at the date of acquisition. The Company depreciates amounts recognized according to the useful lives of the underlying assets, and tests such assets to determine any asset impairment losses when there is evidence of impairment. The Company tests goodwill for impairment on an annual basis. |
Investment Securities | Investment Securities Investment securities at December 31, 2015 and 2014 consist of short-term and long-term investments classified as trading and an investment at Unitel classified as available-for-sale. Trading and available-for-sale securities are recorded at fair value. Unrealized holding gains and losses on trading securities are included in earnings. Unrealized holding gains and losses, net of the related tax effect, on available-for-sale securities are excluded from earnings and are reported as a separate component of accumulated other comprehensive income until realized. A decline in the market value of any available-for-sale below cost that is deemed to be other-than-temporary results in an impairment to reduce the carrying amount to fair value. To determine whether an impairment is other-than-temporary, the Company considers all available information relevant to the collectibility of the security, including past events, current conditions, and reasonable and supportable forecasts when developing estimate of cash flows expected to be collected. Evidence considered in this assessment includes the reasons for the impairment, the severity and duration of the impairment, changes in value subsequent to year-end, forecasted performance of the investee, and the general market condition in the geographic area or industry the investee operates in. |
Accounts receivable | Accounts receivable Accounts receivable from telecommunications services provided are stated at the tariff or service amount on the date they are provided and do not differ from their fair values. These receivables also include receivables from services provided and not billed by the end of the reporting period and receivables related to handset, SIM cards, and accessories. The allowance for doubtful accounts estimate is recognized in an amount considered sufficient to cover possible losses on the realization of these receivables. The allowance for doubtful accounts estimate is prepared based on historic default rates. The allowance for doubtful accounts is set up to recognize probable losses on accounts receivable taking into account the measures implemented to restrict the provision of services to and collect late payments from customers. There are cases of agreements with certain customers to collect past-due receivables, including agreements that allow customers to settle their debts in installments. The actual amounts not received may be different from the allowance recognized, and additional accruals might be required. |
Non-current assets held for sale and discontinued operations | Non-current assets held for sale and discontinued operations Non-current assets are classified as assets held for sale when their carrying amount is recoverable, principally through a sale, and when such sale is highly probable. These assets are stated at the lower of their carrying value and fair value less costs to sell. Disposals that represent a strategic shift that should have or will have a major effect on the Company’s operations and financial results qualify as discontinued operations. The results of discontinued operations are reported in discontinued operations in the consolidated statements of income for current and prior periods commencing in the period in which the business meets the criteria of a discontinued operation, and include any gain or loss recognized on closing or adjustment of the carrying amount to fair value less cost to sell. |
Property, plant and equipment | Property, plant and equipment Property, plant and equipment is stated at cost of purchase or construction, less accumulated depreciation. Historical costs include expenses directly attributable to the acquisition of assets. They also include certain costs for facilities, when it is probable that the future economic benefits related to such costs will flow to the Company. The borrowings and financing costs directly attributable to the purchase, construction or production of a qualifying asset are capitalized in the initial cost of such asset. Qualifying assets are those that necessarily require a significant time to be ready for use. Subsequent costs are added to the carrying amount as appropriate, when, and only when, these assets generate future economic benefits and can be reliably measured. The residual balance of the replaced asset is derecognized. Maintenance and repair costs are recorded in profit or loss as incurred. Depreciation is calculated on a straight-line basis, based on the estimated useful lives of the assets. The useful lives are reviewed annually by the Company. |
Intangible assets | Intangible assets Acquired intangible assets with finite useful lives are recognized at cost, less amortization and accumulated impairment losses. Amortization is recognized on a straight-line basis over the asset’s estimated useful life. The estimated useful life and method of amortization are reviewed at the end of each annual reporting period, and the effect of any changes in estimates is accounted for on a prospective basis. Intangible assets with indefinite useful lives are carried at cost less accumulated impairment losses. Software licenses purchased are capitalized based on the costs incurred to purchase the software and make it ready for use. Software maintenance costs are expensed as incurred. |
Long-lived assets | Long-lived assets Long-lived assets, such as property, plant, and equipment, and purchased intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying amount. If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. |
Derivative financial instruments and hedging activities | Derivative financial instruments and hedging activities Derivative financial instruments are contracted to mitigate exposure to market risks arising from changes in exchange rates on foreign currency-denominated debts and short-term investments held abroad, and also from changes in earnings. Derivatives are initially recognized at cost at the inception of the derivative contract and are subsequently measured at fair value based on future cash flow estimates associated to the respective instrument. Changes in the fair value of any of these derivatives are recorded directly in earnings. The Company uses hedge accounting for derivative financial instruments. The purpose of this practice is to reduce the volatility of the gains or losses recognized due to changes in the fair values of these derivative financial instruments. Derivative financial instruments that qualify for hedge accounting are submitted to periodic prospective and retrospective effectiveness tests using the dollar offset method. Derivative instruments contracted and designated as hedging instruments are formally identified through initial designation documentation. Derivative financial instruments classified as cash flows hedges were designated for hedge accounting. The effective portion, is recognized in Other Comprehensive Income, net of taxes, and is reclassified to financial income (expenses) in the same period or periods during which the hedge transaction affects earnings. The ineffective portion, measured after the quarterly effectiveness tests, is recognized in financial income (expenses) in the same period it occurs. Changes in the fair values of derivative financial instruments that are not designated for purposes of hedge accounting are recognized as financial income or expenses in profit or loss in the period they occur. The hedge relationship expires and the designation is removed when: (i) The derivative contract is settled, terminated or settled, or if the Company or its subsidiary TMAR voluntarily removes the designation. If the hedged item continues to exist, the balances accumulated in other comprehensive income related to the changes in the fair value of the derivative are transferred to profit or loss for the year in which the hedged interest expenses and foreign exchange fluctuations are allocated. (ii) The debt was either prepaid or settled. In this case, the balance accumulated in other comprehensive income is immediately transferred to financial income or expenses in profit or loss for the year the designation is terminated. The required information on derivative instruments and the effects recognized by the Company are described in Note 3. |
Contingencies | Contingencies Liabilities for loss contingencies arising from claims, assessment, litigation, fines and penalties are recorded when it is probable that the liability has been incurred and the amount can be reasonably estimated, based on opinion of the management and its in-house and outside legal counsel, and the amounts are recognized based on the cost of the expected outcome of ongoing lawsuits. |
Pension and other postretirement plans | Pension and other postretirement plans The Company and its subsidiaries have defined benefit and defined contribution plans. The Company also sponsors a defined benefit health care plan for retirees and employees. In the defined contribution plan, the sponsor makes fixed contributions to a fund managed by a separate entity. The contributions are recognized as employee benefit expenses as incurred. The sponsor does not have the legal or constructive obligation of making additional contributions, in the event the fund lacks sufficient assets to pay all employees the benefits related to the services provided in the current year and prior years. For the defined benefit plans, the Company records annual amounts relating to its pension and postretirement plans based on calculations that incorporate various actuarial and other assumptions, including discount rates, mortality, assumed rates of return, compensation increases, turnover rates and healthcare cost trend rates. The Company reviews its assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends when it is appropriate to do so. The effect of modifications to those assumptions is recorded in accumulated other comprehensive income and amortized to net periodic cost over future periods using the corridor method. The Company believes that the assumptions utilized in recording its obligations under its plans are reasonable based on its experience and market conditions. The Company recognizes the over or under-funded status of a defined benefit postretirement plan as an asset or liability in its balance sheet and to recognizes changes in that funded status in the year in which the changes occur through other comprehensive income. The Company is not required to record actuarial calculations for multi-employer pension plans such as the PBS-A and contributions to such plans are recorded on an accrual basis. Refunds from these plans are recorded only upon the cash receipt. |
Revenue recognition | Revenue recognition Revenues correspond basically to the amount of the payments received or receivable from sales of services in the regular course of the Company’s and its subsidiaries’ activities. Service revenue is recognized when services are provided. Local and long distance calls are charged based on time measurement according to the legislation in effect. The services charged based on monthly fixed amounts are calculated and recorded on a straight-line basis. Prepaid services are recognized as unearned revenues and recognized in revenue as services are used by customers. Revenue from sales of handsets and accessories is recognized when these items are delivered and accepted by the customers. Discounts on services provided and sales of cell phones and accessories are taken into consideration in the recognition of the related revenue. Revenues involving transactions with multiple elements are identified in relation to each one of their components and the recognition criteria are applied on an individual basis. Revenue is not recognized when there is significant uncertainty as to its realization. |
Expense recognition | Expense recognition Expenses are recognized on an accrual basis, considering their relation with revenue realization. Prepaid expenses attributable to future years are deferred over the related periods. |
Financial income and expenses | Financial income and expenses Financial income is recognized on an accrual basis and comprises interest on receivables settled after the due date, gains on short-term investments and gains on derivative instruments. Financial expenses represent interest effectively incurred and other charges on borrowings, financing, derivative contracts, and other financial transactions. |
Income taxes | Income taxes Income taxes are recorded under the asset and liability method. Deferred taxes are recognized for temporary differences and tax loss carryforwards are recorded in assets or liabilities, as applicable. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50 percent likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The company and its subsidiaries file income tax returns in all jurisdictions in which they do business (Brazil is the only major tax jurisdiction). In Brazil, income tax returns are subject to review and adjustment by the tax authorities during a period of five calendar years. Positions challenged by the taxing authorities may be settled or appealed by the company. All audit periods prior to 2010 are closed for federal examination purposes. As of December 31, 2015 the company has no unrecognized tax benefits, nor any interest and penalties thereon. Interest and penalties on an underpayment of income taxes are recognized as part of interest expense and other expenses, respectively. |
SIGNIFICANT ACCOUNTING POLICI38
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Foreign Exchange Rates | As at December 31, 2015 and 2014, the foreign currency-denominated assets and liabilities were translated into Brazilian reais using mainly the following foreign exchange rates: Closing rate Average rate Currency 2015 2014 2015 2014 Euro 4.2504 3.2270 4.2158 3.2525 US dollar 3.9048 2.6562 3.8711 2.6394 Cabo Verdean escudo 0.0390 0.0339 0.0298 0.0287 Sao Tomean dobra 0.000174 0.000154 0.000132 0.000131 Kenyan shilling 0.0382 0.0339 0.0293 0.0268 Namibian dollar 0.2510 0.2606 0.2297 0.2169 Mozambican metical 0.0832 0.0838 0.0767 0.0742 |
FINANCIAL INSTRUMENTS AND RIS39
FINANCIAL INSTRUMENTS AND RISK ANALYSIS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Financial Assets and Financial Liabilities Carried At Fair Value | The table below summarizes our financial assets and financial liabilities carried at fair value at December 31, 2015 and 2014. Accounting measurement 2015 2014 Carrying amount Fair value Carrying amount Fair value Assets Cash and banks Fair value 1,111,840 1,111,840 532,285 532,285 Cash equivalents Fair value 13,786,223 13,786,223 1,916,921 1,916,921 Short-term investments Fair value 1,927,686 1,927,686 282,700 282,700 Derivative financial instruments Fair value 7,386,703 7,386,703 3,221,481 3,221,481 Accounts receivable (i) Amortized cost 8,379,719 8,379,719 7,455,687 7,455,687 Held-for-sale assets (Note 26) Available-for-sale financial asset Fair value 3,541,314 3,541,314 4,284,416 4,284,416 Dividends receivable Amortized cost 2,042,191 2,042,191 1,261,826 1,261,826 Liabilities Trade payables (i) Amortized cost 5,004,833 5,004,833 4,331,286 4,331,286 Borrowings and financing Borrowings and financing (ii) Amortized cost 17,049,280 17,049,280 15,335,155 15,335,155 Debentures Amortized cost 4,138,025 4,128,539 7,776,876 7,513,867 Senior notes Amortized cost 38,670,111 22,159,838 12,737,364 12,199,092 Derivative financial instruments Fair value 2,510,343 2,510,343 666,922 666,922 Dividends and interest on capital Amortized cost 96,433 96,433 185,138 185,138 Licenses and concessions payable (iii) Amortized cost 918,537 918,537 1,361,940 1,361,940 Tax refinancing program (iii) Amortized cost 795,088 795,088 990,230 990,230 Other payables (payable for the acquisition of equity interest) (iii) Amortized cost 382,230 382,230 408,978 408,978 (i) The balances of accounts receivables and trade payables have near terms and, therefore, they are not adjusted to fair value. (ii) Part of this balance of borrowings and financing with the BNDES and export credit agencies correspond to exclusive markets and, therefore, the fair values of these instruments is similar to their carrying amounts. A portion of the balance of borrowings and financing refers to the bonds issued in the international market, for which is there is a secondary market, and their fair values are different from their carrying amounts. (iii) The licenses and concessions payable, the tax refinancing program, and other obligations (payable for the acquisition of equity interest) are stated at the amounts that these obligations are expected to be settled and are not adjusted to fair value. |
Schedule of Fair Value Measurement Hierachy | Fair value measurement hierarchy Fair value 2015 Fair value 2014 Assets Cash and banks Level 1 1,111,840 532,285 Cash equivalents Level 2 13,786,223 1,916,921 Short-term investments Level 2 1,927,686 282,700 Derivative financial instruments Level 2 7,386,703 3,221,481 Available-for-sale financial asset (Note 26) Level 3 3,541,314 4,284,416 Liabilities Derivative financial instruments Level 2 2,510,343 666,922 |
Schedule of Exchange Rates Used for Foreign Currency Translation | Management estimated the impact of a potential depreciation of the euro and the US dollar by 25% and 50%, using as benchmark for the possible and remote scenarios, respectively, as follows: Rate Description 2015 Depreciation Probable scenario US dollar 3.9048 0 % Euro 4.2504 0 % Possible scenario US dollar 2.9286 25 % Euro 3.1878 25 % Remote scenario US dollar 1.9524 50 % Euro 2.1252 50 % Rate Description 2015 Depreciation Probable scenario US dollar 3.90480 0 % Euro 4.25040 0 % Possible scenario US dollar 4.88100 25 % Euro 5.31300 25 % Remote scenario US dollar 5.85720 50 % Euro 6.37560 50 % |
Impact of Foreign Exchange Exposure | 2015 Description Individual risk Probable scenario Possible scenario Remote scenario US dollar cash Dollar 642,418 481,814 321,209 Euro cash Euro 12,438,363 9,328,772 6,219,182 Total associated to exchange rates 13,080,781 9,810,586 6,540,391 2015 Description Individual risk Probable scenario Possible scenario Remote scenario US dollar debt Dollar appreciation 23,054,987 28,818,734 34,582,481 Derivatives (net position - US$) Dollar depreciation (22,470,237 ) (28,087,796 ) (33,705,356 ) US dollar cash Dollar depreciation (642,418 ) (803,023 ) (963,627 ) Euro debt Euro appreciation 24,316,758 30,395,948 36,475,137 Derivatives (net position - euro) Euro depreciation (11,606,953 ) (14,508,691 ) (17,410,430 ) Euro cash Euro depreciation (12,438,363 ) (15,547,954 ) (18,657,545 ) Total associated to exchange rates 213,774 267,218 320,660 |
Schedule of Financial Assets and Liabilities | These foreign currency-denominated financial assets and financial liabilities are presented in the balance sheet as follows: 2015 2014 Carrying amount Fair value Carrying amount Fair value Financial assets Cash and banks 761,788 761,788 26,759 26,759 Cash equivalents 10,553,452 10,553,452 198,047 198,047 Short-term investments 1,765,541 1,765,541 86,807 86,807 Derivative financial instruments 6,940,963 6,940,963 3,025,464 3,025,464 Financial liabilities Borrowings and financing (Note 16) 46,935,152 30,727,817 14,781,242 14,342,043 Derivative financial instruments 1,915,910 1,915,910 425,784 425,784 These assets and liabilities are presented in the balance sheet as follows: 2015 2014 Carrying amount Fair value Carrying amount Fair value Financial assets Cash equivalents 3,232,771 3,232,771 1,718,874 1,718,874 Short-term investments 162,145 162,145 195,893 195,893 Derivative financial instruments 445,740 445,740 196,017 196,017 Financial liabilities Borrowings and financing 18,307,705 18,298,218 17,722,928 17,717,628 Derivative financial instruments 594,433 594,433 241,138 241,138 |
Derivative Financial Instruments | Derivative financial instruments are summarized as follows: Derivatives designated for hedge accounting Maturity (years) Fair value Amounts (payable)/receivable 2015 2014 US$/R$ cross currency swaps 0.1 - 8.2 4,954,291 1,816,206 US$/fixed rate cross currency swaps 4.8 819,647 649,293 EUR/R$ cross currency swaps 1.9 - 4.3 (169,513 ) EUR/R$ non-deliverable forwards (NDFs) < 1 year 23,524 Derivatives not designated for hedge accounting Maturity (years) Fair value Amounts (payable)/receivable 2015 2014 US$/R$ cross currency swaps < 1 year 31,467 24,122 R$/US$ cross currency swaps < 1 year (27,965 ) (31,290 ) US$/R$ non-deliverable forwards (NDFs) < 1 year (156,707 ) 107,718 EUR/R$ non-deliverable forwards (NDFs) < 1 year (427,452 ) 10,107 Options (USD/R$ put option) 3.3 - 4.8 8,783 Options (EUR/R$ put option) 3.8 24,767 Options (EUR/R$ call option) 3.8 (32,265 ) The amounts of contracted derivatives to manage exposure to floating interest rates on outstanding debt are summarized below: Derivatives designated for hedge accounting Maturity (years) Fair value Amounts (payable)/receivable 2015 2014 Fixed rate/DI rate swaps 4.8 (146,121 ) (37,627 ) US$ LIBOR/US$ fixed rate swaps < 1 year (1,413 ) Derivatives not designated for hedge accounting Maturity (years) Fair value Amounts (payable)/receivable 2015 2014 US$ LIBOR/US$ fixed rate swaps 0.1- 6.1 (448,312 ) (200,771 ) US$ fixed rate/US$ LIBOR swaps 6.1 445,740 194,690 |
Schedule of Gain Losses on Derivative Instruments | As at December 31, 2015 and 2014, the derivative transactions in the amounts shown below were recognized in financial income (expenses) (see Note 6): 2015 2014 Gain (loss) on currency swaps 4,539,844 674,228 Currency forwards 1,322,916 (317,740 ) Options (21,850 ) Total 5,840,910 356,488 |
Movements in Hedge Accounting Effects in Other Comprehensive Income | The movements below, related interest rate hedges designated for hedge accounting treatment, were recognized in other comprehensive income: Table of movements in hedge accounting effects in other comprehensive income Balance in 2012 12,057 Loss on designated hedges (80,487 ) Transfer on ineffective portion to profit or loss 500 Amortization of hedges to profit or loss at effective rate (24,075 ) Deferred taxes on hedge accounting 35,381 Balance in 2013 (56,624 ) Gain on designated hedges 20,029 Transfer on ineffective portion to profit or loss (97 ) Amortization of hedges to profit or loss at the effective rate 3,070 Deferred taxes on hedge accounting (7,820 ) Share of subsidiary’s hedge accounting Balance in 2014 (41,442 ) Gain on designated hedges (104,339 ) Transfer on ineffective portion to profit or loss 78 Amortization of hedges to profit or loss at the effective rate 3,325 Deferred taxes on hedge accounting 34,319 Balance in 2015 (108,059 ) |
Schedule of Gain or Loss on Derivatives | As at December 31, 2015 and 2014, the amounts shown below were recorded as gain or loss on derivatives: (see Note 6). 2015 2014 Gain (loss) on interest rate swap (43,808 ) 70,896 Total (43,808 ) 70,896 |
Schedule of Interest Rate Scenarios | Before the end of the first quarter of 2016, the National Monetary Council had decided for a new increase for this rate, this time to 7.5% p.a., effective in January 1 - March 31, 2016. 2015 Interest rate scenarios Probable scenario Possible scenario Remote scenario CDI TJLP 6M USD LIBOR CDI TJLP 6M USD LIBOR CDI TJLP 6M USD 14.14 % 7.0 % 0.84615 % 17.68 % 8.8 % 1.05769 % 21.21 % 10.5 % 1.26923 % |
Schedule of Impacts of Exposure to Interest Rates | The impacts of exposure to interest rates, in the sensitivity scenarios estimated by the Company, are shown in the table below: 2015 Transaction Individual risk Probable Possible Remote CDI-indexed debt CDI increase 2,120,449 2,516,488 2,980,156 Derivative financial instruments (net position - CDI) CDI increase 10,669,673 13,047,050 15,566,283 TJLP-indexed debt TJLP increase 942,049 1,119,643 1,304,957 US$ LIBOR-indexed debt US$ LIBOR increase 562,123 660,468 715,699 Derivative instruments (net position - LIBOR) US$ LIBOR decrease (198,734 ) (211,566 ) (231,488 ) Total associated to interest rates 14,095,560 17,132,083 20,335,607 |
Contractual Maturities of Financial Liabilities, Including Estimated Interest Payments | The following are the contractual maturities of the financial liabilities, including estimated interest payments, where applicable: Less than One to Three Three to More than Total (in millions of reais ) Continuing operations: Loans and financings (i) R$ 15,282 R$ 24,998 R$ 16,894 R$ 6,243 R$ 63,417 Debentures (ii) 1,622 4,170 17 — 5,809 Unconditional purchase obligations (iii) 1,477 758 343 — 2,578 Concession fees (iv) 288 306 348 1,437 2,379 Usage rights (v) 912 7 — — 919 Pension plan contributions (vi) 144 433 289 577 1,443 R$ 19,725 R$ 30,672 R$ 17,891 R$ 8,257 R$ 76,545 The amounts disclosed in the tables take into account the contractual undiscounted payment outflow estimates, these amounts are not reconciled with the amounts disclosed in the balance sheet for borrowings and financing, derivative financial instruments, and trade payables. (i) Includes (1) estimated future payments of interest on our loans and financings, calculated based on interest rates and foreign exchange rates applicable at December 31, 2015 and assuming that all amortization payments and payments at maturity on our loans and financings will be made on their scheduled payment dates, and (2) estimated future cash flows on our derivative obligations, calculated based on interest rates and foreign exchange rates applicable as of December 31, 2015 and assuming that all payments on our derivative obligations will be made on their scheduled payment dates; (ii) Includes estimated future payments of interest on our debentures, calculated based on interest rates applicable as of December 31, 2015 and assuming that all amortization payments and payments at maturity on our debentures will be made on their scheduled payment dates; (iii) Consists of (1) obligations in connection with a business process outsourcing agreement, and (2) purchase obligations for network equipment pursuant to binding obligations which include all significant terms, including fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction; (iv) Consists of estimated bi-annual fees due to ANATEL under our concession agreements expiring in 2025. These estimated amounts are calculated based on our results for the year ended December 31, 2015; (v) Consists of payments due to ANATEL for radio frequency licenses. Includes accrued and unpaid interest as of December 31, 2015; and (vi) Consists of expected contributions to amortize the actuarial deficit of the BrTPREV plan. |
NET OPERATING REVENUE (Tables)
NET OPERATING REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Other Income and Expenses [Abstract] | |
Schedule of Net Operating Revenue | 2015 2014 2013 Gross operating revenue 44,519,320 45,357,481 45,252,584 Deductions from gross revenue (17,165,555 ) (17,110,382 ) (16,830,437 ) Taxes (8,148,655 ) (8,906,909 ) (9,538,623 ) Discounts and other deductions (9,016,900 ) (8,203,473 ) (7,291,814 ) Net operating revenue 27,353,765 28,247,099 28,422,147 |
OPERATING EXPENSES (Tables)
OPERATING EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Text Block [Abstract] | |
Summary of Operating Expenses | 2015 2014 2013 Operating expenses by nature Third-party services (6,317,233 ) (6,258,606 ) (6,119,733 ) Depreciation and amortization (6,195,039 ) (5,766,702 ) (5,691,824 ) Rentals and Insurance (3,599,830 ) (3,119,521 ) (2,119,684 ) Personnel (2,719,530 ) (2,829,307 ) (2,534,222 ) Network maintenance service (1,901,569 ) (1,923,074 ) (2,328,140 ) Interconnection (1,808,845 ) (2,689,815 ) (3,965,623 ) Contingencies (861,500 ) (779,314 ) (656,849 ) Allowance for doubtful accounts (721,175 ) (649,463 ) (922,779 ) Advertising and publicity (405,626 ) (674,275 ) (556,500 ) Handset and other costs (284,637 ) (730,444 ) (515,377 ) Impairment losses (i) (590,641 ) Taxes and other income (expenses) (1,013,056 ) (1,459,012 ) (1,397,982 ) Other operating income (expenses), net (ii) 277,954 3,245,643 2,369,555 (26,140,727 ) (23,633,890 ) (24,439,158 ) Operating expenses by function Cost of sales and/or services (16,250,083 ) (16,257,192 ) (16,466,773 ) Selling expenses (4,719,811 ) (5,565,757 ) (5,532,045 ) General and administrative expenses (3,912,178 ) (3,834,563 ) (3,683,440 ) Other operating income 1,630,056 4,466,914 3,193,024 Other operating expenses (2,866,828 ) (2,437,411 ) (1,932,174 ) Equity pick up (21,883 ) (5,881 ) (17,750 ) Total operating expenses (26,140,727 ) (23,633,890 ) (24,439,158 ) (i) As at December 31, 2015, the Company conducted the annual impairment test and recognized a loss on goodwill amounting to R$501,465 related to goodwill and trademarks for the Telecommunication services in Brazil due to a significant change in the macroeconomic conditions in Brazil and R$89,176 related to Africa which is being reported as held for sale. The fair value of the reporting unit was estimated using the expected present value of future cash flows. (ii) The other net operating income (expenses) for the year ended December 31, 2015 primarily include the reversal of a civil contingency amounting to R$325,709 arising from the revision of the calculation methodology and R$47,756 in costs relating to terminations of employments contracts in this period. Other net operating income (expenses) for the year ended December 31, 2014 primarily includes the gain of R$2.4 billion on the sale, net of transaction expenses, recognized in the context of the agreement entered into on December 3, 2013 by the Company and SBA Torres Brasil for the transfer of 100% of the shares of one of its subsidiaries that held 2,007 telecommunication towers used to provide mobile telephony services and R$355 million resulting from the revision of the calculation methodology of the provisions for losses in corporate lawsuits and the reversal of R$476 million from the provision related to the adhesion to the REFIS tax refinancing program. |
FINANCIAL INCOME (EXPENSES) (Ta
FINANCIAL INCOME (EXPENSES) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Other Income and Expenses [Abstract] | |
Schedule of Other Nonoperating Income (Expense) | 2015 2014 2013 Financial income Exchange differences on translating foreign short-term investments (trading) 3,349,783 32,444 69,626 Interest on other assets 740,417 762,498 694,734 Income from short-term investments 235,042 354,526 278,598 Interest on related parties loans 29,057 1,066 Other income (i) 1,010,235 194,233 332,259 Total 5,364,534 1,344,767 1,375,217 Financial expenses and other charges a) Borrowing and financing costs Inflation and exchange losses on third-party borrowings (10,908,438 ) (1,464,510 ) (2,013,066 ) Interest on borrowings payable to third parties (3,178,461 ) (1,979,414 ) (1,591,915 ) Interest on debentures (871,977 ) (953,863 ) (860,400 ) Derivatives 5,797,102 427,384 1,158,520 Subtotal: (9,161,774 ) (3,970,403 ) (3,306,861 ) b) Other charges Loss on available for sale financial assets (ii) (447,737 ) Interest on other liabilities (833,276 ) (814,148 ) (643,318 ) Tax on transactions and bank fees (712,799 ) (385,824 ) (193,048 ) Inflation adjustment to provisions (176,297 ) (233,276 ) (246,205 ) Interest on taxes in installments - tax financing program (93,784 ) (132,194 ) (81,262 ) Other expenses (iii) (476,875 ) (357,844 ) (206,479 ) Subtotal: (2,740,768 ) (1,923,286 ) (1,370,312 ) Total (11,902,542 ) (5,893,689 ) (4,677,173 ) Financial income (expenses) (6,538,008 ) (4,548,922 ) (3,301,956 ) (i) Refers basically to the gain on debenture repayment transactions and includes USD187.5 million (R$733 million) related with our portion of dividends approved by Unitel. (ii) Refers basically to the loss of R$408 million due to other-than-temporary impairment of the investment in Unitel classified as available-for-sale. (iii) Represented mainly by financial fees and commissions. |
CASH, CASH EQUIVALENTS AND SH43
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Cash and Cash Equivalents | (a) Cash and cash equivalents 2015 2014 Cash and banks 1,111,840 532,285 Cash equivalents 13,786,223 1,916,921 Total 14,898,063 2,449,206 2015 2014 Time deposits 10,734,985 205,523 Bank certificates of deposit (CDBs) 1,387,158 920,116 Repurchase agreements 1,637,798 773,487 Other 26,282 17,795 Cash equivalents 13,786,223 1,916,921 (b) Short-term investments 2015 2014 Time deposits 1,700,386 Private securities 125,966 111,285 Government securities 101,334 171,415 Total 1,927,686 282,700 Current 1,801,720 171,415 Non-current 125,966 111,285 |
TRADE ACCOUNTS RECEIVABLE, NET
TRADE ACCOUNTS RECEIVABLE, NET (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Receivables [Abstract] | |
Schedule of Financing Receivables | 2015 2014 Billed services 6,733,219 5,481,028 Unbilled services 1,296,562 1,450,777 Mobile handsets and accessories sold 911,077 1,032,022 Allowance for doubtful accounts (561,139 ) (513,787 ) Total 8,379,719 7,450,040 |
List of Past Due Financing Receivables | The aging list of trade receivables is as follows: 2015 2014 Current 6,855,027 5,878,915 Past-due up to 60 days 1,296,612 1,388,330 Past-due from 61 to 90 days 146,608 136,200 Past-due from 91 to 120 days 121,916 113,212 Past-due from 121 to 150 days 124,887 102,139 Over 150 days past-due 395,808 345,031 Total 8,940,858 7,963,827 |
Schedule of Aging Accounts Receivable | The movements in the allowance for doubtful accounts were as follows: Balance at Jan 1, 2014 (654,042 ) Acquisition of investments - PT Portugal (652,964 ) Allowance for doubtful accounts (684,017 ) Trade receivables written off as uncollectible 712,128 Foreign exchange differences 6,841 Transfer to assets held for sale 758,267 Balance in 2014 (513,787 ) Allowance for doubtful accounts (692,935 ) Trade receivables written off as uncollectible 645,583 Balance in 2015 (561,139 ) |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Summary of Income Taxes | Total income taxes for the years ended December 31, 2015, 2014 and 2013 were allocated as follows: 2015 2014 2013 Income (expenses) from continuing operations (3,379,927 ) (758,268 ) (76,610 ) Expenses from discontinued operations (327,115 ) (92,545 ) Total income tax recognized in earnings (3,707,042 ) (850,813 ) (76,610 ) Income tax recognized in other comprehensive income (194,020 ) 243,333 (17,514 ) |
Summary of Income Tax Expense Attributable to Income From Continuing Operation | Income tax expense attributable to income from continuing operations consists of: 2015 2014 2013 Income tax and social contribution Current taxes (781,576 ) (622,001 ) (418,498 ) Deferred taxes (2,598,351 ) (136,267 ) 341,888 Total (3,379,927 ) (758,268 ) (76,610 ) |
Summary of Tax Rate Reconciliation From Continuing Operation | The tax rate reconciliation from continuing operation consists of the following: 2015 2014 2013 Income (loss) before taxes (i) (5,324,970 ) 64,287 681,033 Income tax and social contribution Income tax and social contribution at statutory rate (34%) 1,810,490 (21,858 ) (231,552 ) Valuation allowance (ii) (4,755,151 ) 5,848 (68,654 ) Effect of foreign rate differential (iii) (106,388 ) (23,795 ) (13,046 ) Tax effects on permanent additions (iv) (268,989 ) (688,719 ) (76,433 ) Tax effects on permanent exclusions 114,052 376,241 280,844 Tax effect of REFIS permanent additions (v) (443,401 ) Tax incentives (basically, operating income) (vi) 7,332 36,281 31,573 Tax amnesty program (vii) (165,676 ) — — Other (15,597 ) 1,135 658 Income tax and social contribution effect on profit or loss (3,379,927 ) (758,268 ) (76,610 ) (i) In 2013, substantially all pre tax income and income tax are related to Brazilian Companies. In 2015 and 2014 income before taxes and income tax for continuing operations is as follows: 2015 Brazil Foreign operations Total Income (loss) before taxes (4,428,005 ) (896,965 ) (5,324,970 ) Income tax (3,191,186 ) (188,741 ) (3,379,927 ) Current taxes (589,090 ) (192,486 ) (781,576 ) Deferred taxes (2,602,096 ) 3,745 (2,598,351 ) 2014 Brazil Foreign Total Income (loss) before taxes (145,581 ) 209,868 64,287 Income tax (615,406 ) (142,862 ) (758,268 ) Current taxes (479,061 ) (142,940 ) (622,001 ) Deferred taxes (136,345 ) 78 (136,267 ) (ii) Refers to valuation allowance due to change in judgment about the recoverability of deferred tax assets. The change in the beginning-of-the year balance of the valuation allowance due to change in judgment about the recoverability of deferred tax assets amounts to R$2,845,521. (iii) Refers to the effects of the difference between the applicable tax rate in Brazil and the tax rates applicable to other Group companies located abroad. (iv) In 2015 the main effects of permanent addition refers to: (1) the impairment of Unitel available-for-sale investment which is not tax deductible in the amount of R$152 million (Note 26), (2) the impairment of goodwill and trademarks for the Telecommunication services in Brazil and impairment of goodwill related to África, which is not tax deductible in the amount of R$91 million and (3) nondeductible fines in the amount of R$25 million. In 2014 the main effects refers to the impairment of PT SGPS shares held subsidiary TMAR which is not tax deductible in the amount of R$266 million. (v) In 2014, the main effects are linked to goodwill amortization (pre-merger period), settlement of principal, fine and interest utilizing tax loss carryforwards as permitted by Article 2 of Law 12996/2014 and Article 33 of Law 13043/2014. (vi) These tax incentives correspond mainly to a 75% reduction in the current income tax due on operating income obtained as a result of telecommunication services rendered in certain northern and northeast regions of Brasil, where the Company holds facilities for the purpose of rendering those services. This tax benefit is usually granted for a 10 year period, limited up to January 1, 2024. (vii) Refers to uncertain tax position taken in prior periods which were assessed by the taxing authorities. Although the Company believed in prior periods that these positions would be more-likely-than-not of being sustained, it has decided to adhere to PRORELIT and avoid substantial costs to keep on going discussions with government. PRORELIT program allowed taxpayers to settle federal tax debts accrued prior to June 30th, 2015, excluding tax debts that are subject to tax installment payments. |
Schedule of Unrecognized Tax Benefits RollForward | A reconciliation of the beginning and ending amount of total unrecognized tax benefits for the year ended December 31, 2015 as follows: 2015 2014 Balance, beginning of year 84,650 84,650 Increase related to prior year tax position 165,676 Settlements (250,326 ) Balance, end of year 84,650 |
Summary of Significant Components of Current and Deferred Taxes | Significant components of current and deferred taxes ASSETS 2015 2014 Current recoverable taxes Recoverable income tax (IRPJ) (i) 416,125 485,929 Recoverable social contribution (CSLL) (i) 153,059 182,772 IRRF/CSLL - withholding income taxes (ii) 346,389 428,488 Income taxes recoverable (v) 147,278 60,944 Total current 1,062,851 1,158,133 LIABILITIES 2015 2014 Current taxes payable Income tax payable 211,571 306,366 Social contribution payable 128,053 170,916 Total current 339,624 477,282 2015 2014 Deferred taxes assets Income tax and social contribution on merged goodwill (iii) 2,423,763 1,605,513 Income tax and social contribution on temporary differences (iv) 3,885,435 2,499,243 Income tax and social contribution on tax loss carryforwards (iv) 4,134,378 3,447,938 Total - deferred taxes assets 10,443,576 7,552,694 Business combinations – other intangibles (3,047,832 ) (3,464,404 ) Pension plan assets (299,574 ) (176,397 ) Total deferred tax liabilities (3,347,406 ) (3,640,801 ) Valuation allowance (iv) (6,239,713 ) (217,655 ) Total deferred taxes, net 856,457 3,694,238 (i) Refer mainly to prepaid income tax and social contribution that will be offset against federal taxes payable in the future. (ii) Refer to corporate income tax credits on short-term investments, related parties loans, government entities, and other that are used as deductions from income tax for the years, and social contribution withheld at source on services provided to government agencies. (iii) Refer to: (i) deferred income tax and social contribution assets calculated as tax benefit originating from the goodwill paid on acquisition by the Company and recognized by the merged companies in the course of 2009. The realization of the tax basis arises from the amortization of the goodwill balance based on the STFC license and in the appreciation of property, plant and equipment, the utilization of which is estimated to occur through 2025, and (ii) deferred income tax and social contribution assets originating from the goodwill paid on the acquisition of interests by the Company in 2008-2011, recognized by the companies merged with and into TmarPart and by TmarPart merged with and into the Company on September 1, 2015, which was based on the Company’s expected future earnings and the amortization of which is estimated to occur through 2025 (Note 1). (iv) For the year ended December 31, 2015, total valuation allowance increased from R$217,655 million to R$6,239,713 million, reflecting valuation allowance totaling R$6,022,058 recognized for the companies that, as at December 31, 2015, do not expect to generate sufficient future taxable profits, based on consistent assumptions and timing used in the analysis of the potential impairment of long-lived assets and goodwill, against which tax assets could be offset. Most of our deferred tax assets have been reduced by a valuation allowance to the amount supported by reversing taxable temporary difference. The deferred tax assets not offset by valuation allowance are dependent upon the generation of future pretax income in certain of our tax-paying components in Brazil that have a history of profitability and an expectation of continued profitability. Management believes it is more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets that are not subject to the valuation allowance. However, deferred income tax assets can be reduced in the near term if estimates of future taxable income during the carryforward period are reduced. The net changed in valuation allowance in 2014 was R$217,655. No valuation allowance was recorded prior to 2014. The tax loss carryfowards of approximately R$12,159,935, corresponding to R$4,134,378 million of deferred tax assets, do not expire, and may be carried forward indefinitely. (v) Refer mainly to prior years’ prepaid income tax and social contribution that will be offset against federal taxes payable. |
Summary of Movements in Deferred Income Tax | Movements in deferred income tax and social contribution Balance in Recognized in deferred tax income/ expenses Other comprehensive income Other Balance in 2015 Deferred tax assets arising on: Temporary differences Contingencies 1,668,750 (129,407 ) 1,539,343 Allowance for doubtful accounts 592,279 66,591 658,870 Profit sharing 86,534 (22,291 ) 64,243 Foreign exchange differences 556,389 1,221,972 1,778,361 Merged goodwill (i) 1,605,513 (164,517 ) 982,767 2,423,763 Hedge accounting (ii) (63,695 ) 271,303 207,608 Other temporary items (341,015 ) (89,489 ) 67,514 (362,990 ) Tax loss carryforwards Income tax loss carryforwards 2,513,846 731,485 (234,122 ) 3,011,209 Social contribution carryforwards 934,093 273,339 (84,263 ) 1,123,169 Total - deferred taxes assets 7,552,694 1,887,683 271,303 731,896 10,443,576 Business combinations – other intangibles (3,464,404 ) 416,572 (3,047,832 ) Provisions for pension funds (ii) (176,397 ) (68,500 ) (54,677 ) (299,574 ) Total deferred tax liabilities (3,640,801 ) 348,072 (54,677 ) (3,347,406 ) Valuation allowance (217,655 ) (4,755,151 ) (216,626 ) (1,050,281 ) (6,239,713 ) Total net deferred tax 3,694,238 (2,519,396 ) (318,385 ) 856,457 (i) As a result of the merger of TmarPart with and into Oi on September 1, 2015, the Company recognized the income tax and social contribution benefit arising on the utilization of goodwill paid on the acquisition of interests in the Company in 2008-2011, recognized by the companies merged with and into TmarPart and by TmarPart merged with and into the Company, which was based on the Company’s expected future earnings. (ii) Please see statements of comprehensive income for impacts attributed to other comprehensive income items as well as reclassification to earnings. |
OTHER TAXES (Tables)
OTHER TAXES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | ASSETS 2015 2014 Recoverable State VAT (ICMS) (i) 1,285,800 1,512,543 Taxes on revenue (PIS and COFINS) 200,029 181,772 Other 97,056 101,851 Total 1,582,885 1,796,166 Current 922,986 1,054,255 Non-current 659,899 741,911 LIABILITIES 2015 2014 State VAT (ICMS) 759,922 709,126 ICMS Agreement No. 69/1998 33,998 80,287 Taxes on revenue (PIS and COFINS) 668,888 664,278 FUST/FUNTTEL/broadcasting fees 861,212 807,576 Other 153,968 281,059 Total 2,477,988 2,542,326 Current 1,553,651 1,667,599 Non-current 924,337 874,727 (i) Recoverable ICMS arises mostly from prepaid taxes and credits claimed on purchases of property, plant and equipment, which can be offset against ICMS payable within 48 months, pursuant to Supplementary Law 102/2000. |
JUDICIAL DEPOSITS (Tables)
JUDICIAL DEPOSITS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Banking and Thrift [Abstract] | |
Judicial deposits transactions | 2015 2014 Civil 9,459,735 8,919,658 Tax 2,548,720 2,466,187 Labor 2,368,902 2,007,822 Total 14,377,357 13,393,667 Current 1,258,227 1,133,639 Non-current 13,119,130 12,260,028 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Schedule of Investments [Abstract] | |
Investments | 2015 2014 Joint venture 63,837 74,803 Investments in associates 39,003 21,558 Tax incentives, net of allowances for losses 31,579 31,579 Other investments 20,471 20,471 Total 154,890 148,411 |
Summary of the movements in investment balances | Summary of the movements in investment balances Balance at January 1, 2014 173,640 Share of profits of subsidiaries (5,881 ) Subsidiaries’ dividends and interest on capital (4,968 ) Other (14,380 ) Balance in 2014 148,411 Share of profits of subsidiaries (21,883 ) Associates’ share of other comprehensive income 11,266 Other 17,096 Balance in 2015 154,890 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant And Equipment | Works in progress Automatic switching equipment Transmission and other equipment (i) Infrastructure Buildings Other assets Total Cost of PP&E (gross amount) Balance at Jan 1, 2014 4,569,682 19,476,331 45,332,907 26,991,988 3,598,183 5,201,130 105,170,221 Acquisition of investments - PT Portugal 452,844 6,004,681 4,537,199 16,357,177 2,957,154 9,693,740 40,002,795 Additions 3,029,820 63,899 997,941 308,985 92,788 271,954 4,765,387 Write-offs (2,083 ) (4,595 ) (75,547 ) (105,159 ) (2,146 ) (8,662 ) (198,192 ) Transfers (4,944,777 ) 317,773 6,045,939 (1,711,939 ) 592,592 (368,441 ) (68,853 ) Foreign exchange differences 20,468 288,829 255,552 785,557 148,022 469,466 1,967,894 Transfers to assets held for sale (468,545 ) (6,338,824 ) (4,900,950 ) (17,171,247 ) (2,995,379 ) (10,373,620 ) (42,248,565 ) Balance in 2014 2,657,409 19,808,094 52,193,041 25,455,362 4,391,214 4,885,567 109,390,687 Additions 2,893,198 14,274 270,031 15,792 185,588 243,459 3,622,342 Write-offs (4,737 ) (68,650 ) (521,106 ) (80,208 ) (15,659 ) (690,360 ) Transfers (3,894,026 ) 70,070 1,992,540 1,502,411 (209,257 ) 538,262 Other 135 780 18,370 19,285 Balance in 2015 1,656,581 19,887,701 54,387,097 26,453,239 4,287,337 5,669,999 112,341,954 Accumulated depreciation Balance at Jan 1, 2014 (17,075,110 ) (34,307,252 ) (21,505,346 ) (2,568,768 ) (3,988,687 ) (79,445,163 ) Acquisition of investments - PT Portugal (5,685,512 ) (3,169,003 ) (11,029,655 ) (1,238,292 ) (7,840,705 ) (28,963,167 ) Depreciation expenses (458,367 ) (2,700,926 ) (774,053 ) (189,874 ) (585,636 ) (4,708,856 ) Write-offs 3,521 61,653 51,428 (5,016 ) 7,921 119,507 Transfers (3,027 ) (2,132,253 ) 2,022,793 351,649 (145,499 ) 93,663 Foreign exchange differences (275,108 ) (168,315 ) (534,544 ) (63,973 ) (393,646 ) (1,435,586 ) Transfers to assets held for sale 6,032,368 3,559,523 11,706,376 1,273,000 8,621,957 31,193,224 Balance in 2014 (17,461,235 ) (38,856,573 ) (20,063,001 ) (2,441,274 ) (4,324,295 ) (83,146,378 ) Depreciation expenses (399,628 ) (2,225,984 ) (1,048,933 ) (107,140 ) (253,892 ) (4,035,577 ) Write-offs 3,496 66,245 519,546 63,234 14,433 666,954 Transfers (29,376 ) 94,258 (5,608 ) 53,913 (113,187 ) Other (109 ) (169 ) 0 (8,854 ) (9,132 ) Balance in 2015 (17,886,743 ) (40,922,163 ) (20,598,165 ) (2,431,267 ) (4,685,795 ) (86,524,133 ) Property, plant and equipment, net Balance in 2014 2,657,409 2,346,859 13,336,468 5,392,361 1,949,940 561,272 26,244,309 Balance in 2015 1,656,581 2,000,958 13,464,934 5,855,074 1,856,070 984,204 25,817,821 Annual depreciation rate (average) 11 % 10 % 8 % 8 % 12 % (i) Transmission and other equipment includes transmission and data communication equipment. |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Goodwill Intangibles in progress Data processing systems Regulatory licenses (i) Customer portfolio Other Total Cost of intangibles (gross amount) Balance at Jan 1, 2014 409,012 184,387 6,657,925 18,994,358 1,588,916 27,834,598 Acquisition of investments - PT Portugal 10,574,704 52,819 575,983 1,656,050 3,215,523 3,091,687 19,166,766 Additions 487,895 248,470 282,688 1,019,053 Write-offs (1,574 ) (15,031 ) (16,605 ) Transfers (519,904 ) 451,615 36,401 (31,888 ) Foreign exchange differences 507,532 1,256 44,200 78,963 153,469 124,238 909,658 Transfers to assets held for sale (11,082,236 ) (48,161 ) (667,884 ) (1,736,767 ) (3,368,992 ) (3,291,736 ) (20,195,776 ) Balance in 2014 409,012 156,718 7,310,309 18,992,604 1,817,163 28,685,806 Additions 438,445 136,982 51,331 626,758 Transfers (469,322 ) 459,078 10,244 0 Other 92,453 1,382 93,835 Balance in 2015 501,465 125,841 7,907,751 18,992,604 1,878,738 29,406,399 Accumulated amortization 0 Balance at Jan 1, 2014 (5,348,057 ) (6,677,334 ) (1,143,075 ) (13,168,466 ) Acquisition of investments - PT Portugal (428,721 ) (514,850 ) (2,155,564 ) (3,099,135 ) Amortization expenses (571,298 ) (1,210,359 ) (169,982 ) (424,030 ) (2,375,669 ) Write-offs 11,673 0 26,373 38,046 Transfers (28,171 ) (26,246 ) (7,970 ) (89,734 ) (152,121 ) Foreign exchange differences (260 ) 260 Transfers to assets held for sale 489,838 578,878 177,952 2,378,692 3,625,360 Balance in 2014 (5,874,996 ) (7,849,911 ) (1,407,078 ) (15,131,985 ) Amortization expenses (662,068 ) (1,137,568 ) (191,901 ) (1,991,537 ) Other (1,276 ) (1,276 ) Balance in 2015 (6,538,340 ) (8,987,479 ) (1,598,979 ) (17,124,798 ) Intangible assets, net Balance in 2014 409,012 156,718 1,435,313 11,142,693 410,085 13,553,821 Subtotal 2015 501,465 125,841 1,369,411 10,005,125 279,759 12,281,601 Impairment Losses (501,465 ) (501,465 ) Balance in 2015 125,841 1,369,411 10,005,125 279,759 11,780,136 Annual amortization rate (average) 20 % 9 % 16 % (i) Includes mainly the fair value of intangible assets related to purchase of control of BrT (now Oi, S.A.). |
TRADE PAYABLES (Tables)
TRADE PAYABLES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Payables and Accruals [Abstract] | |
Schedule of Trade Payables | 2015 2014 Infrastructure, network and plant maintenance materials 1,282,493 1,708,777 Services 3,059,394 1,985,629 Rental of polls and rights-of-way 372,103 445,642 Other 321,803 219,737 Total 5,035,793 4,359,785 |
LOANS AND FINANCING (Tables)
LOANS AND FINANCING (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Borrowings and financing by type | Borrowings and financing by type 2015 2014 Maturity (principal and interest) TIR % Senior notes 38,670,111 12,737,364 Local currency 1,090,716 1,136,801 Dec 2015 to Sep 2016 11.62 Foreign currency (i) 37,579,395 11,600,563 Dec 2015 to Feb 2022 15.24 Financial institutions 17,540,795 15,778,442 CCB – Bank Credit Note 2,416,314 4,503,810 Dec 2015 to Jan 2028 12.08 Certificates of Real Estate Receivables (CRI) 1,397,504 1,496,674 Dec 2015 to Aug 2022 14.10 Development Banks and Export Credit Agencies 10,986,710 9,777,958 Dec 2015 to Dec 2033 12.28 Revolver credit facility 2,740,267 Dec 2015 to Oct 2016 21.65 Public debentures 4,144,760 7,807,389 Dec 2015 to Jul 2021 11.82 Subtotal 60,355,666 36,323,195 Incurred debt issuance cost (498,249 ) (473,800 ) Total 59,857,417 35,849,395 Current 11,809,598 4,463,728 Non-current 48,047,819 31,385,667 (i) On June 2, 2015, PT Portugal was sold to Altice S.A. As part of the PT Portugal sale process, the debt of PTIF previously classified as liabilities associated to held-for-sale assets remained with Oi, together with cash in similar amount, and was reclassified to the Company’s debt. The original debt consists basically of EMTN notes issued, maturing in 2016-2025. |
Breakdown of debt by currency | Breakdown of the debt by currency 2015 2014 Euro 24,221,508 2,412,691 US dollar 22,713,644 12,368,551 Brazilian reais 12,922,265 21,068,153 Total 59,857,417 35,849,395 |
Breakdown of debt by index | Breakdown of the debt by index 2015 2014 Fixed rate 39,892,444 14,146,444 LIBOR 8,812,005 2,762,046 CDI 6,347,119 9,811,490 TJLP 3,148,581 5,149,392 IPCA 1,475,381 3,798,431 INPC 181,887 181,592 Total 59,857,417 35,849,395 |
Schedule of maturity debt and debt issuance costs allocation | Maturity schedule of the debt and debt issuance costs allocation schedule Debt 2016 11,927,129 2017 8,495,856 2018 6,532,989 2019 7,072,157 2020 14,563,635 2021 and following years 11,763,900 Total 60,355,666 |
DERIVATIVE FINANCIAL INSTRUME53
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives Financial Instruments | 2015 2014 Assets Currency swaps 6,805,084 2,871,904 Interest rate swaps 445,740 196,017 Non-deliverable forwards (NDFs) 102,329 153,560 Options 33,550 Total 7,386,703 3,221,481 Current 606,387 340,558 Non-current 6,780,316 2,880,923 Liabilities Currency swaps 1,197,157 413,573 Interest rate swaps 594,433 241,138 Non-deliverable forwards (NDFs) 686,488 12,211 Options 32,265 Total 2,510,343 666,922 Current 1,988,948 523,951 Non-current 521,395 142,971 |
LICENSES AND CONCESSIONS PAYA54
LICENSES AND CONCESSIONS PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Contractors [Abstract] | |
Schedule of Licenses and Concessions Payable | 2015 2014 SMP 905,601 1,238,209 STFC concessions 12,936 123,731 Total 918,537 1,361,940 Current 911,930 675,965 Non-current 6,607 685,975 |
Future of Licenses And Concessions | Licenses and concessions payable corresponds to the amounts payable to ANATEL for the radiofrequency concessions and the licenses to provide the SMP services, and STFC service concessions, obtained at public auctions. The payment schedule is as follows: 2016 911,930 2017 3,147 2018 3,147 2019 313 Total 918,537 |
TAX FINANCING PROGRAM (Tables)
TAX FINANCING PROGRAM (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Text Block [Abstract] | |
Summary of Outstanding Balance of Tax Debt Refinancing Program | The outstanding balance of the Tax Debt Refinancing Program is broken down as follows: 2015 2014 Law 11941/09 and Law 12865/2013 tax financing program 791,696 983,904 REFIS II - PAES 3,392 6,326 Total 795,088 990,230 Current 78,432 94,041 Non-current 716,656 896,189 |
Schedule of Components of Tax Debt Refinancing Program | The amounts of the tax refinancing program created under Law 11941/2009, divided into principal, fine and interest, which include the debt declared at the time the deadline to join the program was reopened as provided for by Law 12865/2013 and Law 12996/2014, are broken down as follows: 2015 2014 Principal Fines Interest Total Total Tax on revenue (COFINS) 176,567 6,762 203,899 387,228 563,846 Income tax 42,576 4,201 54,120 100,897 119,447 Tax on revenue (PIS) 64,756 1,266 38,116 104,138 102,598 Social security (INSS – SAT) 527 2,675 6,679 9,881 13,852 Social contribution 10,414 1,362 13,875 25,651 30,985 Tax on banking transactions (CPMF) 19,196 2,156 26,959 48,311 39,717 Other 44,916 5,238 68,828 118,982 119,785 Total 358,952 23,660 412,476 795,088 990,230 |
Schedule of Future Payment of Tax Financing Program | The payment schedule is as follows: 2016 78,432 2017 90,010 2018 90,010 2019 90,010 2020 90,010 2021 to 2023 270,030 2024 to 2025 86,586 Total 795,088 |
CONTINGENCIES (Tables)
CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Contingencies Broken Down | Broken down as follows: Type 2015 2014 Labor (i) Overtime 329,510 471,506 (ii) Sundry premiums 110,664 131,963 (iii) Indemnities 99,607 152,113 (iv) Stability/reintegration 97,783 126,070 (v) Additional post-retirement benefits 70,942 83,417 (vi) Salary differences and related effects 38,013 52,852 (vii) Lawyer/expert fees 25,291 29,382 (viii) Severance pay 15,016 20,235 (ix) Labor fines 10,275 15,562 (x) Employment relationship 6,967 5,717 (xi) Severance Pay Fund (FGTS) 6,694 9,359 (xii) Joint liability 610 1,581 (xiii) Other claims 38,105 55,267 Total 849,477 1,155,024 Tax (i) State VAT (ICMS) 308,144 363,025 (ii) Tax on services (ISS) 71,201 71,666 (iii) INSS (joint liability, fees, and severance pay) 29,394 31,735 (iv) Tax on net income (ILL) 6,882 20,691 (v) Other claims 76,736 45,504 Total 492,357 532,621 Civil (i) Corporate 1,111,742 1,549,525 (ii) ANATEL 1,148,621 1,104,163 (iii) Small claims courts 361,474 282,209 (iv) Other claims 471,295 508,226 Total 3,093,132 3,444,123 Total provisions 4,434,966 5,131,768 Current 1,020,994 1,058,521 Non-current 3,413,972 4,073,247 |
Summary of Breakdown of Contingent Liabilities with Possible Unfavorable Outcome, Not recognized in Accounting | The breakdown of contingent liabilities with a possible unfavorable outcome and, therefore, not recognized in accounting, is as follows: 2015 2014 Labor 779,776 1,082,677 Tax 24,047,529 21,059,009 Civil 1,238,279 1,146,745 Total 26,065,584 23,288,431 |
Summary of Movements in Provision Balances | Summary of movements in provision balances Labor Tax Civil Total Balance at Jan 1, 2014 1,142,274 640,372 3,833,671 5,616,317 Acquisition of investments - PT Portugal 7,471 86,198 48,040 141,709 Inflation adjustment 147,825 (29,680 ) 115,131 233,276 Additions/(reversals) 116,230 13,895 340,472 470,597 Write-offs for payment/terminations (250,830 ) (82,593 ) (848,190 ) (1,181,613 ) Foreign exchange differences 5 69 36 110 Liabilities on held-for-sale assets (7,951 ) (95,640 ) (45,037 ) (148,628 ) Balance in 2014 1,155,024 532,621 3,444,123 5,131,768 Merger of TmarPart and subsidiaries 6,987 6,130 785 13,902 Inflation adjustment (15,016 ) 33,053 158,260 176,297 Additions/(reversals) (113,636 ) 44,325 635,928 566,617 Write-offs for payment/terminations (183,882 ) (123,772 ) (1,145,964 ) (1,453,618 ) Balance in 2015 849,477 492,357 3,093,132 4,434,966 |
OTHER PAYABLES (Tables)
OTHER PAYABLES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Other Liabilities Disclosure [Abstract] | |
Other Payables | 2015 2014 Unearned revenues (i) 2,039,183 2,475,391 Advances from customers 767,905 635,681 Provisions for indemnities payable (Note 26) 668,534 Payable for the acquisition of equity interest 382,230 408,978 Consignation to third parties 43,160 43,062 Provision for asset decommissioning 15,437 14,835 Other 356,088 46,328 Total 4,272,537 3,624,275 Current 1,219,624 1,021,719 Non-current 3,052,913 2,602,556 (i) Primarily refers (1) amounts received in advance for the assignment of the right to the commercial operation and use of infrastructure assets that are recognized in revenues over the effective period of the underlying agreements and (2) prepaid mobile telephony services that are recognized in revenue when the customers use the services. |
EQUITY (Tables)
EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Share Capital | Subscribed and paid-in capital is R$21,438,374 (R$21,438,220 at December 31, 2014), represented by the following no-par value shares: Number of shares (in thousands) 2015 2014 Total capital in shares Common shares 668,034 286,155 Preferred shares 157,727 572,317 Total 825,761 858,472 Treasury shares Common shares 148,282 8,425 Preferred shares 1,812 7,281 Total 150,094 15,706 Outstanding shares Common shares 519,752 277,730 Preferred shares 155,915 565,036 Total outstanding shares 675,667 842,766 |
Treasury shares | The treasury shares position corresponding to items (i), (ii) and (iii) referred to above, not taking into consideration item (iv) because this refers to a reclassification derived from cross-shareholdings, is as follows: Common Amount Preferred Amount Balance in 2013 84,251 880,378 72,808 1,224,146 Reverse share split (75,826 ) (65,527 ) Balance in 2014 8,425 880,378 7,281 1,224,146 Share exchange 47,435 1,054,513 94,870 2,109,026 Share conversion 92,422 3,274,047 (100,339 ) (3,274,047 ) Balance in 2015 148,282 5,208,938 1,812 59,125 (*) Number of shares in thousands Historical cost in purchase of treasury shares (R$ per share) 2015 2014 Weighted average 13.40 13.40 Minimum 3.79 3.79 Maximum 15.25 15.25 |
LIABILITIES FOR PENSION BENEF59
LIABILITIES FOR PENSION BENEFITS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Postemployment Benefits [Abstract] | |
Summary of Existing Pension Plans | The Company and its subsidiaries sponsor retirement benefit plans for their employees, provided that they elect to be part of such plan. The table below shows the existing pension plans at December 31, 2015. Benefit plans Sponsors Manager TCSPREV Oi, Oi Móvel, BrT Multimídia and Oi Internet FATL BrTPREV Oi, Oi Móvel, BrT Multimídia and Oi Internet FATL TelemarPrev Oi, TMAR, Oi Móvel and Oi Internet FATL PBS-Telemar TMAR FATL PAMEC Oi Oi PBS-A TMAR and Oi Sistel PBS-TNCP Oi Móvel Sistel CELPREV Oi Móvel Sistel PAMA Oi and TMAR Sistel |
Summary of of Breakdown Pension Assets and Liabilities | The unfunded status are as follows: 2015 2014 BrTPREV plan 399,754 473,554 PAMEC plan 2,585 2,981 Financial obligations - BrTPREV plan (i) 141,681 Total 544,020 476,535 Current 144,589 129,662 Non-current 399,431 346,873 (i) Represented by the agreement of financial obligations, entered into by the Company and Fundação Atlântico intended for the payment of the mathematical provision without coverage by the plan’s assets. This obligation represents the additional commitment between the provision recognized pursuant to the actuarial assumptions and the financial obligations agreement calculated based on the laws applicable to close-end pension funds, regulated by PREVIC. These assets are broken down as follows: 2015 2014 TCSPREV plan 1,061,456 932,403 TelemarPrev plan 482,938 237,308 PBS – Telemar plan 33,477 10,104 Other (47,924 ) (74,734 ) Total 1,529,947 1,105,081 Current 753 1,744 Non-current 1,529,194 1,103,337 |
Schedule of Change in Projected Benefit Obligation | Changes in the actuarial obligations, fair value of assets and amounts recognized in the balance sheet 2015 2014 TCSPREV BrTPREV TelemarPrev PBS- Telemar PAMEC TCSPREV BrTPREV TelemarPrev PBS- Telemar PAMEC Projected benefit obligation at the beginning of the year 502,433 2,023,849 2,885,744 247,833 2,981 481,055 1,941,701 2,722,980 235,884 3,418 Service cost 586 142 2,785 80 797 230 3,592 121 Interest cost 57,066 228,738 328,289 28,089 345 54,689 219,630 310,467 26,755 396 Benefits paid (44,535 ) (177,696 ) (219,465 ) (19,942 ) (122 ) (36,569 ) (167,661 ) (216,394 ) (18,507 ) (110 ) Participant’s contributions 43 52 Changes in actuarial assumptions (18,420 ) (74,280 ) (204,806 ) (11,956 ) (619 ) 2,461 29,949 65,099 3,528 (723 ) Projected benefit obligation at the end of the year 497,130 2,000,753 2,792,547 244,147 2,585 502,433 2,023,849 2,885,744 247,833 2,981 2015 2014 TCSPREV BrTPREV TelemarPrev PBS- Telemar PAMEC TCSPREV BrTPREV TelemarPrev PBS- Telemar PAMEC Fair value of plan assets at the beginning of the year 1,434,836 1,550,295 3,123,052 257,937 1,442,657 1,301,556 3,204,535 264,224 Actual return on plan assets 168,285 88,465 371,898 39,516 28,748 293,096 134,911 12,091 Company’s contributions 139,935 71 123,304 77 Participant’s contributions 42 52 Benefits paid (44,535 ) (177,696 ) (219,465 ) (19,942 ) (36,569 ) (167,661 ) (216,394 ) (18,507 ) Fair value of plan assets at the end of the year 1,558,586 1,600,999 3,275,485 277,624 1,434,836 1,550,295 3,123,052 257,937 2015 2014 TCSPREV BrTPREV TelemarPrev PBS-Telemar PAMEC TCSPREV BrTPREV TelemarPrev PBS- Telemar PAMEC Funded (unfunded) status of plan (1,061,456 ) 399,754 (482,938 ) (33,477 ) 2,585 (932,403 ) 473,554 (237,308 ) (10,104 ) 2,981 |
Schedule of Net Periodic Defined Beneift Pension Cost | Net periodic defined benefit pension cost for the years ended December 31, 2015, 2014 and 2013 includes the following: 2015 TCSPREV BrTPREV TelemarPrev PBS-Telemar PAMEC Net service cost 586 142 2,785 80 Interest cost 57,066 228,738 328,289 28,089 345 Expected return on plan assets (162,701 ) (180,363 ) (356,313 ) (29,293 ) Amortization of net actuarial losses (gains) 47,438 Amortization of prior year service costs (gains) (5,636 ) 1,552 Amortization of initial transition obligation (4,203 ) Net periodic pension cost (benefit) (110,684 ) 50,069 17,996 (1,124 ) 345 2014 TCSPREV BrTPREV TelemarPrev PBS-Telemar PAMEC Net service cost 797 230 3,592 121 Interest cost 54,689 219,630 310,467 26,755 396 Expected return on plan assets (150,078 ) (151,143 ) (367,435 ) (30,117 ) Amortization of net actuarial losses (gains) (5,831 ) 6,940 9,131 Amortization of prior year service costs (gains) (5,636 ) 1,552 Amortization of initial transition obligation (4,202 ) Net periodic pension cost (benefit) (106,059 ) 77,209 (48,447 ) (3,241 ) 396 2013 TCSPREV BrTPREV TelemarPrev PBS-Telemar PAMEC Net service cost 1,837 782 12,206 235 Interest cost 49,310 194,520 282,508 23,839 427 Expected return on plan assets (145,230 ) (130,340 ) (305,649 ) (27,942 ) Amortization of net actuarial losses (gains) (19,443 ) 23,698 30,174 Amortization of prior year service costs (gains) (5,636 ) 1,552 Amortization of initial transition obligation (4,203 ) Net periodic pension cost (benefit) (119,162 ) 90,212 15,036 (3,868 ) 427 The net periodic pension cost expected to be recognized in 2016 are as follows: 2016 TCSPREV BrTPREV TelemarPrev PBS-Telemar PAMEC Net service cost 551 154 2,042 78 Interest cost 62,214 249,319 350,701 30,475 330 Expected return on plan assets (193,747 ) (191,438 ) (381,993 ) (32,876 ) Amortization of net actuarial losses (gains) 4,380 Amortization of prior year service costs (gains) (5,636 ) 1,552 Amortization of initial transition obligation Net periodic pension cost (benefit) (136,618 ) 59,587 (24,870 ) (2,323 ) 330 |
Summary of Acuarial Assumption | The following actuarial assumptions were used to determine the actuarial present value of the Company’s projected benefit obligation: 2015 BrTPREV TelemarPrev and and TCSPREV PAMEC PBS-Telemar Discount rate for determining projected benefit obligations 13.10 % 13.10 % 13.10 % Expected long-term rate of return on plan assets 13.10 % 13.10 % 13.10 % Annual salary increases 6.45 % 7.08 % 5.50 % Rate of compensation increase 5.50 % 5.50 % 5.50 % Inflation rate assumption used in the above 5.50 % 5.50 % 5.50 % 2014 BrTPREV TelemarPrev and and TCSPREV PAMEC PBS-Telemar Discount rate for determining projected benefit obligations 11.83 % 11.83 % 11.83 % Expected long-term rate of return on plan assets 11.83 % 11.83 % 11.83 % Annual salary increases 7.93 % 7.93 % 7.93 % Rate of compensation increase 5.50 % 5.50 % 5.50 % Inflation rate assumption used in the above 5.50 % 5.50 % 5.50 % 2013 BrTPREV TelemarPrev and and PBS- TCSPREV PAMEC Telemar Discount rate for determining projected benefit obligations 11.83 % 11.83 % 11.83 % Expected long-term rate of return on plan assets 11.83 % 11.83 % 11.83 % Annual salary increases 7.93 % 7.93 % 7.93 % Rate of compensation increase 5.50 % 5.50 % 5.50 % Inflation rate assumption used in the above 5.50 % 5.50 % 5.50 % |
Average Ceiling of Investment Permitted for Pension Funds | The average ceilings set for the different types of investment permitted for pension funds are as follows: ASSET SEGMENT TCSPREV BrTPREV PBS- Telemar TelemarPrev Fixed income 100.00 % 100.00 % 100.00 % 100.00 % Variable income 17.00 % 17.00 % 10.00 % 17.00 % Structured investments 20.00 % 20.00 % 20.00 % 20.00 % Investments abroad 5.00 % 5.00 % 2.00 % 5.00 % Real estate 8.00 % 8.00 % 8.00 % 8.00 % Loans to participants 15.00 % 15.00 % 15.00 % 15.00 % The allocation of plan assets as at December 31, 2015 is as follows: ASSET SEGMENT TCSPREV BrTPREV PBS- Telemar TelemarPrev Fixed income 84.25 % 92.17 % 88.01 % 91.40 % Variable income 3.25 % 1.32 % 1.78 % 2.21 % Equity securities 11.45 % 5.21 % 9.12 % 5.08 % Real estate 0.72 % 0.69 % 0.74 % 0.70 % Loans to participants 0.33 % 0.62 % 0.35 % 0.61 % Total 100.00 % 100.00 % 100.00 % 100.00 % |
Estimated Future Benefit Payments | The estimated benefit payments, which reflect future services, as appropriate, are expected to be paid as follows (unaudited): TCSPREV BrTPREV PBS-Telemar TelemarPrev 2016 44,429 195,106 23,028 230,887 2017 46,725 203,295 24,131 244,260 2018 49,143 211,461 25,367 258,614 2019 51,562 219,708 26,650 272,844 2020 54,040 228,076 27,866 287,623 2021 until 2025 308,753 1,261,909 157,295 1,684,353 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Schedule of Segment Report Information | The financial information of this reportable segment for the years ended December 31, 2015, 2014 and 2013 is as follows: 2015 2014 2013 Residential 9,779,218 9,995,205 10,302,910 Personal mobility 8,430,890 9,011,200 9,289,893 SMEs/Corporate 7,973,893 8,311,458 8,454,923 Other services and businesses 257,090 295,297 374,421 Net operating revenue 26,441,091 27,613,160 28,422,147 Operating expenses Depreciation and amortization (5,996,157 ) (5,630,238 ) (5,691,824 ) Interconnection (1,757,277 ) (2,674,915 ) (3,965,623 ) Personnel (2,618,139 ) (2,749,404 ) (2,534,222 ) Third-party services (6,154,900 ) (6,163,447 ) (6,119,733 ) Network maintenance services (1,860,646 ) (1,906,789 ) (2,328,140 ) Handset and other costs (226,826 ) (702,379 ) (515,377 ) Advertising and publicity (379,537 ) (656,487 ) (556,500 ) Rentals and Insurance (3,553,881 ) (3,095,667 ) (2,119,684 ) Provisions/reversals (860,166 ) (779,314 ) (656,849 ) Allowance for doubtful accounts (692,935 ) (628,605 ) (922,779 ) Impairment losses (501,465 ) Taxes and other expenses (902,507 ) (1,440,968 ) (1,397,982 ) Other operating income, net 277,954 3,206,943 2,369,555 OPERATING INCOME BEFORE FINANCIAL INCOME (EXPENSES) AND TAXES 1,214,609 4,391,890 3,982,989 FINANCIAL INCOME (EXPENSES) Financial income 4,493,042 1,332,723 1,375,217 Financial expenses (11,013,939 ) (5,870,193 ) (4,677,173 ) PRETAX INCOME (5,306,288 ) (145,580 ) 681,033 Income tax and social contribution (3,202,817 ) (615,406 ) (76,610 ) LOSS FROM CONTINUING OPERATIONS (8,509,105 ) (760,986 ) 604,423 |
Reconciliation of Revenue of the segment and Total Consolidated Revenue Information | In the years ended December 31, 2015, 2014 and 2013, the reconciliation of the revenue of the segment Telecommunications in Brazil and total consolidated revenue is as follows: 2015 2014 2013 Net operating revenue Revenue related to the reportable segment 26,441,091 27,613,160 28,422,147 Revenue related to other businesses (i) 912,674 633,939 Consolidated net operating revenue 27,353,765 28,247,099 28,422,147 (i) In 2014 the Africa and Timor business were consolidated after May 1. |
Reconciliation Between the Profit (loss) Before Financial Income (expenses) and Taxes of the segment Telecommunications in Brazil and Consolidated Profit (loss) Before Financial Income (expenses) and Taxes Information | In the years ended December 31, 2015, 2014 and 2013, the reconciliation between the profit (loss) before taxes of the segment telecommunications in Brazil and the consolidated profit (loss) before taxes is as follows: 2015 2014 2013 Profit (loss) before taxes Telecommunications in Brazil (5,306,288 ) (145,580 ) 681,033 Other businesses (i) (18,682 ) 209,867 Consolidated income before taxes (5,324,970 ) 64,287 681,033 (i) In 2014 the Africa and Timor business were consolidated after May 1. |
Total Assets, Liabilities and Property, Plant and Equipment and Intangible Assets Per Geographic Market | Total assets, liabilities and property, plant and equipment and intangible assets per geographic market as at December 31, 2015 and 2014 are as follows: 2015 Total assets Total Property, plant and equipment assets Intangible assets Capital expenditures on property, plant and equipment and intangible assets Brazil 91,648,303 81,943,161 25,817,821 11,780,136 3,565,454 Other, primarily Africa 7,686,298 745,000 466,049 943,534 116,030 2014 Total assets Total liabilities Property, plant and equipment assets Intangible assets Capital expenditures on property, plant and equipment and intangible assets Brazil 103,098,596 82,736,984 26,244,309 13,553,821 5,259,714 Other, primarily Africa 7,642,738 851,273 506,347 997,015 110,637 |
RELATED-PARTY TRANSACTIONS (Tab
RELATED-PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Transactions with Joint Venture, Associates, and Unconsolidated Entities | Transactions with joint venture, associates, and unconsolidated entities 2015 2014 Accounts receivable and other assets 4,916 191,159 PT-ACS 15,114 Fundação PT 7,387 Sportinvest Multimédia 105,492 Siresp 40 Fibroglobal 48,134 Yunit 7,454 Contax 3,307 Other entities 4,916 4,231 2015 2014 Accounts payable and other liabilities 53,246 68,259 PT-ACS 599 Fundação PT 2 Sportinvest Multimédia 291 Siresp 6 Fibroglobal 9,564 Yunit 669 Contax 41,832 TODO 5,587 Ability 7 Veotex 345 Hispamar 52,425 9,357 Other entities 821 2015 2014 Revenue Revenue from services rendered 67 31,873 Contax 30,754 TODO 1,026 Other entities 67 93 2015 2014 Costs/expenses Operating costs and expenses (240,511 ) (232,176 ) PT-ACS (3,887 ) Sportinvest Multimédia (669 ) Fibroglobal (10,974 ) Veotex (10,221 ) TODO (22,984 ) Hispamar (207,366 ) (152,041 ) Other entities (33,145 ) (31,400 ) |
HELD-FOR-SALE ASSETS AND DISC62
HELD-FOR-SALE ASSETS AND DISCONTINUED OPERATIONS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Loss on Divesture of Discontinued Operations | With the sale of PT Portugal shares to Altice, the loss on divesture is presented as discontinued operations in a single line of the income statement, as follows: 2015 2014 Allowance for impairment loss at fair value of the PT Portugal investment and divesture-related expenses (3,836,388 ) Loss on sale of PT Portugal and divesture-related expenses (i) (625,464 ) Comprehensive income transferred to the income statement (ii) (225,934 ) Loss for the period of discontinued operations (iii) (15,741 ) (250,061 ) Profit for the period from discontinued operations (iv) (867,139 ) (4,086,449 ) (i) The loss on the sale of PT Portugal includes: (1) the derecognized investment cost that includes goodwill arising on the business combination between the Company and PT less the R$3.8 billion allowance for loss recognized in December 2014, and selling expenses totaling R$1.3 billion; and (2) the R$0.7 billion revenue related to cash proceeds received directly by the Company. The final price is subject to possible post-closing adjustments to be determined in the following months based on changes in the cash, debt, and working capital positions at the closing date. (ii) Refers to the cumulative foreign exchange differences gains totaling R$0.5 billion and actuarial losses from pensions and postretirement benefits plans totaling R$0.7 billion recognized in other comprehensive income, transferred from equity to profit or loss for the year due to divesture. (iii) Refers to PT Portugal’s loss recognized as equity in profits of subsidiaries for 2015 and 2014. (iv) The profit or loss from discontinued operations includes the effect of taxes amounting to R$327,115 (R$92,545 in 2014). |
Assets Held for Sale and Liabilities Associated to Assets Held for Sale | The main components of the assets for held sale and liabilities associated to assets held for sale of the African operations are as follows: Operations in Africa 2015 Held-for-sale assets 7,686,298 Cash, cash equivalents and short-term investments 214,413 Accounts receivable 217,992 Dividends receivable (i) 2,042,191 Available-for-sale financial asset (ii) 3,541,314 Other assets 230,318 Investments 61,425 Property, plant and equipment 466,049 Intangible assets 356,900 Goodwill (iii) 555,696 Liabilities directly associated to assets held for sale 745,000 Borrowings and financing 9,557 Trade payables 85,730 Provisions for pension plans 923 Other liabilities 648,790 Non-controlling interests (*) 1,190,547 Total assets held for sale and liabilities associated to assets held for sale 5,750,751 (*) Represented mainly by the Samba Luxco’s 25% stake in Africatel Holdings, BV and, consequently, in its net assets. PT Portugal operations African operations Total 2014 Held-for-sale assets 26,611,944 7,642,738 34,254,682 Cash, cash equivalents and short-term investments 590,111 170,056 760,167 Accounts receivable 2,270,140 195,690 2,465,830 Dividends receivable (i) 1,948 1,261,826 1,263,774 Available-for-sale financial asset (ii) 4,284,416 4,284,416 Other assets 1,085,751 164,121 1,249,872 Investments 134,272 63,267 197,539 Property, plant and equipment 10,560,140 506,347 11,066,487 Intangible assets 5,271,808 376,441 5,648,249 Goodwill 6,697,774 620,574 7,318,348 Liabilities directly associated to assets held for sale 26,326,949 851,273 27,178,222 Borrowings and financing 18,892,793 83,843 18,976,636 Trade payables 2,260,503 97,600 2,358,103 Provisions for pension plans 3,347,667 997 3,348,664 Other liabilities 1,825,986 668,833 2,494,819 Non-controlling interests 1,509,197 1,509,197 Total assets held for sale and liabilities associated to assets held for sale 284,995 5,282,268 5,567,263 (i) Refers to dividends receivable from Unitel. In 2015, the Company’s recognized dividends not yet received based on the expected recoverable amount and took into account, for this valuation, the existence of lawsuits filed to collect these amounts, the expected favorable decisions on these lawsuits, and the existence of cash at Unitel for the payment of these dividends. The dividends not paid by Unitel to PT Ventures refer to fiscal years 2010, 2011, 2012, and 2013, totaling US$661million; (ii) Refers mainly to the fair value of the indirect interest financial investment of 18.75% of Unitel’s share capital, classified as held for sale. The fair value of this investment at the date of acquisition was estimated based on the valuation made by Banco Santander (Brasil), which used a series of estimates and assumptions, including cash flows forecasts for a four-year period, the choice of a growth rate to extrapolate the cash flows projections, and definition of appropriate discount rates. The Company has the policy of monitoring and periodically updating the main assumptions and material estimates used in the fair value measurement, and also takes into consideration in this assessment possible impacts of actual events related to the investment, notably the lawsuits filed against Unitel and its shareholders in 2015. As at December 31, 2015 and in the context of the updating of assumptions referred to above, the Company determined a fair value of the investment in Unitel of R$3,436 million and recognized in profit or loss a loss of R$408 million. The Company believes that the fair value measured under the Discounted Cash Flows method and using the discount rate assumptions (from 15.5% to 17.5%), foreign exchange rates, and other Angolan official financial indicators, corresponds to the best estimate of the realizable value of the investment in Unitel. (iii) As at December 31, 2015, the Company conducted the annual impairment test of its assets related to the operations in África and recognized a loss on goodwill amounting to R$89,176. |
General Information - Additiona
General Information - Additional Information (Detail) BRL / shares in Units, BRL in Thousands | Sep. 01, 2015BRLshares | May. 05, 2014BRLBRL / sharesshares | Mar. 27, 2014BRL | Apr. 30, 2014BRLshares | Dec. 31, 2015BRL | Dec. 31, 2014BRL | Dec. 31, 2013BRL | May. 05, 2014$ / shares |
General Information Disclosures [Line Items] | ||||||||
Increase in capital | BRL 13,960,000 | BRL 13,217,865 | ||||||
Stock issued during the period, value | BRL 13,959,900 | |||||||
Capital | BRL 21,431,109 | BRL 21,438,374 | 21,438,220 | |||||
Assets | 99,334,601 | 110,741,334 | ||||||
Liabilities | 57,083,130 | 41,008,205 | ||||||
Shares offered for conversion | shares | 314,250,655 | |||||||
Percentage of shares offered for conversion | 66.84% | |||||||
Net cash (used) generated by operating activities | (1,053,671) | 5,530,569 | BRL 7,035,312 | |||||
Cash and cash equivalents and short-term cash investments | 16,700,000 | |||||||
Long term debt | 59,857,417 | BRL 35,849,395 | ||||||
Contractual obligations and commitments, due 2016 | 19,725,000 | |||||||
Contractual obligations and commitments, due 2017 and 2018 | BRL 30,672,000 | |||||||
PT Participacoes SGPS, S.A. ("PT Participacoes") [Member] | ||||||||
General Information Disclosures [Line Items] | ||||||||
Stakes in former subsidiaries of PT group after sale of shares of PT Portugal | 100.00% | |||||||
Timor Telecom, S.A. ("Timor Telecom") | ||||||||
General Information Disclosures [Line Items] | ||||||||
Stakes in former subsidiaries of PT group after sale of shares of PT Portugal | 100.00% | |||||||
Portugal Telecom International Finance B.V. ("PTIF"[Member] | ||||||||
General Information Disclosures [Line Items] | ||||||||
Stakes in former subsidiaries of PT group after sale of shares of PT Portugal | 100.00% | |||||||
CVTEL B.V. ("CVTEL") | ||||||||
General Information Disclosures [Line Items] | ||||||||
Stakes in former subsidiaries of PT group after sale of shares of PT Portugal | 100.00% | |||||||
Carrigans Finance S.a.r.l. ("Carrigans") | ||||||||
General Information Disclosures [Line Items] | ||||||||
Stakes in former subsidiaries of PT group after sale of shares of PT Portugal | 100.00% | |||||||
TmarPart [Member] | ||||||||
General Information Disclosures [Line Items] | ||||||||
Net assets at book value | BRL 122,412 | |||||||
Goodwill tax benefits | BRL 982,768 | |||||||
PT Portugal SGPS, S.A. ("PT Portugal") | ||||||||
General Information Disclosures [Line Items] | ||||||||
Value of asset received in exchange of shares issued | 5,710,000 | |||||||
Assets | 30,299,000,000 | |||||||
Liabilities | 33,115,000,000 | |||||||
Cash | BRL 13,960,000 | |||||||
Over-Allotment Option [Member] | ||||||||
General Information Disclosures [Line Items] | ||||||||
Stock issued during the period, value | BRL 742,035 | |||||||
Africatel Holding BV ("Africatel") | Unitel S.A. ("Unitel") | ||||||||
General Information Disclosures [Line Items] | ||||||||
Percentage of stake held | 25.00% | |||||||
Africatel Holding BV ("Africatel") | Cabo Verde Telecom, S.A. ("CVT") | ||||||||
General Information Disclosures [Line Items] | ||||||||
Percentage of stake held | 40.00% | |||||||
Common Stock | ||||||||
General Information Disclosures [Line Items] | ||||||||
Issuance of shares | shares | 2,142,279,524 | |||||||
Sale of stock, price per share | BRL / shares | BRL 2.17 | |||||||
Common Stock | American Depositary Shares | ||||||||
General Information Disclosures [Line Items] | ||||||||
Issuance of shares | shares | 396,589,982 | |||||||
Sale of stock, price per share | $ / shares | $ 0.970 | |||||||
Common Stock | Over-Allotment Option [Member] | ||||||||
General Information Disclosures [Line Items] | ||||||||
Issuance of shares | shares | 120,265,046 | |||||||
Preferred Stock | ||||||||
General Information Disclosures [Line Items] | ||||||||
Issuance of shares | shares | 4,284,559,049 | |||||||
Sale of stock, price per share | BRL / shares | BRL 2 | |||||||
Preferred Stock | American Depositary Shares | ||||||||
General Information Disclosures [Line Items] | ||||||||
Issuance of shares | shares | 828,881,795 | |||||||
Sale of stock, price per share | $ / shares | $ 0.894 | |||||||
Preferred Stock | Over-Allotment Option [Member] | ||||||||
General Information Disclosures [Line Items] | ||||||||
Issuance of shares | shares | 240,530,092 |
Significant Accounting Polici64
Significant Accounting Policies - Additional Information (Detail) - Adjustments for New Accounting Principle, Early Adoption [Member] BRL in Thousands | 12 Months Ended |
Dec. 31, 2014BRL | |
Other Assets [Member] | |
Significant Accounting Policies [Line Items] | |
Reclassification due to adoption of new accounting standard | BRL (473,800) |
Loans and Finance Receivables [Member] | |
Significant Accounting Policies [Line Items] | |
Reclassification due to adoption of new accounting standard | 473,800 |
Current Deferred Income Tax Liabilities [Member] | |
Significant Accounting Policies [Line Items] | |
Reclassification due to adoption of new accounting standard | (1,631,155) |
Non Current Deferred Income Tax Liabilities [Member] | |
Significant Accounting Policies [Line Items] | |
Reclassification due to adoption of new accounting standard | BRL 1,631,155 |
Foreign Exchange Rates (Detail)
Foreign Exchange Rates (Detail) | Dec. 31, 2015 | Dec. 31, 2014 |
Closing Rate | Euro | ||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | ||
Foreign exchange rates | 4.2504 | 3.2270 |
Closing Rate | US dollar | ||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | ||
Foreign exchange rates | 3.9048 | 2.6562 |
Closing Rate | Cape Verde, Escudos | ||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | ||
Foreign exchange rates | 0.0390 | 0.0339 |
Closing Rate | Sao Tome and Principe, Dobras | ||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | ||
Foreign exchange rates | 0.000174 | 0.000154 |
Closing Rate | Kenya, Shillings | ||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | ||
Foreign exchange rates | 0.0382 | 0.0339 |
Closing Rate | Namibia, Dollars | ||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | ||
Foreign exchange rates | 0.2510 | 0.2606 |
Closing Rate | Mozambique, Meticais | ||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | ||
Foreign exchange rates | 0.0832 | 0.0838 |
Average Rate | Euro | ||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | ||
Foreign exchange rates | 4.2158 | 3.2525 |
Average Rate | US dollar | ||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | ||
Foreign exchange rates | 3.8711 | 2.6394 |
Average Rate | Cape Verde, Escudos | ||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | ||
Foreign exchange rates | 0.0298 | 0.0287 |
Average Rate | Sao Tome and Principe, Dobras | ||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | ||
Foreign exchange rates | 0.000132 | 0.000131 |
Average Rate | Kenya, Shillings | ||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | ||
Foreign exchange rates | 0.0293 | 0.0268 |
Average Rate | Namibia, Dollars | ||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | ||
Foreign exchange rates | 0.2297 | 0.2169 |
Average Rate | Mozambique, Meticais | ||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | ||
Foreign exchange rates | 0.0767 | 0.0742 |
Financial Assets and Financial
Financial Assets and Financial Liabilities Carried At Fair Value (Detail) - BRL BRL in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | ||
Assets, Carrying amount | |||
Cash and banks | BRL 1,111,840 | BRL 532,285 | |
Cash equivalents | 13,786,223 | 1,916,921 | |
Short-term investments | 1,927,686 | 282,700 | |
Derivative financial instruments | 7,386,703 | 3,221,481 | |
Accounts receivable | [1] | 8,379,719 | 7,455,687 |
Available-for-sale financial asset | 3,541,314 | 4,284,416 | |
Dividends receivable | 2,042,191 | 1,261,826 | |
Liabilities, Carrying amount | |||
Trade payables | [1] | 5,004,833 | 4,331,286 |
Borrowings and financing | [2] | 17,049,280 | 15,335,155 |
Debentures | 4,138,025 | 7,776,876 | |
Senior notes | 38,670,111 | 12,737,364 | |
Derivative financial instruments | 2,510,343 | 666,922 | |
Dividends and interest on capital | 96,433 | 185,138 | |
Licenses and concessions payable | [3] | 918,537 | 1,361,940 |
Tax refinancing program | [3] | 795,088 | 990,230 |
Other payables (payable for the acquisition of equity interest) | [3] | 382,230 | 408,978 |
Assets, Fair value | |||
Cash and banks | 1,111,840 | 532,285 | |
Cash equivalents | 13,786,223 | 1,916,921 | |
Short-term investments | 1,927,686 | 282,700 | |
Derivative financial instruments | 7,386,703 | 3,221,481 | |
Accounts receivable | [1] | 8,379,719 | 7,455,687 |
Available-for-sale financial asset | 3,541,314 | 4,284,416 | |
Dividends receivable | 2,042,191 | 1,261,826 | |
Liabilities, Fair value | |||
Trade payables | [1] | 5,004,833 | 4,331,286 |
Borrowings and financing | [2] | 17,049,280 | 15,335,155 |
Debentures | 4,128,539 | 7,513,867 | |
Senior notes | 22,159,838 | 12,199,092 | |
Derivative financial instruments | 2,510,343 | 666,922 | |
Dividends and interest on capital | 96,433 | 185,138 | |
Licenses and concessions payable | [3] | 918,537 | 1,361,940 |
Tax refinancing program | [3] | 795,088 | 990,230 |
Other payables (payable for the acquisition of equity interest) | [3] | BRL 382,230 | BRL 408,978 |
Cash and Due from Banks | |||
Fair Value Disclosures | |||
Accounting measurement | Fair value | Fair value | |
Cash and Cash Equivalents | |||
Fair Value Disclosures | |||
Accounting measurement | Fair value | Fair value | |
Short-term Investments | |||
Fair Value Disclosures | |||
Accounting measurement | Fair value | Fair value | |
Derivative Financial Instruments, Assets | |||
Fair Value Disclosures | |||
Accounting measurement | Fair value | Fair value | |
Accounts Receivable | |||
Fair Value Disclosures | |||
Accounting measurement | [1] | Amortized cost | Amortized cost |
Available-for-sale Securities | |||
Fair Value Disclosures | |||
Accounting measurement | Fair value | Fair value | |
Dividend Received | |||
Fair Value Disclosures | |||
Accounting measurement | Amortized cost | Amortized cost | |
Accounts Payable | |||
Fair Value Disclosures | |||
Accounting measurement | [1] | Amortized cost | Amortized cost |
Borrowings | |||
Fair Value Disclosures | |||
Accounting measurement | [1] | Amortized cost | Amortized cost |
Debentures | |||
Fair Value Disclosures | |||
Accounting measurement | Amortized cost | Amortized cost | |
Senior Notes | |||
Fair Value Disclosures | |||
Accounting measurement | Amortized cost | Amortized cost | |
Derivative Financial Instruments, Liabilities | |||
Fair Value Disclosures | |||
Accounting measurement | Fair value | Fair value | |
Dividends and Interest on Capital Payable | |||
Fair Value Disclosures | |||
Accounting measurement | Amortized cost | Amortized cost | |
Licenses and Concessions Payable | |||
Fair Value Disclosures | |||
Accounting measurement | [3] | Amortized cost | Amortized cost |
Tax Refinancing Program Liabilities | |||
Fair Value Disclosures | |||
Accounting measurement | [3] | Amortized cost | Amortized cost |
Other Payables | |||
Fair Value Disclosures | |||
Accounting measurement | [3] | Amortized cost | Amortized cost |
[1] | The balances of accounts receivables and trade payables have near terms and, therefore, they are not adjusted to fair value. | ||
[2] | Part of this balance of borrowings and financing with the BNDES and export credit agencies correspond to exclusive markets and, therefore, the fair values of these instruments is similar to their carrying amounts. A portion of the balance of borrowings and financing refers to the bonds issued in the international market, for which is there is a secondary market, and their fair values are different from their carrying amounts. | ||
[3] | The licenses and concessions payable, the tax refinancing program, and other obligations (payable for the acquisition of equity interest) are stated at the amounts that these obligations are expected to be settled and are not adjusted to fair value. |
Schedule of Fair Value Measurem
Schedule of Fair Value Measurement hierarchy (Detail) - BRL BRL in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Assets, Fair value | ||
Cash and banks | BRL 1,111,840 | BRL 532,285 |
Cash equivalents | 13,786,223 | 1,916,921 |
Short-term investments | 1,927,686 | 282,700 |
Derivative financial instruments | 7,386,703 | 3,221,481 |
Available-for-sale financial asset | 3,541,314 | 4,284,416 |
Liabilities | ||
Derivative financial instruments | 2,510,343 | 666,922 |
Level 1 | ||
Assets, Fair value | ||
Cash and banks | 1,111,840 | 532,285 |
Level 2 | ||
Assets, Fair value | ||
Cash equivalents | 13,786,223 | 1,916,921 |
Short-term investments | 1,927,686 | 282,700 |
Derivative financial instruments | 7,386,703 | 3,221,481 |
Liabilities | ||
Derivative financial instruments | 2,510,343 | 666,922 |
Level 3 | ||
Assets, Fair value | ||
Available-for-sale financial asset | BRL 3,541,314 | BRL 4,284,416 |
Financial Instruments and Ris68
Financial Instruments and Risk Analysis - Additional Information (Detail) - BRL BRL in Thousands | 12 Months Ended | ||||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2016 | Jul. 30, 2015 | Apr. 30, 2015 | Jan. 31, 2015 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Net cash (used) generated by operating activities | BRL (1,053,671) | BRL 5,530,569 | BRL 7,035,312 | ||||
Cash and cash equivalents and short-term cash investments | 16,700,000 | ||||||
Long term debt | 59,857,417 | BRL 35,849,395 | |||||
Contractual obligations and commitments, due 2016 | 19,725,000 | ||||||
Contractual obligations and commitments, due 2017 and 2018 | BRL 30,672,000 | ||||||
TJLP | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Fluctuation scenario, percentage stressed, high | 7.00% | 6.50% | 6.00% | 5.50% | |||
Fluctuation scenario, percentage stressed, low | 5.00% | ||||||
Scenario, Forecast | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Fluctuation scenario, percentage stressed | 7.50% | ||||||
Foreign Exchange Contract [Member] | Cash Cash Equivalents And Short Term Investments [Member] | Foreign Exchange Risk | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Concentration Risk, Percentage | 73.22% | 11.41% | |||||
Foreign Exchange Contract [Member] | Borrowings and Financing | Foreign Exchange Risk | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Concentration Risk, Percentage | 78.50% | 41.70% | |||||
Foreign Exchange Contract [Member] | Foreign Currency-Denominated Debt | Foreign Exchange Risk | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Concentration Risk, Percentage | 99.50% | 100.00% | |||||
Foreign Exchange Contract [Member] | Foreign Exchange Risk Sensitivity Analysis | Possible Scenario | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Exchange rate depreciation percentage | 25.00% | ||||||
Foreign Exchange Contract [Member] | Foreign Exchange Risk Sensitivity Analysis | Remote Scenario | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Exchange rate depreciation percentage | 50.00% | ||||||
Foreign Exchange Contract [Member] | Foreign Exchange Risk | Possible Scenario | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Exchange rate depreciation percentage | 25.00% | ||||||
Foreign Exchange Contract [Member] | Foreign Exchange Risk | Remote Scenario | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Exchange rate depreciation percentage | 50.00% | ||||||
Interest Rate Contract [Member] | Incurred Debt, Less Adjustment for Derivative Transactions | Floating Interest Rates | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Concentration Risk, Percentage | 33.40% | 60.30% | |||||
Interest Rate Contract [Member] | Consolidated Debt | Floating Interest Rates | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Concentration Risk, Percentage | 59.60% | 79.40% | |||||
Short-term Investments | |||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||
Consolidated cash investments with counterparties | 99.20% |
Impact of Potential Depreciatio
Impact of Potential Depreciation of Euro and US Dollar (Detail) - Foreign Exchange Contract [Member] | 12 Months Ended |
Dec. 31, 2015 | |
Foreign Exchange Risk | Probable Scenario | US dollar | |
Foreign Currency Exchange Rate [Line Items] | |
Exchange rate depreciation ratio | 3.9048 |
Exchange rate depreciation percentage | 0.00% |
Foreign Exchange Risk | Probable Scenario | Euro | |
Foreign Currency Exchange Rate [Line Items] | |
Exchange rate depreciation ratio | 4.2504 |
Exchange rate depreciation percentage | 0.00% |
Foreign Exchange Risk | Possible Scenario | |
Foreign Currency Exchange Rate [Line Items] | |
Exchange rate depreciation percentage | 25.00% |
Foreign Exchange Risk | Possible Scenario | US dollar | |
Foreign Currency Exchange Rate [Line Items] | |
Exchange rate depreciation ratio | 2.9286 |
Exchange rate depreciation percentage | 25.00% |
Foreign Exchange Risk | Possible Scenario | Euro | |
Foreign Currency Exchange Rate [Line Items] | |
Exchange rate depreciation ratio | 3.1878 |
Exchange rate depreciation percentage | 25.00% |
Foreign Exchange Risk | Remote Scenario | |
Foreign Currency Exchange Rate [Line Items] | |
Exchange rate depreciation percentage | 50.00% |
Foreign Exchange Risk | Remote Scenario | US dollar | |
Foreign Currency Exchange Rate [Line Items] | |
Exchange rate depreciation ratio | 1.9524 |
Exchange rate depreciation percentage | 50.00% |
Foreign Exchange Risk | Remote Scenario | Euro | |
Foreign Currency Exchange Rate [Line Items] | |
Exchange rate depreciation ratio | 2.1252 |
Exchange rate depreciation percentage | 50.00% |
Foreign Exchange Risk Sensitivity Analysis | Probable Scenario | US dollar | |
Foreign Currency Exchange Rate [Line Items] | |
Exchange rate depreciation ratio | 3.90480 |
Exchange rate depreciation percentage | 0.00% |
Foreign Exchange Risk Sensitivity Analysis | Probable Scenario | Euro | |
Foreign Currency Exchange Rate [Line Items] | |
Exchange rate depreciation ratio | 4.25040 |
Exchange rate depreciation percentage | 0.00% |
Foreign Exchange Risk Sensitivity Analysis | Possible Scenario | |
Foreign Currency Exchange Rate [Line Items] | |
Exchange rate depreciation percentage | 25.00% |
Foreign Exchange Risk Sensitivity Analysis | Possible Scenario | US dollar | |
Foreign Currency Exchange Rate [Line Items] | |
Exchange rate depreciation ratio | 4.88100 |
Exchange rate depreciation percentage | 25.00% |
Foreign Exchange Risk Sensitivity Analysis | Possible Scenario | Euro | |
Foreign Currency Exchange Rate [Line Items] | |
Exchange rate depreciation ratio | 5.31300 |
Exchange rate depreciation percentage | 25.00% |
Foreign Exchange Risk Sensitivity Analysis | Remote Scenario | |
Foreign Currency Exchange Rate [Line Items] | |
Exchange rate depreciation percentage | 50.00% |
Foreign Exchange Risk Sensitivity Analysis | Remote Scenario | US dollar | |
Foreign Currency Exchange Rate [Line Items] | |
Exchange rate depreciation ratio | 5.85720 |
Exchange rate depreciation percentage | 50.00% |
Foreign Exchange Risk Sensitivity Analysis | Remote Scenario | Euro | |
Foreign Currency Exchange Rate [Line Items] | |
Exchange rate depreciation ratio | 6.37560 |
Exchange rate depreciation percentage | 50.00% |
Impact of Foreign Exchange Expo
Impact of Foreign Exchange Exposure (Detail) - Foreign Exchange Contract [Member] BRL in Thousands | 12 Months Ended |
Dec. 31, 2015BRL | |
Foreign Exchange Risk Sensitivity Analysis | Probable Scenario | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | BRL 213,774 |
Foreign Exchange Risk Sensitivity Analysis | Probable Scenario | Derivative | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | (11,606,953) |
Foreign Exchange Risk Sensitivity Analysis | Probable Scenario | US dollar | Cash and banks | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | (642,418) |
Foreign Exchange Risk Sensitivity Analysis | Probable Scenario | US dollar | Derivative | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | (22,470,237) |
Foreign Exchange Risk Sensitivity Analysis | Probable Scenario | US dollar | Debt | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | 23,054,987 |
Foreign Exchange Risk Sensitivity Analysis | Probable Scenario | Euro | Cash and banks | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | (12,438,363) |
Foreign Exchange Risk Sensitivity Analysis | Probable Scenario | Euro | Debt | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | 24,316,758 |
Foreign Exchange Risk Sensitivity Analysis | Possible Scenario | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | 267,218 |
Foreign Exchange Risk Sensitivity Analysis | Possible Scenario | Derivative | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | (14,508,691) |
Foreign Exchange Risk Sensitivity Analysis | Possible Scenario | US dollar | Cash and banks | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | (803,023) |
Foreign Exchange Risk Sensitivity Analysis | Possible Scenario | US dollar | Derivative | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | (28,087,796) |
Foreign Exchange Risk Sensitivity Analysis | Possible Scenario | US dollar | Debt | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | 28,818,734 |
Foreign Exchange Risk Sensitivity Analysis | Possible Scenario | Euro | Cash and banks | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | (15,547,954) |
Foreign Exchange Risk Sensitivity Analysis | Possible Scenario | Euro | Debt | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | 30,395,948 |
Foreign Exchange Risk Sensitivity Analysis | Remote Scenario | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | 320,660 |
Foreign Exchange Risk Sensitivity Analysis | Remote Scenario | Derivative | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | (17,410,430) |
Foreign Exchange Risk Sensitivity Analysis | Remote Scenario | US dollar | Cash and banks | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | (963,627) |
Foreign Exchange Risk Sensitivity Analysis | Remote Scenario | US dollar | Derivative | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | (33,705,356) |
Foreign Exchange Risk Sensitivity Analysis | Remote Scenario | US dollar | Debt | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | 34,582,481 |
Foreign Exchange Risk Sensitivity Analysis | Remote Scenario | Euro | Cash and banks | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | (18,657,545) |
Foreign Exchange Risk Sensitivity Analysis | Remote Scenario | Euro | Debt | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | 36,475,137 |
Foreign Exchange Risk | Probable Scenario | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | 13,080,781 |
Foreign Exchange Risk | Probable Scenario | US dollar | Cash and banks | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | 642,418 |
Foreign Exchange Risk | Probable Scenario | Euro | Cash and banks | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | 12,438,363 |
Foreign Exchange Risk | Possible Scenario | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | 9,810,586 |
Foreign Exchange Risk | Possible Scenario | US dollar | Cash and banks | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | 481,814 |
Foreign Exchange Risk | Possible Scenario | Euro | Cash and banks | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | 9,328,772 |
Foreign Exchange Risk | Remote Scenario | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | 6,540,391 |
Foreign Exchange Risk | Remote Scenario | US dollar | Cash and banks | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | 321,209 |
Foreign Exchange Risk | Remote Scenario | Euro | Cash and banks | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | BRL 6,219,182 |
Schedule of Financial Assets an
Schedule of Financial Assets and Liabilities (Detail) - BRL BRL in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Foreign Exchange Risk | Carrying Value | Foreign Exchange Contract [Member] | Borrowings and Financing | ||
Financial Assets and Liabilities [Line Items] | ||
Financial liabilities | BRL 46,935,152 | BRL 14,781,242 |
Foreign Exchange Risk | Carrying Value | Foreign Exchange Contract [Member] | Derivative Financial Instruments, Liabilities | ||
Financial Assets and Liabilities [Line Items] | ||
Financial liabilities | 1,915,910 | 425,784 |
Foreign Exchange Risk | Carrying Value | Foreign Exchange Contract [Member] | Cash and banks | ||
Financial Assets and Liabilities [Line Items] | ||
Derivative financial instruments, assets | 761,788 | 26,759 |
Foreign Exchange Risk | Carrying Value | Foreign Exchange Contract [Member] | Cash Equivalents | ||
Financial Assets and Liabilities [Line Items] | ||
Derivative financial instruments, assets | 10,553,452 | 198,047 |
Foreign Exchange Risk | Carrying Value | Foreign Exchange Contract [Member] | Short-term Investments | ||
Financial Assets and Liabilities [Line Items] | ||
Derivative financial instruments, assets | 1,765,541 | 86,807 |
Foreign Exchange Risk | Carrying Value | Foreign Exchange Contract [Member] | Derivative Financial Instruments, Assets | ||
Financial Assets and Liabilities [Line Items] | ||
Derivative financial instruments, assets | 6,940,963 | 3,025,464 |
Foreign Exchange Risk | Estimate of Fair Value Measurement [Member] | Foreign Exchange Contract [Member] | Borrowings and Financing | ||
Financial Assets and Liabilities [Line Items] | ||
Financial liabilities | 30,727,817 | 14,342,043 |
Foreign Exchange Risk | Estimate of Fair Value Measurement [Member] | Foreign Exchange Contract [Member] | Derivative Financial Instruments, Liabilities | ||
Financial Assets and Liabilities [Line Items] | ||
Financial liabilities | 1,915,910 | 425,784 |
Foreign Exchange Risk | Estimate of Fair Value Measurement [Member] | Foreign Exchange Contract [Member] | Cash and banks | ||
Financial Assets and Liabilities [Line Items] | ||
Derivative financial instruments, assets | 761,788 | 26,759 |
Foreign Exchange Risk | Estimate of Fair Value Measurement [Member] | Foreign Exchange Contract [Member] | Cash Equivalents | ||
Financial Assets and Liabilities [Line Items] | ||
Derivative financial instruments, assets | 10,553,452 | 198,047 |
Foreign Exchange Risk | Estimate of Fair Value Measurement [Member] | Foreign Exchange Contract [Member] | Short-term Investments | ||
Financial Assets and Liabilities [Line Items] | ||
Derivative financial instruments, assets | 1,765,541 | 86,807 |
Foreign Exchange Risk | Estimate of Fair Value Measurement [Member] | Foreign Exchange Contract [Member] | Derivative Financial Instruments, Assets | ||
Financial Assets and Liabilities [Line Items] | ||
Derivative financial instruments, assets | 6,940,963 | 3,025,464 |
Foreign Exchange Risk Sensitivity Analysis | Carrying Value | Interest Rate Contract [Member] | Borrowings and Financing | ||
Financial Assets and Liabilities [Line Items] | ||
Financial liabilities | 18,307,705 | 17,722,928 |
Foreign Exchange Risk Sensitivity Analysis | Carrying Value | Interest Rate Contract [Member] | Derivative Financial Instruments, Liabilities | ||
Financial Assets and Liabilities [Line Items] | ||
Financial liabilities | 594,433 | 241,138 |
Foreign Exchange Risk Sensitivity Analysis | Carrying Value | Interest Rate Contract [Member] | Cash Equivalents | ||
Financial Assets and Liabilities [Line Items] | ||
Derivative financial instruments, assets | 3,232,771 | 1,718,874 |
Foreign Exchange Risk Sensitivity Analysis | Carrying Value | Interest Rate Contract [Member] | Short-term Investments | ||
Financial Assets and Liabilities [Line Items] | ||
Derivative financial instruments, assets | 162,145 | 195,893 |
Foreign Exchange Risk Sensitivity Analysis | Carrying Value | Interest Rate Contract [Member] | Derivative Financial Instruments, Assets | ||
Financial Assets and Liabilities [Line Items] | ||
Derivative financial instruments, assets | 445,740 | 196,017 |
Foreign Exchange Risk Sensitivity Analysis | Estimate of Fair Value Measurement [Member] | Interest Rate Contract [Member] | Borrowings and Financing | ||
Financial Assets and Liabilities [Line Items] | ||
Financial liabilities | 18,298,218 | 17,717,628 |
Foreign Exchange Risk Sensitivity Analysis | Estimate of Fair Value Measurement [Member] | Interest Rate Contract [Member] | Derivative Financial Instruments, Liabilities | ||
Financial Assets and Liabilities [Line Items] | ||
Financial liabilities | 594,433 | 241,138 |
Foreign Exchange Risk Sensitivity Analysis | Estimate of Fair Value Measurement [Member] | Interest Rate Contract [Member] | Cash Equivalents | ||
Financial Assets and Liabilities [Line Items] | ||
Derivative financial instruments, assets | 3,232,771 | 1,718,874 |
Foreign Exchange Risk Sensitivity Analysis | Estimate of Fair Value Measurement [Member] | Interest Rate Contract [Member] | Short-term Investments | ||
Financial Assets and Liabilities [Line Items] | ||
Derivative financial instruments, assets | 162,145 | 195,893 |
Foreign Exchange Risk Sensitivity Analysis | Estimate of Fair Value Measurement [Member] | Interest Rate Contract [Member] | Derivative Financial Instruments, Assets | ||
Financial Assets and Liabilities [Line Items] | ||
Derivative financial instruments, assets | BRL 445,740 | BRL 196,017 |
Derivative Financial Instrume72
Derivative Financial Instruments Designated and Non-designated As Hedge (Detail) - Fair Value Hedging - BRL BRL in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Foreign Exchange Risk | Foreign Exchange Contract [Member] | Not Designated as Hedging Instrument | US dollar | Put Option | ||
Derivative [Line Items] | ||
Derivatives designated Maturity (years) | 4 years 9 months 18 days | |
Fair value Amounts (payable)/receivable | BRL 8,783 | |
Foreign Exchange Risk | Foreign Exchange Contract [Member] | Not Designated as Hedging Instrument | Euro | Put Option | ||
Derivative [Line Items] | ||
Derivatives designated Maturity (years) | 3 years 9 months 18 days | |
Fair value Amounts (payable)/receivable | BRL 24,767 | |
Foreign Exchange Risk | Foreign Exchange Contract [Member] | Not Designated as Hedging Instrument | Euro | Call Option | ||
Derivative [Line Items] | ||
Derivatives designated Maturity (years) | 3 years 9 months 18 days | |
Fair value Amounts (payable)/receivable | BRL (32,265) | |
Foreign Exchange Risk | Foreign Exchange Contract [Member] | Currency Swap | Designated as Hedging Instrument | US dollar | ||
Derivative [Line Items] | ||
Fair value Amounts (payable)/receivable | BRL 4,954,291 | BRL 1,816,206 |
Foreign Exchange Risk | Foreign Exchange Contract [Member] | Currency Swap | Designated as Hedging Instrument | US dollar | Fixed Rate | ||
Derivative [Line Items] | ||
Derivatives designated Maturity (years) | 4 years 9 months 18 days | |
Fair value Amounts (payable)/receivable | BRL 819,647 | 649,293 |
Foreign Exchange Risk | Foreign Exchange Contract [Member] | Currency Swap | Designated as Hedging Instrument | Euro | ||
Derivative [Line Items] | ||
Fair value Amounts (payable)/receivable | (169,513) | |
Foreign Exchange Risk | Foreign Exchange Contract [Member] | Currency Swap | Not Designated as Hedging Instrument | US dollar | ||
Derivative [Line Items] | ||
Fair value Amounts (payable)/receivable | 31,467 | 24,122 |
Foreign Exchange Risk | Foreign Exchange Contract [Member] | Currency Swap | Not Designated as Hedging Instrument | Brazil, Brazil Real | ||
Derivative [Line Items] | ||
Fair value Amounts (payable)/receivable | (27,965) | (31,290) |
Foreign Exchange Risk | Foreign Exchange Contract [Member] | Non-deliverable Forward (NDFs) | Designated as Hedging Instrument | Euro | ||
Derivative [Line Items] | ||
Fair value Amounts (payable)/receivable | 23,524 | |
Foreign Exchange Risk | Foreign Exchange Contract [Member] | Non-deliverable Forward (NDFs) | Not Designated as Hedging Instrument | US dollar | ||
Derivative [Line Items] | ||
Fair value Amounts (payable)/receivable | (156,707) | 107,718 |
Foreign Exchange Risk | Foreign Exchange Contract [Member] | Non-deliverable Forward (NDFs) | Not Designated as Hedging Instrument | Euro | ||
Derivative [Line Items] | ||
Fair value Amounts (payable)/receivable | BRL (427,452) | 10,107 |
Foreign Exchange Risk | Minimum | Foreign Exchange Contract [Member] | Not Designated as Hedging Instrument | US dollar | Put Option | ||
Derivative [Line Items] | ||
Derivatives designated Maturity (years) | 3 years 3 months 18 days | |
Foreign Exchange Risk | Minimum | Foreign Exchange Contract [Member] | Currency Swap | Designated as Hedging Instrument | US dollar | ||
Derivative [Line Items] | ||
Derivatives designated Maturity (years) | 1 month 6 days | |
Foreign Exchange Risk | Minimum | Foreign Exchange Contract [Member] | Currency Swap | Designated as Hedging Instrument | Euro | ||
Derivative [Line Items] | ||
Derivatives designated Maturity (years) | 1 year 10 months 24 days | |
Foreign Exchange Risk | Maximum | Foreign Exchange Contract [Member] | Not Designated as Hedging Instrument | US dollar | Put Option | ||
Derivative [Line Items] | ||
Derivatives designated Maturity (years) | 4 years 9 months 18 days | |
Foreign Exchange Risk | Maximum | Foreign Exchange Contract [Member] | Currency Swap | Designated as Hedging Instrument | US dollar | ||
Derivative [Line Items] | ||
Derivatives designated Maturity (years) | 8 years 2 months 12 days | |
Foreign Exchange Risk | Maximum | Foreign Exchange Contract [Member] | Currency Swap | Designated as Hedging Instrument | Euro | ||
Derivative [Line Items] | ||
Derivatives designated Maturity (years) | 4 years 3 months 18 days | |
Foreign Exchange Risk | Maximum | Foreign Exchange Contract [Member] | Currency Swap | Not Designated as Hedging Instrument | US dollar | ||
Derivative [Line Items] | ||
Derivatives designated Maturity (years) | 1 year | |
Foreign Exchange Risk | Maximum | Foreign Exchange Contract [Member] | Currency Swap | Not Designated as Hedging Instrument | Brazil, Brazil Real | ||
Derivative [Line Items] | ||
Derivatives designated Maturity (years) | 1 year | |
Foreign Exchange Risk | Maximum | Foreign Exchange Contract [Member] | Non-deliverable Forward (NDFs) | Designated as Hedging Instrument | Euro | ||
Derivative [Line Items] | ||
Derivatives designated Maturity (years) | 1 year | |
Foreign Exchange Risk | Maximum | Foreign Exchange Contract [Member] | Non-deliverable Forward (NDFs) | Not Designated as Hedging Instrument | US dollar | ||
Derivative [Line Items] | ||
Derivatives designated Maturity (years) | 1 year | |
Foreign Exchange Risk | Maximum | Foreign Exchange Contract [Member] | Non-deliverable Forward (NDFs) | Not Designated as Hedging Instrument | Euro | ||
Derivative [Line Items] | ||
Derivatives designated Maturity (years) | 1 year | |
Foreign Exchange Risk Sensitivity Analysis | Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Derivatives designated Maturity (years) | 4 years 9 months 18 days | |
Fair value Amounts (payable)/receivable | BRL (146,121) | (37,627) |
Foreign Exchange Risk Sensitivity Analysis | Designated as Hedging Instrument | LIBOR | ||
Derivative [Line Items] | ||
Derivatives designated Maturity (years) | 1 year | |
Fair value Amounts (payable)/receivable | (1,413) | |
Foreign Exchange Risk Sensitivity Analysis | Not Designated as Hedging Instrument | LIBOR | ||
Derivative [Line Items] | ||
Fair value Amounts (payable)/receivable | BRL (448,312) | (200,771) |
Foreign Exchange Risk Sensitivity Analysis | Not Designated as Hedging Instrument | Eurodollar [Member] | ||
Derivative [Line Items] | ||
Derivatives designated Maturity (years) | 6 years 1 month 6 days | |
Fair value Amounts (payable)/receivable | BRL 445,740 | BRL 194,690 |
Foreign Exchange Risk Sensitivity Analysis | Minimum | Not Designated as Hedging Instrument | LIBOR | ||
Derivative [Line Items] | ||
Derivatives designated Maturity (years) | 1 month 6 days | |
Foreign Exchange Risk Sensitivity Analysis | Maximum | Not Designated as Hedging Instrument | LIBOR | ||
Derivative [Line Items] | ||
Derivatives designated Maturity (years) | 6 years 1 month 6 days |
Derivative Transactions Recogni
Derivative Transactions Recognized in Financial Income (Expenses) (Detail) - Foreign Exchange Risk - Put Option - Foreign Exchange Contract [Member] - BRL BRL in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative transactions included in financial income (expense) | BRL 5,840,910 | BRL 356,488 |
Currency Swap | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative transactions included in financial income (expense) | 4,539,844 | 674,228 |
Forward Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative transactions included in financial income (expense) | 1,322,916 | BRL (317,740) |
Options Held | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative transactions included in financial income (expense) | BRL (21,850) |
Movements in Hedge Accounting E
Movements in Hedge Accounting Effects in Other Comprehensive Income (Detail) - Foreign Exchange Risk Sensitivity Analysis - BRL BRL in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Foreign Exchange Contract [Member] | |||
Interest Rate Swaps [Line Items] | |||
Balance in 2012 | BRL 165,085 | BRL 57,474 | BRL 128,127 |
Gain on designated hedges | (697,726) | 143,524 | (126,511) |
Transfer on ineffective portion to profit or loss | (7,626) | 10,443 | (16,611) |
Amortization of hedges to profit or loss at effective rate | 8,336 | 9,081 | 36,072 |
Deferred taxes on hedge accounting | 236,985 | (55,437) | 36,397 |
Balance in 2013 | (294,946) | 165,085 | 57,474 |
Interest Rate Contract [Member] | |||
Interest Rate Swaps [Line Items] | |||
Balance in 2012 | (41,442) | (56,624) | 12,057 |
Gain on designated hedges | (104,339) | 20,029 | (80,487) |
Transfer on ineffective portion to profit or loss | 78 | (97) | 500 |
Amortization of hedges to profit or loss at effective rate | 3,325 | 3,070 | (24,075) |
Deferred taxes on hedge accounting | 34,319 | (7,820) | 35,381 |
Balance in 2013 | BRL (108,059) | BRL (41,442) | BRL (56,624) |
Schedule of Gain or Loss on Der
Schedule of Gain or Loss on Derivatives (Detail) - Interest Rate Contract [Member] - BRL BRL in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on interest rate swap | BRL (43,808) | BRL 70,896 |
Interest Rate Swap | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on interest rate swap | BRL (43,808) | BRL 70,896 |
Interest Rate Scenarios (Detail
Interest Rate Scenarios (Detail) | Dec. 31, 2015 |
Probable Scenario | LIBOR | |
Interest Rate Derivatives Outstanding [Line Items] | |
Interest rate | 0.84615% |
Probable Scenario | TJLP | |
Interest Rate Derivatives Outstanding [Line Items] | |
Interest rate | 7.00% |
Probable Scenario | CDI | |
Interest Rate Derivatives Outstanding [Line Items] | |
Interest rate | 14.14% |
Possible Scenario | LIBOR | |
Interest Rate Derivatives Outstanding [Line Items] | |
Interest rate | 1.05769% |
Possible Scenario | TJLP | |
Interest Rate Derivatives Outstanding [Line Items] | |
Interest rate | 8.80% |
Possible Scenario | CDI | |
Interest Rate Derivatives Outstanding [Line Items] | |
Interest rate | 17.68% |
Remote Scenario | LIBOR | |
Interest Rate Derivatives Outstanding [Line Items] | |
Interest rate | 1.26923% |
Remote Scenario | TJLP | |
Interest Rate Derivatives Outstanding [Line Items] | |
Interest rate | 10.50% |
Remote Scenario | CDI | |
Interest Rate Derivatives Outstanding [Line Items] | |
Interest rate | 21.21% |
Schedule of Impacts of Exposure
Schedule of Impacts of Exposure to Interest Rates (Detail) - BRL BRL in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
CDI-indexed debt | BRL 7,386,703 | BRL 3,221,481 |
Probable Scenario | ||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
Total associated to interest rates | 14,095,560 | |
Probable Scenario | LIBOR | ||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
Derivative instruments (net position - LIBOR) | (198,734) | |
Probable Scenario | Index | LIBOR | ||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
US$ LIBOR-indexed debt | 562,123 | |
Probable Scenario | Index | TJLP | ||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
CDI-indexed debt | 942,049 | |
Probable Scenario | Index | CDI | ||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
CDI-indexed debt | 2,120,449 | |
Derivative financial instruments (net position - CDI) | 10,669,673 | |
Possible Scenario | ||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
Total associated to interest rates | 17,132,083 | |
Possible Scenario | LIBOR | ||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
Derivative instruments (net position - LIBOR) | (211,566) | |
Possible Scenario | Index | LIBOR | ||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
US$ LIBOR-indexed debt | 660,468 | |
Possible Scenario | Index | TJLP | ||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
CDI-indexed debt | 1,119,643 | |
Possible Scenario | Index | CDI | ||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
CDI-indexed debt | 2,516,488 | |
Derivative financial instruments (net position - CDI) | 13,047,050 | |
Remote Scenario | ||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
Total associated to interest rates | 20,335,607 | |
Remote Scenario | LIBOR | ||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
Derivative instruments (net position - LIBOR) | (231,488) | |
Remote Scenario | Index | LIBOR | ||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
US$ LIBOR-indexed debt | 715,699 | |
Remote Scenario | Index | TJLP | ||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
CDI-indexed debt | 1,304,957 | |
Remote Scenario | Index | CDI | ||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
CDI-indexed debt | 2,980,156 | |
Derivative financial instruments (net position - CDI) | BRL 15,566,283 |
Contractual Maturities of Finan
Contractual Maturities of Financial Liabilities, Including Estimated Interest Payments (Detail) - BRL BRL in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | |
Fair Value Measurements Maturity Dates Of Investments [Line Items] | |||
Usage rights | BRL 918,537 | BRL 1,361,940 | |
Fair Value, Estimate Not Practicable, Effective Interest Rate | |||
Fair Value Measurements Maturity Dates Of Investments [Line Items] | |||
Loans and financings | [1] | 63,417 | |
Debentures | [1] | 5,809 | |
Unconditional purchase obligations | [2] | 2,578 | |
Concession fees | [3] | 2,379 | |
Usage rights | [4] | 919 | |
Pension plan contributions | [5] | 1,443 | |
Contractual obligation | 76,545 | ||
Less Than One Year | Fair Value, Estimate Not Practicable, Effective Interest Rate | |||
Fair Value Measurements Maturity Dates Of Investments [Line Items] | |||
Loans and financings | [1] | 15,282 | |
Debentures | [1] | 1,622 | |
Unconditional purchase obligations | [2] | 1,477 | |
Concession fees | [3] | 288 | |
Usage rights | [4] | 912 | |
Pension plan contributions | [5] | 144 | |
Contractual obligation | 19,725 | ||
Maturity One to Three Years | Fair Value, Estimate Not Practicable, Effective Interest Rate | |||
Fair Value Measurements Maturity Dates Of Investments [Line Items] | |||
Loans and financings | [1] | 24,998 | |
Debentures | [1] | 4,170 | |
Unconditional purchase obligations | [2] | 758 | |
Concession fees | [3] | 306 | |
Usage rights | [4] | 7 | |
Pension plan contributions | [5] | 433 | |
Contractual obligation | 30,672 | ||
Maturity Three to five Years [Member] | Fair Value, Estimate Not Practicable, Effective Interest Rate | |||
Fair Value Measurements Maturity Dates Of Investments [Line Items] | |||
Loans and financings | [1] | 16,894 | |
Debentures | [1] | 17 | |
Unconditional purchase obligations | [2] | 343 | |
Concession fees | [3] | 348 | |
Pension plan contributions | [5] | 289 | |
Contractual obligation | 17,891 | ||
Maturity over Five Years | Fair Value, Estimate Not Practicable, Effective Interest Rate | |||
Fair Value Measurements Maturity Dates Of Investments [Line Items] | |||
Loans and financings | [1] | 6,243 | |
Concession fees | [3] | 1,437 | |
Pension plan contributions | [5] | 577 | |
Contractual obligation | BRL 8,257 | ||
[1] | Includes (1) estimated future payments of interest on our loans and financings, calculated based on interest rates and foreign exchange rates applicable at December 31, 2015 and assuming that all amortization payments and payments at maturity on our loans and financings will be made on their scheduled payment dates, and (2) estimated future cash flows on our derivative obligations, calculated based on interest rates and foreign exchange rates applicable as of December 31, 2015 and assuming that all payments on our derivative obligations will be made on their scheduled payment dates; | ||
[2] | Includes estimated future payments of interest on our debentures, calculated based on interest rates applicable as of December 31, 2015 and assuming that all amortization payments and payments at maturity on our debentures will be made on their scheduled payment dates; | ||
[3] | Consists of (1) obligations in connection with a business process outsourcing agreement, and (2) purchase obligations for network equipment pursuant to binding obligations which include all significant terms, including fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction; | ||
[4] | Consists of payments due to ANATEL for radio frequency licenses. Includes accrued and unpaid interest as of December 31, 2015; and | ||
[5] | Consists of expected contributions to amortize the actuarial deficit of the BrTPREV plan. |
Schedule of Net Operating Reven
Schedule of Net Operating Revenue (Detail) - BRL BRL in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Operating Income (Loss) [Abstract] | |||
Gross operating revenue | BRL 44,519,320 | BRL 45,357,481 | BRL 45,252,584 |
Deductions from gross revenue | (17,165,555) | (17,110,382) | (16,830,437) |
Taxes | (8,148,655) | (8,906,909) | (9,538,623) |
Discounts and other deductions | (9,016,900) | (8,203,473) | (7,291,814) |
Net operating revenue | BRL 27,353,765 | BRL 28,247,099 | BRL 28,422,147 |
Summary of Operating Expenses (
Summary of Operating Expenses (Detail) - BRL BRL in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Operating expenses by nature | ||||
Cost of sales and/or services | BRL (16,250,083) | BRL (16,257,192) | BRL (16,466,773) | |
Selling expenses | (4,719,811) | (5,565,757) | (5,532,045) | |
General and administrative expenses | (3,912,178) | (3,834,563) | (3,683,440) | |
Other operating income | 1,630,056 | 4,466,914 | 3,193,024 | |
Other operating expenses | (2,866,828) | (2,437,411) | (1,932,174) | |
Equity pick up | (21,883) | (5,881) | (17,750) | |
Total operating expenses | (26,140,727) | (23,633,890) | (24,439,158) | |
Allowance for doubtful accounts | ||||
Operating expenses by nature | ||||
Total operating expenses | (721,175) | (649,463) | (922,779) | |
Third-party Services | ||||
Operating expenses by nature | ||||
Total operating expenses | (6,317,233) | (6,258,606) | (6,119,733) | |
Depreciation And Amortization [Member] | ||||
Operating expenses by nature | ||||
Total operating expenses | (6,195,039) | (5,766,702) | (5,691,824) | |
Rentals and Insurance | ||||
Operating expenses by nature | ||||
Total operating expenses | (3,599,830) | (3,119,521) | (2,119,684) | |
Personnel | ||||
Operating expenses by nature | ||||
Total operating expenses | (2,719,530) | (2,829,307) | (2,534,222) | |
Network Maintenance Services | ||||
Operating expenses by nature | ||||
Total operating expenses | (1,901,569) | (1,923,074) | (2,328,140) | |
Interconnection | ||||
Operating expenses by nature | ||||
Total operating expenses | (1,808,845) | (2,689,815) | (3,965,623) | |
Contingencies | ||||
Operating expenses by nature | ||||
Total operating expenses | (861,500) | (779,314) | (656,849) | |
Advertising and Publicity | ||||
Operating expenses by nature | ||||
Total operating expenses | (405,626) | (674,275) | (556,500) | |
Handset and Other Costs | ||||
Operating expenses by nature | ||||
Total operating expenses | (284,637) | (730,444) | (515,377) | |
Impairments | ||||
Operating expenses by nature | ||||
Total operating expenses | [1] | (590,641) | ||
Taxes and Other Income (Expenses) | ||||
Operating expenses by nature | ||||
Total operating expenses | (1,013,056) | (1,459,012) | (1,397,982) | |
Other Operating Income (Expense) | ||||
Operating expenses by nature | ||||
Total operating expenses | [2] | BRL 277,954 | BRL 3,245,643 | BRL 2,369,555 |
[1] | As at December 31, 2015, the Company conducted the annual impairment test and recognized a loss on goodwill amounting to R$501,465 related to goodwill and trademarks for the Telecommunication services in Brazil due to a significant change in the macroeconomic conditions in Brazil and R$89,176 related to Africa which is being reported as held for sale. The fair value of the reporting unit was estimated using the expected present value of future cash flows. | |||
[2] | The other net operating income (expenses) for the year ended December 31, 2015 primarily include the reversal of a civil contingency amounting to R$325,709 arising from the revision of the calculation methodology and R$47,756 in costs relating to terminations of employments contracts in this period. Other net operating income (expenses) for the year ended December 31, 2014 primarily includes the gain of R$2.4 billion on the sale, net of transaction expenses, recognized in the context of the agreement entered into on December 3, 2013 by the Company and SBA Torres Brasil for the transfer of 100% of the shares of one of its subsidiaries that held 2,007 telecommunication towers used to provide mobile telephony services and R$355 million resulting from the revision of the calculation methodology of the provisions for losses in corporate lawsuits and the reversal of R$476 million from the provision related to the adhesion to the REFIS tax refinancing program. |
Summary of Operating Expenses81
Summary of Operating Expenses (Parenthetical) (Detail) - BRL BRL in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Other Non Operating Income Expense [Line Items] | |||
Impairment charge | BRL 524,870 | BRL 18,293 | BRL 429,024 |
Other Operating Income (Expense) | |||
Other Non Operating Income Expense [Line Items] | |||
Reversal of a civil contingency amount | 325,709 | ||
Civil contingency costs relating to downsizings | 47,756 | ||
Gain on sale | BRL 2,400,000 | ||
Provisions for losses in corporate lawsuits | 355,000 | ||
Tax provision | BRL 476,000 | ||
BRAZIL | |||
Other Non Operating Income Expense [Line Items] | |||
Impairment charge | 501,465 | ||
Other, primarily Africa | |||
Other Non Operating Income Expense [Line Items] | |||
Impairment charge | BRL 89,176 |
Financial Income (Expenses) (De
Financial Income (Expenses) (Detail) - BRL BRL in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Financial income | ||||
Exchange differences on translating foreign short-term investments (trading) | BRL 3,349,783 | BRL 32,444 | BRL 69,626 | |
Interest on other assets | 740,417 | 762,498 | 694,734 | |
Income from short-term investments | 235,042 | 354,526 | 278,598 | |
Interest on related parties loans | 29,057 | 1,066 | ||
Other income | [1] | 1,010,235 | 194,233 | 332,259 |
Total | 5,364,534 | 1,344,767 | 1,375,217 | |
Financial expenses and other charges | ||||
Inflation and exchange losses on third-party borrowings | (10,908,438) | (1,464,510) | (2,013,066) | |
Interest on borrowings payable to third parties | (3,178,461) | (1,979,414) | (1,591,915) | |
Interest on debentures | (871,977) | (953,863) | (860,400) | |
Derivatives | 5,797,102 | 427,384 | 1,158,520 | |
Subtotal: | (9,161,774) | (3,970,403) | (3,306,861) | |
Loss on available for sale financial assets | [2] | (447,737) | ||
Interest on other liabilities | (833,276) | (814,148) | (643,318) | |
Tax on transactions and bank fees | (712,799) | (385,824) | (193,048) | |
Inflation adjustment to provisions | (176,297) | (233,276) | (246,205) | |
Interest on taxes in installments - tax financing program | (93,784) | (132,194) | (81,262) | |
Other expenses | [3] | (476,875) | (357,844) | (206,479) |
Subtotal: | (2,740,768) | (1,923,286) | (1,370,312) | |
Total | (11,902,542) | (5,893,689) | (4,677,173) | |
Financial income (expenses) | BRL (6,538,008) | BRL (4,548,922) | BRL (3,301,956) | |
[1] | Refers basically to the gain on debenture repayment transactions and includes USD187.5 million (R$733 million) related with our portion of dividends approved by Unitel. | |||
[2] | Refers basically to the loss of R$408 million due to other-than-temporary impairment of the investment in Unitel classified as available-for-sale. | |||
[3] | Represented mainly by financial fees and commissions. |
Financial Income (Expenses) (Pa
Financial Income (Expenses) (Parenthetical) (Detail) - 12 months ended Dec. 31, 2015 BRL in Millions, $ in Millions | BRL | USD ($) |
Other Income and Expenses [Abstract] | ||
Proceeds from dividends received | BRL 733 | $ 187.5 |
Other than temporary impairment losses, investment | BRL 408 |
Cash and Cash Equivalents (Deta
Cash and Cash Equivalents (Detail) - BRL BRL in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Cash and Cash Equivalents [Abstract] | ||
Cash and banks | BRL 1,111,840 | BRL 532,285 |
Cash equivalents | 13,786,223 | 1,916,921 |
Total | 14,898,063 | 2,449,206 |
Time deposits | 10,734,985 | 205,523 |
Bank certificates of deposit | 1,387,158 | 920,116 |
Repurchase agreements | 1,637,798 | 773,487 |
Other | 26,282 | 17,795 |
Cash equivalents | BRL 13,786,223 | BRL 1,916,921 |
Short-term Investments (Detail)
Short-term Investments (Detail) BRL in Thousands, € in Millions | Dec. 31, 2015BRL | Dec. 31, 2014BRL | Jun. 30, 2014EUR (€) |
Short-term Investments [Abstract] | |||
Time deposits | BRL 1,700,386 | ||
Private securities | 125,966 | BRL 111,285 | |
Government securities | 101,334 | 171,415 | |
Total | 1,927,686 | 282,700 | |
Current | 1,801,720 | 171,415 | € 897 |
Non-current | BRL 125,966 | BRL 111,285 |
Trade Accounts Receivable, Ne86
Trade Accounts Receivable, Net (Detail) - BRL BRL in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Receivables [Abstract] | |||
Billed services | BRL 6,733,219 | BRL 5,481,028 | |
Unbilled services | 1,296,562 | 1,450,777 | |
Mobile handsets and accessories sold | 911,077 | 1,032,022 | |
Allowance for doubtful accounts | (561,139) | (513,787) | BRL (654,042) |
Total | BRL 8,379,719 | BRL 7,450,040 |
List of Past Due Financing Rece
List of Past Due Financing Receivables (Detail) - BRL BRL in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Accounts Receivable [Line Items] | ||
Trade receivable | BRL 8,940,858 | BRL 7,963,827 |
Current | ||
Accounts Receivable [Line Items] | ||
Trade receivable | 6,855,027 | 5,878,915 |
Past- due up to 60 days | ||
Accounts Receivable [Line Items] | ||
Trade receivable | 1,296,612 | 1,388,330 |
Past- due from 61 to 90 days | ||
Accounts Receivable [Line Items] | ||
Trade receivable | 146,608 | 136,200 |
Past- due from 91 to 120 days | ||
Accounts Receivable [Line Items] | ||
Trade receivable | 121,916 | 113,212 |
Past- due from 121 to 150 days | ||
Accounts Receivable [Line Items] | ||
Trade receivable | 124,887 | 102,139 |
Over 150 days past- due | ||
Accounts Receivable [Line Items] | ||
Trade receivable | BRL 395,808 | BRL 345,031 |
Summary of Allowance for Doubtf
Summary of Allowance for Doubtful Accounts (Detail) - BRL BRL in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||
Balance at Jan 1, 2014 | BRL (513,787) | BRL (654,042) |
Acquisition of investments-PT Portugal | (652,964) | |
Allowance for doubtful accounts | (692,935) | (684,017) |
Trade receivables written off as uncollectible | 645,583 | 712,128 |
Foreign exchange differences | 6,841 | |
Transfer to assets held for sale | 758,267 | |
Balance in 2014 | BRL (561,139) | BRL (513,787) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - BRL BRL in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Operating Loss Carryforwards [Line Items] | |||
Statutory income tax rate | 34.00% | 34.00% | 34.00% |
Income (expenses) from continuing operations | BRL (3,379,927) | BRL (758,268) | BRL (76,610) |
Recoverable social contribution (CSLL) | |||
Operating Loss Carryforwards [Line Items] | |||
Statutory income tax rate | 25.00% | ||
Social Corporation Taxes | |||
Operating Loss Carryforwards [Line Items] | |||
Statutory income tax rate | 9.00% |
Summary of Income Taxes (Detail
Summary of Income Taxes (Detail) - BRL BRL in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||
Income (expenses) from continuing operations | BRL (3,379,927) | BRL (758,268) | BRL (76,610) |
Expenses from discontinued operations | (327,115) | (92,545) | |
Total income tax recognized in earnings | (3,707,042) | (850,813) | (76,610) |
Income tax recognized in other comprehensive income | BRL (194,020) | BRL 243,333 | BRL (17,514) |
Summary of Income Tax Expense A
Summary of Income Tax Expense Attributable to Income From Continuing Operation (Detail) - BRL BRL in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||
Current taxes | BRL (781,576) | BRL (622,001) | BRL (418,498) |
Deferred taxes | (2,598,351) | (136,267) | 341,888 |
Income tax and social contribution effect on profit or loss | BRL (3,379,927) | BRL (758,268) | BRL (76,610) |
Summary of Tax Rate Reconciliat
Summary of Tax Rate Reconciliation From Continuing Operation (Detail) - BRL BRL in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Income Tax Disclosure [Abstract] | ||||
Income (loss) before taxes | [1] | BRL (5,324,970) | BRL 64,287 | BRL 681,033 |
Income tax and social contribution at statutory rate (34%) | 1,810,490 | (21,858) | (231,552) | |
Valuation allowance | [2] | (4,755,151) | 5,848 | (68,654) |
Effect of foreign rate differential | [3] | (106,388) | (23,795) | (13,046) |
Tax effects on permanent additions | [4] | (268,989) | (688,719) | (76,433) |
Tax effects on permanent exclusions | 114,052 | 376,241 | 280,844 | |
Tax effect of REFIS permanent additions | [5] | (443,401) | ||
Tax incentives (basically, operating income) | [6] | 7,332 | 36,281 | 31,573 |
Tax amnesty program | [7] | (165,676) | ||
Other | (15,597) | 1,135 | 658 | |
Income tax and social contribution effect on profit or loss | BRL (3,379,927) | BRL (758,268) | BRL (76,610) | |
[1] | In 2013, substantially all pre tax income and income tax are related to Brazilian Companies. In 2015 and 2014 income before taxes and income tax for continuing operations is as follows: | |||
[2] | Refers to valuation allowance due to change in judgment about the recoverability of deferred tax assets. The change in the beginning-of-the year balance of the valuation allowance due to change in judgment about the recoverability of deferred tax assets amounts to R$2,845,521. | |||
[3] | Refers to the effects of the difference between the applicable tax rate in Brazil and the tax rates applicable to other Group companies located abroad. | |||
[4] | In 2015 the main effects of permanent addition refers to: (1) the impairment of Unitel available-for-sale investment which is not tax deductible in the amount of R$152 million (Note 26), (2) the impairment of goodwill and trademarks for the Telecommunication services in Brazil and impairment of goodwill related to África, which is not tax deductible in the amount of R$91 million and (3) nondeductible fines in the amount of R$25 million. In 2014 the main effects refers to the impairment of PT SGPS shares held subsidiary TMAR which is not tax deductible in the amount of R$266 million. | |||
[5] | In 2014, the main effects are linked to goodwill amortization (pre-merger period), settlement of principal, fine and interest utilizing tax loss carryforwards as permitted by Article 2 of Law 12996/2014 and Article 33 of Law 13043/2014. | |||
[6] | These tax incentives correspond mainly to a 75% reduction in the current income tax due on operating income obtained as a result of telecommunication services rendered in certain northern and northeast regions of Brasil, where the Company holds facilities for the purpose of rendering those services. This tax benefit is usually granted for a 10 year period, limited up to January 1, 2024. | |||
[7] | Refers to uncertain tax position taken in prior periods which were assessed by the taxing authorities. Although the Company believed in prior periods that these positions would be more-likely-than-not of being sustained, it has decided to adhere to PRORELIT and avoid substantial costs to keep on going discussions with government. PRORELIT program allowed taxpayers to settle federal tax debts accrued prior to June 30th, 2015, excluding tax debts that are subject to tax installment payments. |
Summary of Tax Rate Reconcili93
Summary of Tax Rate Reconciliation From Continuing Operation (Parenthetical) (Detail) - BRL BRL in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Income Tax Reconciliation [Line Items] | ||||
Statutory income tax rate | 34.00% | 34.00% | 34.00% | |
Income (loss) before taxes | [1] | BRL (5,324,970) | BRL 64,287 | BRL 681,033 |
Income (expenses) from continuing operations | (3,379,927) | (758,268) | (76,610) | |
Current taxes | (781,576) | (622,001) | (418,498) | |
Deferred taxes | (2,598,351) | (136,267) | 341,888 | |
Valuation allowance | [2] | 4,755,151 | (5,848) | BRL 68,654 |
Valuation allowance of tax credits | 152,000 | 266,000 | ||
Impairment of goodwill and trademarks | 91,000 | |||
Nondeductible fines in the amount | BRL 25,000 | |||
Tax incentives current income tax | 75.00% | |||
Tax benefit granted, year | 10 years | |||
Income Tax Recoverable | ||||
Income Tax Reconciliation [Line Items] | ||||
Valuation allowance | BRL 2,845,521 | |||
Brazil | ||||
Income Tax Reconciliation [Line Items] | ||||
Income (loss) before taxes | (4,428,005) | (145,581) | ||
Income (expenses) from continuing operations | (3,191,186) | (615,406) | ||
Current taxes | (589,090) | (479,061) | ||
Deferred taxes | (2,602,096) | (136,345) | ||
Foreign Tax Authority | ||||
Income Tax Reconciliation [Line Items] | ||||
Income (loss) before taxes | (896,965) | 209,868 | ||
Income (expenses) from continuing operations | (188,741) | (142,862) | ||
Current taxes | (192,486) | (142,940) | ||
Deferred taxes | BRL 3,745 | BRL 78 | ||
[1] | In 2013, substantially all pre tax income and income tax are related to Brazilian Companies. In 2015 and 2014 income before taxes and income tax for continuing operations is as follows: | |||
[2] | Refers to valuation allowance due to change in judgment about the recoverability of deferred tax assets. The change in the beginning-of-the year balance of the valuation allowance due to change in judgment about the recoverability of deferred tax assets amounts to R$2,845,521. |
Schedule of Reconciliation of U
Schedule of Reconciliation of Unrecognized Tax Benefit (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | ||
Balance, beginning of year | $ 84,650 | $ 84,650 |
Increase related to prior year tax position | 165,676 | 0 |
Settlements | (250,326) | 0 |
Balance, end of year | $ 0 | $ 84,650 |
Summary of Significant Componen
Summary of Significant Components of Current and Deferred Taxes (Detail) - BRL BRL in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Rate Reconciliation [Line Items] | |||
Recoverable taxes | BRL 1,062,851 | BRL 1,158,133 | |
Current income taxes payable | 339,624 | 477,282 | |
Income tax and social contribution on tax credits merged goodwill | [1] | 2,423,763 | 1,605,513 |
Income tax and social contribution on temporary differences | [2] | 3,885,435 | 2,499,243 |
Income tax and social contribution on tax loss carryforwards | [2] | 4,134,378 | 3,447,938 |
Total-deferred taxes assets | 10,443,576 | 7,552,694 | |
Business combinations - other intangibles | (3,047,832) | (3,464,404) | |
Pension plan assets | (299,574) | (176,397) | |
Total deferred tax liabilities | (3,347,406) | (3,640,801) | |
Valuation allowance | [2] | (6,239,713) | (217,655) |
Total deferred taxes, net | 856,457 | 3,694,238 | |
Imposto de Renda de Pessoa Juridica (IRPJ) | |||
Income Tax Rate Reconciliation [Line Items] | |||
Recoverable taxes | [3] | 416,125 | 485,929 |
Recoverable social contribution (CSLL) | |||
Income Tax Rate Reconciliation [Line Items] | |||
Recoverable taxes | [3] | 153,059 | 182,772 |
Current income taxes payable | 211,571 | 306,366 | |
IRRF/CSLL-withholding income taxes | |||
Income Tax Rate Reconciliation [Line Items] | |||
Recoverable taxes | [4] | 346,389 | 428,488 |
Income Tax Recoverable | |||
Income Tax Rate Reconciliation [Line Items] | |||
Recoverable taxes | [5] | 147,278 | 60,944 |
Social Corporation Taxes | |||
Income Tax Rate Reconciliation [Line Items] | |||
Current income taxes payable | BRL 128,053 | BRL 170,916 | |
[1] | Refer to: (i) deferred income tax and social contribution assets calculated as tax benefit originating from the goodwill paid on acquisition by the Company and recognized by the merged companies in the course of 2009. The realization of the tax basis arises from the amortization of the goodwill balance based on the STFC license and in the appreciation of property, plant and equipment, the utilization of which is estimated to occur through 2025, and (ii) deferred income tax and social contribution assets originating from the goodwill paid on the acquisition of interests by the Company in 2008-2011, recognized by the companies merged with and into TmarPart and by TmarPart merged with and into the Company on September 1, 2015, which was based on the Company's expected future earnings and the amortization of which is estimated to occur through 2025 (Note 1). | ||
[2] | For the year ended December 31, 2015, total valuation allowance increased from R$217,655 million to R$6,239,713 million, reflecting valuation allowance totaling R$6,022,058 recognized for the companies that, as at December 31, 2015, do not expect to generate sufficient future taxable profits, based on consistent assumptions and timing used in the analysis of the potential impairment of long-lived assets and goodwill, against which tax assets could be offset. Most of our deferred tax assets have been reduced by a valuation allowance to the amount supported by reversing taxable temporary difference. The deferred tax assets not offset by valuation allowance are dependent upon the generation of future pretax income in certain of our tax-paying components in Brazil that have a history of profitability and an expectation of continued profitability. Management believes it is more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets that are not subject to the valuation allowance. However, deferred income tax assets can be reduced in the near term if estimates of future taxable income during the carryforward period are reduced. The net changed in valuation allowance in 2014 was R$217,655. No valuation allowance was recorded prior to 2014. The tax loss carryfowards of approximately R$12,159,935, corresponding to R$4,134,378 million of deferred tax assets, do not expire, and may be carried forward indefinitely. | ||
[3] | Refer mainly to prepaid income tax and social contribution that will be offset against federal taxes payable in the future. | ||
[4] | Refer to corporate income tax credits on short-term investments, related parties loans, government entities, and other that are used as deductions from income tax for the years, and social contribution withheld at source on services provided to government agencies. | ||
[5] | Refer mainly to prior years' prepaid income tax and social contribution that will be offset against federal taxes payable. |
Summary of Significant Compon96
Summary of Significant Components of Current and Deferred Taxes (Parenthetical) (Detail) - BRL BRL in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Valuation allowance | [1] | BRL 6,239,713 | BRL 217,655 |
Impairment losses | 6,022,058 | ||
Tax loss carryfowards | 12,159,935 | ||
Deferred tax assets, that do not expire | BRL 4,134,378,000 | ||
[1] | For the year ended December 31, 2015, total valuation allowance increased from R$217,655 million to R$6,239,713 million, reflecting valuation allowance totaling R$6,022,058 recognized for the companies that, as at December 31, 2015, do not expect to generate sufficient future taxable profits, based on consistent assumptions and timing used in the analysis of the potential impairment of long-lived assets and goodwill, against which tax assets could be offset. Most of our deferred tax assets have been reduced by a valuation allowance to the amount supported by reversing taxable temporary difference. The deferred tax assets not offset by valuation allowance are dependent upon the generation of future pretax income in certain of our tax-paying components in Brazil that have a history of profitability and an expectation of continued profitability. Management believes it is more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets that are not subject to the valuation allowance. However, deferred income tax assets can be reduced in the near term if estimates of future taxable income during the carryforward period are reduced. The net changed in valuation allowance in 2014 was R$217,655. No valuation allowance was recorded prior to 2014. The tax loss carryfowards of approximately R$12,159,935, corresponding to R$4,134,378 million of deferred tax assets, do not expire, and may be carried forward indefinitely. |
Summary of Movements in Deferre
Summary of Movements in Deferred Income Tax (Detail) - BRL BRL in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosures [Line Items] | |||
Contingencies | BRL 1,539,343 | BRL 1,668,750 | |
Allowance for doubtful accounts | 658,870 | 592,279 | |
Profit sharing | 64,243 | 86,534 | |
Foreign exchange differences | 1,778,361 | 556,389 | |
Merged goodwill | 2,423,763 | 1,605,513 | |
Hedge accounting | 207,608 | (63,695) | |
Other temporary items | (362,990) | (341,015) | |
Income tax loss carryforwards | [1] | 4,134,378 | 3,447,938 |
Total-deferred taxes assets | 10,443,576 | 7,552,694 | |
Business combinations - other intangibles | (3,047,832) | (3,464,404) | |
Provisions for pension funds | (299,574) | (176,397) | |
Total deferred tax liabilities | (3,347,406) | (3,640,801) | |
Valuation allowance | [1] | (6,239,713) | (217,655) |
Total net deferred tax | 856,457 | 3,694,238 | |
Recoverable social contribution (CSLL) | |||
Income Tax Disclosures [Line Items] | |||
Income tax loss carryforwards | 3,011,209 | 2,513,846 | |
Social Corporation Taxes | |||
Income Tax Disclosures [Line Items] | |||
Income tax loss carryforwards | 1,123,169 | BRL 934,093 | |
Acquisition Of Investment | |||
Income Tax Disclosures [Line Items] | |||
Contingencies | (129,407) | ||
Allowance for doubtful accounts | 66,591 | ||
Profit sharing | (22,291) | ||
Foreign exchange differences | 1,221,972 | ||
Merged goodwill | (164,517) | ||
Other temporary items | (89,489) | ||
Total-deferred taxes assets | 1,887,683 | ||
Business combinations - other intangibles | 416,572 | ||
Provisions for pension funds | (68,500) | ||
Total deferred tax liabilities | 348,072 | ||
Valuation allowance | (4,755,151) | ||
Total net deferred tax | (2,519,396) | ||
Acquisition Of Investment | Recoverable social contribution (CSLL) | |||
Income Tax Disclosures [Line Items] | |||
Income tax loss carryforwards | 731,485 | ||
Acquisition Of Investment | Social Corporation Taxes | |||
Income Tax Disclosures [Line Items] | |||
Income tax loss carryforwards | 273,339 | ||
Recognized In Deferred Tax [Member] | |||
Income Tax Disclosures [Line Items] | |||
Hedge accounting | 271,303 | ||
Total-deferred taxes assets | 271,303 | ||
Provisions for pension funds | (54,677) | ||
Total deferred tax liabilities | (54,677) | ||
Valuation allowance | (216,626) | ||
Add back Off sets [Member] | |||
Income Tax Disclosures [Line Items] | |||
Merged goodwill | 982,767 | ||
Other temporary items | 67,514 | ||
Total-deferred taxes assets | 731,896 | ||
Valuation allowance | (1,050,281) | ||
Total net deferred tax | (318,385) | ||
Add back Off sets [Member] | Recoverable social contribution (CSLL) | |||
Income Tax Disclosures [Line Items] | |||
Income tax loss carryforwards | (234,122) | ||
Add back Off sets [Member] | Social Corporation Taxes | |||
Income Tax Disclosures [Line Items] | |||
Income tax loss carryforwards | BRL (84,263) | ||
[1] | For the year ended December 31, 2015, total valuation allowance increased from R$217,655 million to R$6,239,713 million, reflecting valuation allowance totaling R$6,022,058 recognized for the companies that, as at December 31, 2015, do not expect to generate sufficient future taxable profits, based on consistent assumptions and timing used in the analysis of the potential impairment of long-lived assets and goodwill, against which tax assets could be offset. Most of our deferred tax assets have been reduced by a valuation allowance to the amount supported by reversing taxable temporary difference. The deferred tax assets not offset by valuation allowance are dependent upon the generation of future pretax income in certain of our tax-paying components in Brazil that have a history of profitability and an expectation of continued profitability. Management believes it is more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets that are not subject to the valuation allowance. However, deferred income tax assets can be reduced in the near term if estimates of future taxable income during the carryforward period are reduced. The net changed in valuation allowance in 2014 was R$217,655. No valuation allowance was recorded prior to 2014. The tax loss carryfowards of approximately R$12,159,935, corresponding to R$4,134,378 million of deferred tax assets, do not expire, and may be carried forward indefinitely. |
Other Taxes (Detail)
Other Taxes (Detail) - BRL BRL in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | |
Taxes [Line Items] | |||
Other taxes, asset, current and non current | BRL 1,582,885 | BRL 1,796,166 | |
Other taxes, asset, current | 922,986 | 1,054,255 | |
Other taxes, asset, non current | 659,899 | 741,911 | |
Other taxes, liability, current and non current | 2,477,988 | 2,542,326 | |
Other taxes, liability, current | 1,553,651 | 1,667,599 | |
Other taxes, liability, non current | 924,337 | 874,727 | |
State VAT (ICMS) | |||
Taxes [Line Items] | |||
Other taxes, asset, current and non current | [1] | 1,285,800 | 1,512,543 |
Other taxes, liability, current and non current | 759,922 | 709,126 | |
Taxes on revenue (PIS and COFINS) | |||
Taxes [Line Items] | |||
Other taxes, asset, current and non current | 200,029 | 181,772 | |
Other taxes, liability, current and non current | 668,888 | 664,278 | |
Other Tax [Member] | |||
Taxes [Line Items] | |||
Other taxes, asset, current and non current | 97,056 | 101,851 | |
Other taxes, liability, current and non current | 153,968 | 281,059 | |
ICMS Agreement No. 69/1998 | |||
Taxes [Line Items] | |||
Other taxes, liability, current and non current | 33,998 | 80,287 | |
FUST/FUNTTEL/broadcasting fees | |||
Taxes [Line Items] | |||
Other taxes, liability, current and non current | BRL 861,212 | BRL 807,576 | |
[1] | Recoverable ICMS arises mostly from prepaid taxes and credits claimed on purchases of property, plant and equipment, which can be offset against ICMS payable within 48 months, pursuant to Supplementary Law 102/2000. |
Judicial Deposits Transactions
Judicial Deposits Transactions (Detail) - BRL BRL in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Deposit Assets | BRL 14,377,357 | BRL 13,393,667 |
Current | 1,258,227 | 1,133,639 |
Non-current | 13,119,130 | 12,260,028 |
Civil | ||
Deposit Assets | 9,459,735 | 8,919,658 |
Tax | ||
Deposit Assets | 2,548,720 | 2,466,187 |
Labor | ||
Deposit Assets | BRL 2,368,902 | BRL 2,007,822 |
Investments (Detail)
Investments (Detail) - BRL BRL in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Investment [Line Items] | |||
Investments | BRL 154,890 | BRL 148,411 | BRL 173,640 |
Joint Arrangements | |||
Investment [Line Items] | |||
Investments | 63,837 | 74,803 | |
Investments | |||
Investment [Line Items] | |||
Investments | 39,003 | 21,558 | |
Tax Incentives, net allowances for loss | |||
Investment [Line Items] | |||
Investments | 31,579 | 31,579 | |
Other Investment | |||
Investment [Line Items] | |||
Investments | BRL 20,471 | BRL 20,471 |
Summary of Movements In Investm
Summary of Movements In Investment Balances (Detail) - BRL BRL in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Investments Schedule [Abstract] | |||
Beginning balance | BRL 148,411 | BRL 173,640 | |
Share of profits of subsidiaries | (21,883) | (5,881) | BRL (17,750) |
Subsidiaries' dividends and interest on capital | (4,968) | ||
Associates' share of other comprehensive income | 11,266 | ||
Other | 17,096 | (14,380) | |
Ending balance | BRL 154,890 | BRL 148,411 | BRL 173,640 |
Property, Plant and Equipmen102
Property, Plant and Equipment (Detail) - BRL BRL in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | ||
Property, Plant and Equipment [Line Items] | |||
Beginning Balance | BRL 109,390,687 | BRL 105,170,221 | |
Beginning Balance | (83,146,378) | (79,445,163) | |
Acquisition of investments - PT Portugal | 40,002,795 | ||
Acquisition of investments - PT Portugal | (28,963,167) | ||
Additions | 3,622,342 | 4,765,387 | |
Write-offs | (690,360) | (198,192) | |
Transfers | (68,853) | ||
Foreign exchange differences | 1,967,894 | ||
Other | 19,285 | ||
Transfers to assets held for sale | (42,248,565) | ||
Ending balance | 112,341,954 | 109,390,687 | |
Depreciation expenses | (4,035,577) | (4,708,856) | |
Write-offs | 666,954 | 119,507 | |
Transfers | 93,663 | ||
Other | (9,132) | ||
Foreign exchange differences | (1,435,586) | ||
Transfers to assets held for sale | 31,193,224 | ||
Ending balance | (86,524,133) | (83,146,378) | |
Beginning Balance | 26,244,309 | ||
Ending balance | 25,817,821 | 26,244,309 | |
Work in Progress | |||
Property, Plant and Equipment [Line Items] | |||
Beginning Balance | 2,657,409 | 4,569,682 | |
Acquisition of investments - PT Portugal | 452,844 | ||
Additions | 2,893,198 | 3,029,820 | |
Write-offs | (2,083) | ||
Transfers | (3,894,026) | (4,944,777) | |
Foreign exchange differences | 20,468 | ||
Transfers to assets held for sale | (468,545) | ||
Ending balance | 1,656,581 | 2,657,409 | |
Beginning Balance | 2,657,409 | ||
Ending balance | 1,656,581 | 2,657,409 | |
Automatic switching equipment | |||
Property, Plant and Equipment [Line Items] | |||
Beginning Balance | 19,808,094 | 19,476,331 | |
Beginning Balance | (17,461,235) | (17,075,110) | |
Acquisition of investments - PT Portugal | 6,004,681 | ||
Acquisition of investments - PT Portugal | (5,685,512) | ||
Additions | 14,274 | 63,899 | |
Write-offs | (4,737) | (4,595) | |
Transfers | 70,070 | 317,773 | |
Foreign exchange differences | 288,829 | ||
Transfers to assets held for sale | (6,338,824) | ||
Ending balance | 19,887,701 | 19,808,094 | |
Depreciation expenses | (399,628) | (458,367) | |
Write-offs | 3,496 | 3,521 | |
Transfers | (29,376) | (3,027) | |
Foreign exchange differences | (275,108) | ||
Transfers to assets held for sale | 6,032,368 | ||
Ending balance | (17,886,743) | (17,461,235) | |
Beginning Balance | 2,346,859 | ||
Ending balance | BRL 2,000,958 | 2,346,859 | |
Annual depreciation rate (average) | 11.00% | ||
Transmission and other equipment | |||
Property, Plant and Equipment [Line Items] | |||
Beginning Balance | [1] | BRL 52,193,041 | 45,332,907 |
Beginning Balance | [1] | (38,856,573) | (34,307,252) |
Acquisition of investments - PT Portugal | [1] | 4,537,199 | |
Acquisition of investments - PT Portugal | [1] | (3,169,003) | |
Additions | [1] | 270,031 | 997,941 |
Write-offs | [1] | (68,650) | (75,547) |
Transfers | [1] | 1,992,540 | 6,045,939 |
Foreign exchange differences | [1] | 255,552 | |
Other | [1] | 135 | |
Transfers to assets held for sale | [1] | (4,900,950) | |
Ending balance | [1] | 54,387,097 | 52,193,041 |
Depreciation expenses | [1] | (2,225,984) | (2,700,926) |
Write-offs | [1] | 66,245 | 61,653 |
Transfers | [1] | 94,258 | (2,132,253) |
Other | [1] | (109) | |
Foreign exchange differences | [1] | (168,315) | |
Transfers to assets held for sale | [1] | 3,559,523 | |
Ending balance | [1] | (40,922,163) | (38,856,573) |
Beginning Balance | [1] | 13,336,468 | |
Ending balance | [1] | BRL 13,464,934 | 13,336,468 |
Annual depreciation rate (average) | [1] | 10.00% | |
Infrastructure | |||
Property, Plant and Equipment [Line Items] | |||
Beginning Balance | BRL 25,455,362 | 26,991,988 | |
Beginning Balance | (20,063,001) | (21,505,346) | |
Acquisition of investments - PT Portugal | 16,357,177 | ||
Acquisition of investments - PT Portugal | (11,029,655) | ||
Additions | 15,792 | 308,985 | |
Write-offs | (521,106) | (105,159) | |
Transfers | 1,502,411 | (1,711,939) | |
Foreign exchange differences | 785,557 | ||
Other | 780 | ||
Transfers to assets held for sale | (17,171,247) | ||
Ending balance | 26,453,239 | 25,455,362 | |
Depreciation expenses | (1,048,933) | (774,053) | |
Write-offs | 519,546 | 51,428 | |
Transfers | (5,608) | 2,022,793 | |
Other | (169) | ||
Foreign exchange differences | (534,544) | ||
Transfers to assets held for sale | 11,706,376 | ||
Ending balance | (20,598,165) | (20,063,001) | |
Beginning Balance | 5,392,361 | ||
Ending balance | BRL 5,855,074 | 5,392,361 | |
Annual depreciation rate (average) | 8.00% | ||
Building and Building Improvements | |||
Property, Plant and Equipment [Line Items] | |||
Beginning Balance | BRL 4,391,214 | 3,598,183 | |
Beginning Balance | (2,441,274) | (2,568,768) | |
Acquisition of investments - PT Portugal | 2,957,154 | ||
Acquisition of investments - PT Portugal | (1,238,292) | ||
Additions | 185,588 | 92,788 | |
Write-offs | (80,208) | (2,146) | |
Transfers | (209,257) | 592,592 | |
Foreign exchange differences | 148,022 | ||
Transfers to assets held for sale | (2,995,379) | ||
Ending balance | 4,287,337 | 4,391,214 | |
Depreciation expenses | (107,140) | (189,874) | |
Write-offs | 63,234 | (5,016) | |
Transfers | 53,913 | 351,649 | |
Other | 0 | ||
Foreign exchange differences | (63,973) | ||
Transfers to assets held for sale | 1,273,000 | ||
Ending balance | (2,431,267) | (2,441,274) | |
Beginning Balance | 1,949,940 | ||
Ending balance | BRL 1,856,070 | 1,949,940 | |
Annual depreciation rate (average) | 8.00% | ||
Other Asset | |||
Property, Plant and Equipment [Line Items] | |||
Beginning Balance | BRL 4,885,567 | 5,201,130 | |
Beginning Balance | (4,324,295) | (3,988,687) | |
Acquisition of investments - PT Portugal | 9,693,740 | ||
Acquisition of investments - PT Portugal | (7,840,705) | ||
Additions | 243,459 | 271,954 | |
Write-offs | (15,659) | (8,662) | |
Transfers | 538,262 | (368,441) | |
Foreign exchange differences | 469,466 | ||
Other | 18,370 | ||
Transfers to assets held for sale | (10,373,620) | ||
Ending balance | 5,669,999 | 4,885,567 | |
Depreciation expenses | (253,892) | (585,636) | |
Write-offs | 14,433 | 7,921 | |
Transfers | (113,187) | (145,499) | |
Other | (8,854) | ||
Foreign exchange differences | (393,646) | ||
Transfers to assets held for sale | 8,621,957 | ||
Ending balance | (4,685,795) | (4,324,295) | |
Beginning Balance | 561,272 | ||
Ending balance | BRL 984,204 | BRL 561,272 | |
Annual depreciation rate (average) | 12.00% | ||
[1] | Transmission and other equipment includes transmission and data communication equipment. |
Property Plant And Equipment -
Property Plant And Equipment - Additional Information (Detail) - BRL BRL in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Abstract] | ||
Residual balance of returnable assets | BRL 8,055,876 | BRL 8,199,356 |
Financial charges and transaction costs capitalized rate | 10.00% | 9.00% |
Financial charges and transaction costs capitalized amount | BRL 15,463 | BRL 60,275 |
Intangible Assets (Detail)
Intangible Assets (Detail) - BRL BRL in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Intangible Assets And Goodwill [Line Items] | ||
Balance at Jan 1, 2014 | BRL 409,012 | BRL 409,012 |
Other | 92,453 | |
Acquisition of investments-PT Portugal | 10,574,704 | |
Foreign exchange differences | 507,532 | |
Transfers to assets held for sale | (11,082,236) | |
Balance in 2014 | 501,465 | 409,012 |
Write-offs | (666,954) | (119,507) |
Ending Balance | 29,406,399 | |
Ending Balance | (15,131,985) | (13,168,466) |
Acquisition of investments-PT Portugal | (3,099,135) | |
Amortization expenses | (1,991,537) | (2,375,669) |
Write-offs | 38,046 | |
Other | (1,276) | |
Transfers | (152,121) | |
Transfers to assets held for sale | 3,625,360 | |
Ending Balance | (17,124,798) | (15,131,985) |
Balance at Jan 1, 2014 | 28,685,806 | 27,834,598 |
Subtotal 2,015 | 12,281,601 | |
Acquisition of investments-PT Portugal | 19,166,766 | |
Impairment Losses | (501,465) | |
Additions | 626,758 | 1,019,053 |
Balance in 2014 | 11,780,136 | 13,553,821 |
Write-offs | (16,605) | |
Transfers | 0 | (31,888) |
Foreign exchange differences | 909,658 | |
Other | 93,835 | |
Transfers to assets held for sale | (20,195,776) | |
Balance in 2014 | 29,406,399 | 28,685,806 |
Subtotal 2,015 | 12,281,601 | |
Balance in 2014 | 11,780,136 | 13,553,821 |
Regulatory Licenses | ||
Intangible Assets And Goodwill [Line Items] | ||
Beginning Balance | 18,992,604 | 18,994,358 |
Acquisition of investments-PT Portugal | 1,656,050 | |
Foreign exchange differences | 78,963 | |
Transfers to assets held for sale | (1,736,767) | |
Ending Balance | 18,992,604 | 18,992,604 |
Ending Balance | (7,849,911) | (6,677,334) |
Acquisition of investments-PT Portugal | (514,850) | |
Amortization expenses | (1,137,568) | (1,210,359) |
Write-offs | 0 | |
Transfers | (26,246) | |
Transfers to assets held for sale | 578,878 | |
Ending Balance | (8,987,479) | (7,849,911) |
Subtotal 2,015 | 10,005,125 | |
Balance in 2014 | BRL 10,005,125 | 11,142,693 |
Annual amortization rate (average) | 9.00% | |
Intangibles In Progress | ||
Intangible Assets And Goodwill [Line Items] | ||
Beginning Balance | BRL 156,718 | 184,387 |
Acquisition of investments-PT Portugal | 52,819 | |
Additions | 438,445 | 487,895 |
Write-offs | (1,574) | |
Transfers | (469,322) | (519,904) |
Foreign exchange differences | 1,256 | |
Transfers to assets held for sale | (48,161) | |
Ending Balance | 125,841 | 156,718 |
Subtotal 2,015 | 125,841 | |
Balance in 2014 | 125,841 | 156,718 |
Data Processing | ||
Intangible Assets And Goodwill [Line Items] | ||
Beginning Balance | 7,310,309 | 6,657,925 |
Acquisition of investments-PT Portugal | 575,983 | |
Additions | 136,982 | 248,470 |
Transfers | 459,078 | 451,615 |
Foreign exchange differences | 44,200 | |
Other | 1,382 | |
Transfers to assets held for sale | (667,884) | |
Ending Balance | 7,907,751 | 7,310,309 |
Ending Balance | (5,874,996) | (5,348,057) |
Acquisition of investments-PT Portugal | (428,721) | |
Amortization expenses | (662,068) | (571,298) |
Write-offs | 11,673 | |
Other | (1,276) | |
Transfers | (28,171) | |
Foreign exchange differences | (260) | |
Transfers to assets held for sale | 489,838 | |
Ending Balance | (6,538,340) | (5,874,996) |
Subtotal 2,015 | 1,369,411 | |
Balance in 2014 | BRL 1,369,411 | 1,435,313 |
Annual amortization rate (average) | 20.00% | |
Customer Portifolio | ||
Intangible Assets And Goodwill [Line Items] | ||
Acquisition of investments-PT Portugal | 3,215,523 | |
Foreign exchange differences | 153,469 | |
Transfers to assets held for sale | (3,368,992) | |
Amortization expenses | (169,982) | |
Transfers | (7,970) | |
Transfers to assets held for sale | 177,952 | |
Others | ||
Intangible Assets And Goodwill [Line Items] | ||
Beginning Balance | BRL 1,817,163 | 1,588,916 |
Acquisition of investments-PT Portugal | 3,091,687 | |
Additions | 51,331 | 282,688 |
Write-offs | (15,031) | |
Transfers | 10,244 | 36,401 |
Foreign exchange differences | 124,238 | |
Transfers to assets held for sale | (3,291,736) | |
Ending Balance | 1,878,738 | 1,817,163 |
Ending Balance | (1,407,078) | (1,143,075) |
Acquisition of investments-PT Portugal | (2,155,564) | |
Amortization expenses | (191,901) | (424,030) |
Write-offs | 26,373 | |
Transfers | (89,734) | |
Foreign exchange differences | 260 | |
Transfers to assets held for sale | 2,378,692 | |
Ending Balance | (1,598,979) | (1,407,078) |
Subtotal 2,015 | 279,759 | |
Balance in 2014 | BRL 279,759 | BRL 410,085 |
Annual amortization rate (average) | 16.00% |
Trade Payables (Detail)
Trade Payables (Detail) - BRL BRL in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Accounts Payable [Line Items] | ||
Trade payables | BRL 5,035,793 | BRL 4,359,785 |
Infrastructure Network And Plant Maintenance Materials | ||
Accounts Payable [Line Items] | ||
Trade payables | 1,282,493 | 1,708,777 |
Service | ||
Accounts Payable [Line Items] | ||
Trade payables | 3,059,394 | 1,985,629 |
Rental Of Polls And Rights -Of- Way | ||
Accounts Payable [Line Items] | ||
Trade payables | 372,103 | 445,642 |
Other | ||
Accounts Payable [Line Items] | ||
Trade payables | BRL 321,803 | BRL 219,737 |
Borrowings and Financings by Ty
Borrowings and Financings by Type (Detail) - BRL BRL in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | ||
Debt Instrument [Line Items] | |||
Senior notes | BRL 38,670,111 | BRL 12,737,364 | |
Subtotal | 60,355,666 | 36,323,195 | |
Incurred debt issuance cost | (498,249) | (473,800) | |
Total | 59,857,417 | 35,849,395 | |
Current | 11,809,598 | 4,463,728 | |
Non-current | 48,047,819 | 31,385,667 | |
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Line of credit | BRL 2,740,267 | ||
Maturity (principal and interest) | 2015-12 | ||
Maturity (principal and interest) | 2016-10 | ||
TIR % | 21.65% | ||
Local Currencies | |||
Debt Instrument [Line Items] | |||
Line of credit | BRL 1,090,716 | 1,136,801 | |
Maturity (principal and interest) | 2015-12 | ||
Maturity (principal and interest) | 2016-09 | ||
TIR % | 11.62% | ||
Foreign Currencies | |||
Debt Instrument [Line Items] | |||
Line of credit | [1] | BRL 37,579,395 | 11,600,563 |
Maturity (principal and interest) | [1] | 2015-12 | |
Maturity (principal and interest) | [1] | 2022-02 | |
TIR % | [1] | 15.24% | |
CCB - Bank Credit Note | |||
Debt Instrument [Line Items] | |||
Line of credit | BRL 2,416,314 | 4,503,810 | |
Maturity (principal and interest) | 2015-12 | ||
Maturity (principal and interest) | 2028-01 | ||
TIR % | 12.08% | ||
Certificates of Real Estate Receivables (CRI) | |||
Debt Instrument [Line Items] | |||
Line of credit | BRL 1,397,504 | 1,496,674 | |
Maturity (principal and interest) | 2015-12 | ||
Maturity (principal and interest) | 2022-08 | ||
TIR % | 14.10% | ||
Development Banks and Export Credit Agencies | |||
Debt Instrument [Line Items] | |||
Line of credit | BRL 10,986,710 | 9,777,958 | |
Maturity (principal and interest) | 2015-12 | ||
Maturity (principal and interest) | 2033-12 | ||
TIR % | 12.28% | ||
Public debentures | |||
Debt Instrument [Line Items] | |||
Line of credit | BRL 4,144,760 | 7,807,389 | |
Maturity (principal and interest) | 2015-12 | ||
Maturity (principal and interest) | 2021-07 | ||
TIR % | 11.82% | ||
Financial Institution | |||
Debt Instrument [Line Items] | |||
Line of credit | BRL 17,540,795 | BRL 15,778,442 | |
[1] | On June 2, 2015, PT Portugal was sold to Altice S.A. As part of the PT Portugal sale process, the debt of PTIF previously classified as liabilities associated to held-for-sale assets remained with Oi, together with cash in similar amount, and was reclassified to the Company's debt. The original debt consists basically of EMTN notes issued, maturing in 2016-2025. |
Breakdown of Debt by Currency (
Breakdown of Debt by Currency (Detail) - BRL BRL in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||
Long term debt | BRL 59,857,417 | BRL 35,849,395 |
Euro | ||
Debt Instrument [Line Items] | ||
Long term debt | 24,221,508 | 2,412,691 |
US dollar | ||
Debt Instrument [Line Items] | ||
Long term debt | 22,713,644 | 12,368,551 |
Brazil, Brazil Real | ||
Debt Instrument [Line Items] | ||
Long term debt | BRL 12,922,265 | BRL 21,068,153 |
Breakdown of Debt by Index (Det
Breakdown of Debt by Index (Detail) - BRL BRL in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||
Longterm debt | BRL 59,857,417 | BRL 35,849,395 |
CDI | ||
Debt Instrument [Line Items] | ||
Longterm debt | 6,347,119 | 9,811,490 |
Fixed Rate | ||
Debt Instrument [Line Items] | ||
Longterm debt | 39,892,444 | 14,146,444 |
LIBOR | ||
Debt Instrument [Line Items] | ||
Longterm debt | 8,812,005 | 2,762,046 |
TJLP | ||
Debt Instrument [Line Items] | ||
Longterm debt | 3,148,581 | 5,149,392 |
IPCA | ||
Debt Instrument [Line Items] | ||
Longterm debt | 1,475,381 | 3,798,431 |
INPC | ||
Debt Instrument [Line Items] | ||
Longterm debt | BRL 181,887 | BRL 181,592 |
Maturity Schedule of Long-Term
Maturity Schedule of Long-Term Debt and Debt Issuance Costs Allocation Schedule (Detail) BRL in Thousands | Dec. 31, 2015BRL |
Long-term Debt, Fiscal Year Maturity [Abstract] | |
2,016 | BRL 11,927,129 |
2,017 | 8,495,856 |
2,018 | 6,532,989 |
2,019 | 7,072,157 |
2,020 | 14,563,635 |
2021 and following years | 11,763,900 |
Total | BRL 60,355,666 |
Loans and Financings - Addition
Loans and Financings - Additional Information (Detail) € in Millions | 1 Months Ended | 12 Months Ended | ||||||||||||||||||||||
Apr. 30, 2016USD ($) | Dec. 31, 2015BRL | Dec. 31, 2015USD ($) | Sep. 30, 2015BRL | Jul. 31, 2015EUR (€)Note | May. 31, 2015BRL | May. 31, 2015USD ($) | Apr. 30, 2015BRL | Apr. 30, 2015USD ($) | Mar. 31, 2015BRL | Mar. 31, 2015USD ($) | Feb. 28, 2015BRL | Feb. 28, 2015USD ($) | Dec. 31, 2015BRLDebentures | Dec. 31, 2014BRL | Dec. 31, 2013BRL | Dec. 31, 2015USD ($) | Jun. 30, 2015EUR (€) | Mar. 30, 2015BRL | Mar. 30, 2015EUR (€) | Oct. 31, 2014USD ($) | May. 31, 2014BRL | Mar. 31, 2013USD ($) | Oct. 31, 2011USD ($) | |
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Senior notes issued, face value | BRL 3,163,000,000 | € 897 | ||||||||||||||||||||||
Senior notes issued | BRL 38,670,111,000 | BRL 38,670,111,000 | BRL 12,737,364,000 | |||||||||||||||||||||
Own debentures acquired | $ | $ 33,000,000 | |||||||||||||||||||||||
Borrowings net of costs | 7,218,639,000 | 2,665,098,000 | BRL 3,434,762,000 | |||||||||||||||||||||
Total amount of guarantees provided as collateral for subsidiaries' financings | 2,684,000,000 | BRL 2,684,000,000 | BRL 19,228,000 | |||||||||||||||||||||
Total gross debt-to-EBITDA ratio | 600.00% | |||||||||||||||||||||||
Revolving Credit Facility | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Borrowings net of costs | BRL 955,700,000 | $ 300,000,000 | BRL 1,167,700,000 | $ 400,000,000 | ||||||||||||||||||||
Financing agreement, amount | $ | $ 1,000,000,000 | |||||||||||||||||||||||
ONDD | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Borrowings net of costs | BRL 123,200,000 | $ 42,800,000 | ||||||||||||||||||||||
Financing agreement, amount | $ | $ 257,000,000 | |||||||||||||||||||||||
Finnish Export Credit Ltd | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Borrowings net of costs | BRL 461,100,000 | $ 141,300,000 | ||||||||||||||||||||||
Financing agreement, amount | $ | $ 397,400,000 | |||||||||||||||||||||||
Banco do Brasil, Bradesco, HSBC, and Santander, Syndicate [Member] | Revolving Credit Facility | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Financing agreement, amount | BRL 1,500,000,000 | |||||||||||||||||||||||
Financing agreement repaid | BRL 1,300,000,000 | |||||||||||||||||||||||
Banco do Nordeste do Brasil | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Borrowings net of costs | 0 | |||||||||||||||||||||||
Financing agreement, amount | BRL 370,600,000 | |||||||||||||||||||||||
China Development Bank Corporation | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Borrowings net of costs | BRL 2,515,000,000 | $ 632,500 | ||||||||||||||||||||||
Financing agreement, amount | $ | $ 1,200,000,000 | |||||||||||||||||||||||
5.625 % Senior Note Maturing in 2021 | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Senior notes issued, face value | € | € 600 | |||||||||||||||||||||||
Senior notes issued, interest rate | 5.625% | |||||||||||||||||||||||
Senior Notes Maturing in February 2016 | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Senior notes issued, interest rate | 5.625% | |||||||||||||||||||||||
Senior notes repurchased | € | € 148 | |||||||||||||||||||||||
Senior Notes Maturing in December 2017 | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Senior notes issued, face value | € | € 173 | |||||||||||||||||||||||
Senior notes issued, interest rate | 5.125% | |||||||||||||||||||||||
Senior Notes Maturing in March 2017 | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Senior notes issued, interest rate | 5.242% | |||||||||||||||||||||||
Senior Notes Issued July Twenty Twelve | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Number of Notes rebought for immediate cancelation | Note | 169,793 | |||||||||||||||||||||||
Senior notes issued | € | € 400 | |||||||||||||||||||||||
9th Issue 1st Series | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Number of debentures bought and immediately canceled | Debentures | 38,965 | |||||||||||||||||||||||
9th Issue 2nd Series | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Number of debentures bought and immediately canceled | Debentures | 155,713 | |||||||||||||||||||||||
5th Issue 2nd Series | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Number of debentures bought and immediately canceled | Debentures | 24,002 | |||||||||||||||||||||||
7th Issue | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Number of debentures bought and immediately canceled | Debentures | 100 | |||||||||||||||||||||||
Exportkreditnamnden (EKN) | Subsequent Event | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Principal amount outstanding | $ | $ 202,000,000 |
Derivative Financial Instrum111
Derivative Financial Instruments (Detail) - BRL BRL in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Derivative assets | ||
Derivative assets | BRL 7,386,703 | BRL 3,221,481 |
Derivative assets, Current | 606,387 | 340,558 |
Derivative assets, Non-current | 6,780,316 | 2,880,923 |
Derivative liabilities | ||
Derivative liabilities | 2,510,343 | 666,922 |
Derivative liabilities, Current | 1,988,948 | 523,951 |
Derivative liabilities, Non-current | 521,395 | 142,971 |
Currency Swap | ||
Derivative assets | ||
Derivative assets | 6,805,084 | 2,871,904 |
Derivative liabilities | ||
Derivative liabilities | 1,197,157 | 413,573 |
Interest Rate Swap | ||
Derivative assets | ||
Derivative assets | 445,740 | 196,017 |
Derivative liabilities | ||
Derivative liabilities | 594,433 | 241,138 |
Forward Contracts | ||
Derivative assets | ||
Derivative assets | 102,329 | 153,560 |
Derivative liabilities | ||
Derivative liabilities | 686,488 | BRL 12,211 |
Options Held | ||
Derivative assets | ||
Derivative assets | 33,550 | |
Derivative liabilities | ||
Derivative liabilities | BRL 32,265 |
Licenses And Concession Payable
Licenses And Concession Payables (Detail) - BRL BRL in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Accounts Payable and Accrued Liabilities [Line Items] | ||
Licenses and concessions payable | BRL 918,537 | BRL 1,361,940 |
Licenses and concessions payable, current | 911,930 | 675,965 |
Licenses and concessions payable, non current | 6,607 | 685,975 |
SMP | ||
Accounts Payable and Accrued Liabilities [Line Items] | ||
Licenses and concessions payable | 905,601 | 1,238,209 |
STFC Concessions | ||
Accounts Payable and Accrued Liabilities [Line Items] | ||
Licenses and concessions payable | BRL 12,936 | BRL 123,731 |
Payment Schedule (Detail)
Payment Schedule (Detail) - BRL BRL in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Payables and Accruals [Abstract] | ||
2,016 | BRL 911,930 | |
2,017 | 3,147 | |
2,018 | 3,147 | |
2,019 | 313 | |
Total | BRL 918,537 | BRL 1,361,940 |
Outstanding Balance of Tax Debt
Outstanding Balance of Tax Debt Refinancing Program (Detail) - BRL BRL in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax [Line Items] | |||
Tax debt refinancing program payable | [1] | BRL 795,088 | BRL 990,230 |
Current | 78,432 | 94,041 | |
Non-current | 716,656 | 896,189 | |
Law 11941/09 and Law 12865/2013 tax financing program | |||
Income Tax [Line Items] | |||
Tax debt refinancing program payable | 791,696 | 983,904 | |
REFIS II - PAES | |||
Income Tax [Line Items] | |||
Tax debt refinancing program payable | BRL 3,392 | BRL 6,326 | |
[1] | The licenses and concessions payable, the tax refinancing program, and other obligations (payable for the acquisition of equity interest) are stated at the amounts that these obligations are expected to be settled and are not adjusted to fair value. |
Tax Financing Program - Compone
Tax Financing Program - Components of Tax Debt Refinancing Program (Detail) - BRL BRL in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | |
Investments, Owned, Federal Income Tax Note [Line Items] | |||
Principal | BRL 358,952 | ||
Fines | 23,660 | ||
Interest | 412,476 | ||
Total | [1] | 795,088 | BRL 990,230 |
Tax on revenue (COFINS) | |||
Investments, Owned, Federal Income Tax Note [Line Items] | |||
Principal | 176,567 | ||
Fines | 6,762 | ||
Interest | 203,899 | ||
Total | 387,228 | 563,846 | |
Income tax | |||
Investments, Owned, Federal Income Tax Note [Line Items] | |||
Principal | 42,576 | ||
Fines | 4,201 | ||
Interest | 54,120 | ||
Total | 100,897 | 119,447 | |
Tax on revenue (PIS) | |||
Investments, Owned, Federal Income Tax Note [Line Items] | |||
Principal | 64,756 | ||
Fines | 1,266 | ||
Interest | 38,116 | ||
Total | 104,138 | 102,598 | |
Social security (INSS - SAT) | |||
Investments, Owned, Federal Income Tax Note [Line Items] | |||
Principal | 527 | ||
Fines | 2,675 | ||
Interest | 6,679 | ||
Total | 9,881 | 13,852 | |
Social Contribution | |||
Investments, Owned, Federal Income Tax Note [Line Items] | |||
Principal | 10,414 | ||
Fines | 1,362 | ||
Interest | 13,875 | ||
Total | 25,651 | 30,985 | |
Tax on banking transactions (CPMF) | |||
Investments, Owned, Federal Income Tax Note [Line Items] | |||
Principal | 19,196 | ||
Fines | 2,156 | ||
Interest | 26,959 | ||
Total | 48,311 | 39,717 | |
Other | |||
Investments, Owned, Federal Income Tax Note [Line Items] | |||
Principal | 44,916 | ||
Fines | 5,238 | ||
Interest | 68,828 | ||
Total | BRL 118,982 | BRL 119,785 | |
[1] | The licenses and concessions payable, the tax refinancing program, and other obligations (payable for the acquisition of equity interest) are stated at the amounts that these obligations are expected to be settled and are not adjusted to fair value. |
Tax Financing Program - Payment
Tax Financing Program - Payment Schedule of Tax Debt Refinancing Program (Detail) - BRL BRL in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
2,016 | BRL 78,432 | ||
2,017 | 90,010 | ||
2,018 | 90,010 | ||
2,019 | 90,010 | ||
2,020 | 90,010 | ||
2021 to 2023 | 270,030 | ||
2024 to 2025 | 86,586 | ||
Total | [1] | BRL 795,088 | BRL 990,230 |
[1] | The licenses and concessions payable, the tax refinancing program, and other obligations (payable for the acquisition of equity interest) are stated at the amounts that these obligations are expected to be settled and are not adjusted to fair value. |
Tax Financing Program - Additio
Tax Financing Program - Additional Information (Detail) BRL in Thousands | 1 Months Ended | 12 Months Ended |
Dec. 31, 2014BRL | Dec. 31, 2015BRLInstallment | |
Investments, Owned, Federal Income Tax Note [Line Items] | ||
Number of installments under refinancing plans | Installment | 180 | |
Tax refinancing programs requirements | Companies are required to ensure the timely payment of all the installments and will be excluded from the program if they have three installments outstanding, whether consecutive or otherwise, or fail to pay one installment, if all the others have been paid. | |
Reduction in tax liabilities, reversal | BRL 168,541 | |
Percentage of tax debts that can be offset against own tax carry forwards | 70.00% | |
Tax debts offset by loss carry forwards | BRL 302,014 | |
Percentage of tax debts settled in cash | 30.00% | |
Tax debts settled in cash | BRL 109,765 | |
Consolidated Basis | ||
Investments, Owned, Federal Income Tax Note [Line Items] | ||
Tax debts offset by loss carry forwards | 256,118 | |
Tax debts settled in cash | BRL 129,435 |
Contingencies Broken down (Deta
Contingencies Broken down (Detail) - BRL BRL in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Loss Contingencies [Line Items] | |||
Total provisions | BRL 4,434,966 | BRL 5,131,768 | BRL 5,616,317 |
Current | 1,020,994 | 1,058,521 | |
Non-current | 3,413,972 | 4,073,247 | |
Overtime | |||
Loss Contingencies [Line Items] | |||
Total provisions | 329,510 | 471,506 | |
Sundry premiums | |||
Loss Contingencies [Line Items] | |||
Total provisions | 110,664 | 131,963 | |
Indemnities | |||
Loss Contingencies [Line Items] | |||
Total provisions | 99,607 | 152,113 | |
Stability/reintegration | |||
Loss Contingencies [Line Items] | |||
Total provisions | 97,783 | 126,070 | |
Additional post-retirement benefits | |||
Loss Contingencies [Line Items] | |||
Total provisions | 70,942 | 83,417 | |
Salary differences and related effects | |||
Loss Contingencies [Line Items] | |||
Total provisions | 38,013 | 52,852 | |
Lawyer/expert fees | |||
Loss Contingencies [Line Items] | |||
Total provisions | 25,291 | 29,382 | |
Severance pay | |||
Loss Contingencies [Line Items] | |||
Total provisions | 15,016 | 20,235 | |
Labor fines | |||
Loss Contingencies [Line Items] | |||
Total provisions | 10,275 | 15,562 | |
Employment relationship | |||
Loss Contingencies [Line Items] | |||
Total provisions | 6,967 | 5,717 | |
Severance Pay Fund (FGTS) [Member] | |||
Loss Contingencies [Line Items] | |||
Total provisions | 6,694 | 9,359 | |
Joint liability | |||
Loss Contingencies [Line Items] | |||
Total provisions | 610 | 1,581 | |
Other labor claims | |||
Loss Contingencies [Line Items] | |||
Total provisions | 38,105 | 55,267 | |
Labor contingencies | |||
Loss Contingencies [Line Items] | |||
Total provisions | 849,477 | 1,155,024 | 1,142,274 |
State VAT (ICMS) | |||
Loss Contingencies [Line Items] | |||
Total provisions | 308,144 | 363,025 | |
Tax on services (ISS) | |||
Loss Contingencies [Line Items] | |||
Total provisions | 71,201 | 71,666 | |
INSS (joint liability, fees, and severance pay) | |||
Loss Contingencies [Line Items] | |||
Total provisions | 29,394 | 31,735 | |
Tax on net income (ILL) | |||
Loss Contingencies [Line Items] | |||
Total provisions | 6,882 | 20,691 | |
Other tax claims | |||
Loss Contingencies [Line Items] | |||
Total provisions | 76,736 | 45,504 | |
Tax contingencies | |||
Loss Contingencies [Line Items] | |||
Total provisions | 492,357 | 532,621 | 640,372 |
Corporate | |||
Loss Contingencies [Line Items] | |||
Total provisions | 1,111,742 | 1,549,525 | |
ANATEL | |||
Loss Contingencies [Line Items] | |||
Total provisions | 1,148,621 | 1,104,163 | |
Small claims courts | |||
Loss Contingencies [Line Items] | |||
Total provisions | 361,474 | 282,209 | |
Other civil claims | |||
Loss Contingencies [Line Items] | |||
Total provisions | 471,295 | 508,226 | |
Civil contingencies | |||
Loss Contingencies [Line Items] | |||
Total provisions | BRL 3,093,132 | BRL 3,444,123 | BRL 3,833,671 |
Contingencies - Contingent Liab
Contingencies - Contingent Liabilities, By Nature (Detail) - BRL BRL in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Loss Contingencies [Line Items] | ||
Contingent liabilities with possible unfavorable outcome | BRL 26,065,584 | BRL 23,288,431 |
Labor contingencies | ||
Loss Contingencies [Line Items] | ||
Contingent liabilities with possible unfavorable outcome | 779,776 | 1,082,677 |
Tax contingencies | ||
Loss Contingencies [Line Items] | ||
Contingent liabilities with possible unfavorable outcome | 24,047,529 | 21,059,009 |
Civil contingencies | ||
Loss Contingencies [Line Items] | ||
Contingent liabilities with possible unfavorable outcome | BRL 1,238,279 | BRL 1,146,745 |
Contingencies - Summary of Move
Contingencies - Summary of Movements In Provision Balances (Detail) - BRL BRL in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Loss Contingency Accrual [Roll Forward] | ||
Balance at Jan 1, 2014 | BRL 5,131,768 | BRL 5,616,317 |
Merger of TmarPart and subsidiaries | 13,902 | |
Acquisition of investments-PT Portugal | 141,709 | |
Inflation adjustment | 176,297 | 233,276 |
Additions/(reversals) | 566,617 | 470,597 |
Write-offs for payment/terminations | (1,453,618) | (1,181,613) |
Foreign exchange differences | 110 | |
Liabilities on held-for-sale assets | (148,628) | |
Balance in 2014 | 4,434,966 | 5,131,768 |
Labor contingencies | ||
Loss Contingency Accrual [Roll Forward] | ||
Balance at Jan 1, 2014 | 1,155,024 | 1,142,274 |
Merger of TmarPart and subsidiaries | 6,987 | |
Acquisition of investments-PT Portugal | 7,471 | |
Inflation adjustment | (15,016) | 147,825 |
Additions/(reversals) | (113,636) | 116,230 |
Write-offs for payment/terminations | (183,882) | (250,830) |
Foreign exchange differences | 5 | |
Liabilities on held-for-sale assets | (7,951) | |
Balance in 2014 | 849,477 | 1,155,024 |
Tax contingencies | ||
Loss Contingency Accrual [Roll Forward] | ||
Balance at Jan 1, 2014 | 532,621 | 640,372 |
Merger of TmarPart and subsidiaries | 6,130 | |
Acquisition of investments-PT Portugal | 86,198 | |
Inflation adjustment | 33,053 | (29,680) |
Additions/(reversals) | 44,325 | 13,895 |
Write-offs for payment/terminations | (123,772) | (82,593) |
Foreign exchange differences | 69 | |
Liabilities on held-for-sale assets | (95,640) | |
Balance in 2014 | 492,357 | 532,621 |
Civil contingencies | ||
Loss Contingency Accrual [Roll Forward] | ||
Balance at Jan 1, 2014 | 3,444,123 | 3,833,671 |
Merger of TmarPart and subsidiaries | 785 | |
Acquisition of investments-PT Portugal | 48,040 | |
Inflation adjustment | 158,260 | 115,131 |
Additions/(reversals) | 635,928 | 340,472 |
Write-offs for payment/terminations | (1,145,964) | (848,190) |
Foreign exchange differences | 36 | |
Liabilities on held-for-sale assets | (45,037) | |
Balance in 2014 | BRL 3,093,132 | BRL 3,444,123 |
Contingencies - Additional Info
Contingencies - Additional Information (Detail) - BRL BRL in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Loss Contingencies [Line Items] | ||
Additions/(reversals) | BRL 566,617 | BRL 470,597 |
Contingent liabilities with possible unfavorable outcome | 26,065,584 | 23,288,431 |
Contracted guarantees and guarantee insurance | 15,577,522 | 16,488,245 |
Oi. S.A. | ||
Loss Contingencies [Line Items] | ||
Contracted guarantees and guarantee insurance | 5,394,597 | 5,816,071 |
Corporate | ||
Loss Contingencies [Line Items] | ||
Additions/(reversals) | 325,709 | |
ANATEL | ||
Loss Contingencies [Line Items] | ||
Estimated and imposed fines | 5,000,000 | |
ANATEL | Fines Imposed | ||
Loss Contingencies [Line Items] | ||
Estimated and imposed fines | 3,000,000 | |
ANATEL | Estimated Fines | ||
Loss Contingencies [Line Items] | ||
Estimated and imposed fines | 2,000,000 | |
Labor contingencies | ||
Loss Contingencies [Line Items] | ||
Additions/(reversals) | (113,636) | 116,230 |
Contingent liabilities with possible unfavorable outcome | 779,776 | 1,082,677 |
Tax on services (ISS) | ||
Loss Contingencies [Line Items] | ||
Contingent liabilities with possible unfavorable outcome | 2,908,031 | 2,588,849 |
INSS (joint liability, fees, and severance pay) | ||
Loss Contingencies [Line Items] | ||
Contingent liabilities with possible unfavorable outcome | 1,029,470 | 995,994 |
Federal Taxes | ||
Loss Contingencies [Line Items] | ||
Contingent liabilities with possible unfavorable outcome | 9,965,543 | 9,919,745 |
Civil contingencies | ||
Loss Contingencies [Line Items] | ||
Additions/(reversals) | 635,928 | 340,472 |
Contingent liabilities with possible unfavorable outcome | 1,238,279 | 1,146,745 |
State VAT (ICMS) | ||
Loss Contingencies [Line Items] | ||
Contingent liabilities with possible unfavorable outcome | BRL 10,144,485 | BRL 7,554,421 |
Other Payables (Detail)
Other Payables (Detail) - BRL BRL in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | |
Other Liabilities Disclosure [Abstract] | |||
Unearned revenues | [1] | BRL 2,039,183 | BRL 2,475,391 |
Advances from customers | 767,905 | 635,681 | |
Provisions for indemnities payable (Note 26) | 668,534 | ||
Payable for the acquisition of equity interest | 382,230 | 408,978 | |
Consignation to third parties | 43,160 | 43,062 | |
Provision for asset decommissioning | 15,437 | 14,835 | |
Other | 356,088 | 46,328 | |
Other Payabels | 4,272,537 | 3,624,275 | |
Other payables, current | 1,219,624 | 1,021,719 | |
Other payables, non-current | 3,052,913 | 2,602,556 | |
Other payables | BRL 4,272,537 | BRL 3,624,275 | |
[1] | Primarily refers (1) amounts received in advance for the assignment of the right to the commercial operation and use of infrastructure assets that are recognized in revenues over the effective period of the underlying agreements and (2) prepaid mobile telephony services that are recognized in revenue when the customers use the services. |
Equity - Additional Information
Equity - Additional Information (Detail) € in Millions | Feb. 25, 2015BRL | Dec. 31, 2015BRLshares | Dec. 31, 2014BRLshares | Dec. 31, 2013BRLshares | Sep. 01, 2015BRL | Mar. 30, 2015BRLshares | Mar. 30, 2015EUR (€)shares | May. 05, 2014BRL | Feb. 27, 2012shares |
Shareholders Equity [Line Items] | |||||||||
Subscribed and paid-in capital | BRL 21,438,374,000 | BRL 21,438,220,000 | BRL 21,431,109,000 | ||||||
Maximum amount of shares capital authorized | BRL 34,038,701,741,490 | ||||||||
Legal top limit for the issuance of new non voting preferred stock | 66.70% | ||||||||
Increase in capital | BRL 154,000 | ||||||||
Treasury shares | BRL 5,531,092,000 | BRL 2,367,552,000 | |||||||
Treasury shares | shares | 150,094,000 | 15,706,000 | |||||||
Securities issued in exchange | BRL 3,163,000,000 | € 897 | |||||||
Increase in net asset related to merger of TmarPart | BRL 1,105,180,000 | ||||||||
Preferred dividend description | Preferred shares are nonvoting, except in the cases specified in paragraphs 1-3 of Article 12 of the Bylaws, but are assured priority in the payment of the noncumulative minimum dividends equal to the higher of 6% per year of the amount obtained by dividing capital stock by the total number of shares of the Company or 3% per year of the amount obtained by dividing book equity by the total number of shares of the Company. | ||||||||
Allocation of loss | BRL 4,407,711,000 | ||||||||
Allocated loss | BRL (9,159,343,000) | (4,781,720,000) | BRL 604,423,000 | ||||||
Share issuance costs | 377,429,000 | BRL 253,045,000 | |||||||
Share issuance costs, taxes | 194,464,000 | ||||||||
Amount subject to Allocation | |||||||||
Shareholders Equity [Line Items] | |||||||||
Allocated loss | (4,934,908,000) | ||||||||
Reclassifications | |||||||||
Shareholders Equity [Line Items] | |||||||||
Treasury shares | BRL 263,028,000 | ||||||||
Common Stock | |||||||||
Shareholders Equity [Line Items] | |||||||||
Treasury stock held | shares | 24,647,867 | ||||||||
Treasury shares | BRL 5,208,938,000 | BRL 880,378,000 | |||||||
Treasury shares | shares | 148,282,000 | 8,425,000 | 84,251,000 | 474,348,720 | 474,348,720 | ||||
Allocated loss | BRL (3,947,142,000) | BRL (1,569,149,000) | BRL 189,711,000 | ||||||
Common Stock | Reverse Stock Split | |||||||||
Shareholders Equity [Line Items] | |||||||||
Treasury shares | shares | 47,434,872 | 47,434,872 | |||||||
Preferred Stock | |||||||||
Shareholders Equity [Line Items] | |||||||||
Treasury shares | BRL 59,125,000 | BRL 1,224,146,000 | |||||||
Treasury shares | shares | 1,812,000 | 7,281,000 | 72,808,000 | 948,697,440 | 948,697,440 | ||||
Allocated loss | BRL (5,212,201,000) | BRL (3,212,571,000) | BRL 414,712,000 | ||||||
Preferred Stock | Reverse Stock Split | |||||||||
Shareholders Equity [Line Items] | |||||||||
Treasury shares | shares | 94,869,744 | 94,869,744 | |||||||
Capital Reserve | |||||||||
Shareholders Equity [Line Items] | |||||||||
Allocation of loss | 383,527,000 | ||||||||
Accumulated losses | |||||||||
Shareholders Equity [Line Items] | |||||||||
Allocation of loss | BRL 4,024,184,000 |
Equity - Share Capital (Detail)
Equity - Share Capital (Detail) - shares | Dec. 31, 2015 | Mar. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Class of Stock [Line Items] | ||||
Common shares | 668,034,000 | 286,155,000 | ||
Preferred shares | 157,727,000 | 572,317,000 | ||
Total | 825,761,000 | 858,472,000 | ||
Treasury shares | 150,094,000 | 15,706,000 | ||
Common shares outstanding | 519,752,000 | 277,730,000 | ||
Preferred shares outstanding | 155,915,000 | 565,036,000 | ||
Total outstanding shares | 675,667,000 | 842,766,000 | ||
Common Stock | ||||
Class of Stock [Line Items] | ||||
Treasury shares | 148,282,000 | 474,348,720 | 8,425,000 | 84,251,000 |
Preferred Stock | ||||
Class of Stock [Line Items] | ||||
Treasury shares | 1,812,000 | 948,697,440 | 7,281,000 | 72,808,000 |
Equity - Treasury Stock (Detail
Equity - Treasury Stock (Detail) - BRL shares in Thousands, BRL in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Equity, Class of Treasury Stock [Line Items] | ||
Balance, shares | 15,706 | |
Balance, shares | 150,094 | 15,706 |
Balance, value | BRL 2,367,552 | |
Share exchange | BRL 263,028 | |
Balance, value | BRL 5,531,092 | BRL 2,367,552 |
Common Stock | ||
Equity, Class of Treasury Stock [Line Items] | ||
Balance, shares | 8,425 | 84,251 |
Share exchange | 47,435 | |
Reverse share split | (75,826) | |
Share conversion | 92,422 | |
Balance, shares | 148,282 | 8,425 |
Balance, value | BRL 880,378 | |
Share exchange | BRL 1,054,513 | |
Share conversion | 3,274,047 | |
Balance, value | BRL 5,208,938 | |
Preferred Stock | ||
Equity, Class of Treasury Stock [Line Items] | ||
Balance, shares | 7,281 | 72,808 |
Share exchange | 94,870 | |
Reverse share split | (65,527) | |
Share conversion | (100,339) | |
Balance, shares | 1,812 | 7,281 |
Balance, value | BRL 1,224,146 | |
Share exchange | BRL 2,109,026 | |
Share conversion | (3,274,047) | |
Balance, value | BRL 59,125 |
Equity - Historical Cost In Pur
Equity - Historical Cost In Purchase of Treasury Shares (Detail) - BRL / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Equity, Class of Treasury Stock [Line Items] | ||
Historical cost in purchase of treasury shares, weighted average | BRL 13.40 | BRL 13.40 |
Minimum | ||
Equity, Class of Treasury Stock [Line Items] | ||
Historical cost in purchase of treasury shares | 3.79 | 3.79 |
Maximum | ||
Equity, Class of Treasury Stock [Line Items] | ||
Historical cost in purchase of treasury shares | BRL 15.25 | BRL 15.25 |
Liabilities For Pension Bene127
Liabilities For Pension Benefits - Underfunded Status (Detail) - BRL BRL in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plans | BRL 544,020 | BRL 476,535 | |
Defined benefit plans, current | 144,589 | 129,662 | |
Defined benefit plans, non-current | 399,431 | 346,873 | |
BrTREV Plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plans | 399,754 | 473,554 | |
BrTREV Plans | Financing Obligation | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plans | [1] | 141,681 | |
PAMEC Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plans | BRL 2,585 | BRL 2,981 | |
[1] | Represented by the agreement of financial obligations, entered into by the Company and Fundação Atlântico intended for the payment of the mathematical provision without coverage by the plan's assets. This obligation represents the additional commitment between the provision recognized pursuant to the actuarial assumptions and the financial obligations agreement calculated based on the laws applicable to close-end pension funds, regulated by PREVIC. |
Liabilities For Pension Bene128
Liabilities For Pension Benefits - Over Funded Status (Detail) - BRL BRL in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Defined Benefit Plan Disclosure [Line Items] | ||
Total | BRL 1,529,947 | BRL 1,105,081 |
Current | 753 | 1,744 |
Non-current | 1,529,194 | 1,103,337 |
TCSPREV plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total | 1,061,456 | 932,403 |
TelemarPrev Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total | 482,938 | 237,308 |
PBS-Telemar Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total | 33,477 | 10,104 |
Other Pension Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total | BRL (47,924) | BRL (74,734) |
Liabilities For Pension Bene129
Liabilities For Pension Benefits - Additional Information (Detail) BRL in Thousands, $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2016USD ($) | Dec. 31, 2015BRL | Dec. 31, 2015USD ($) | Dec. 31, 2014BRL | Dec. 31, 2013BRL | Oct. 31, 2015BRL | |
Defined Benefit Plan Disclosure [Line Items] | ||||||
Share-based Compensation Expense | $ | $ 0 | |||||
Deferred Profit Sharing | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Provisions for employee profit sharing | BRL 210,054 | |||||
SISTEL | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Surpluses of benefit plan amount | BRL (3,042,000) | |||||
Transferred amount related to plan sponsored by company | BRL 2,127,000 | |||||
SISTEL | Scenario, Forecast | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Company's contributions | $ | $ 30 | |||||
FATL | Scenario, Forecast | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Company's contributions | $ | $ 144,598 | |||||
Oi. S.A. | Deferred Profit Sharing | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Provisions for employee profit sharing | BRL 70,199 | |||||
BrTREV Plans | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Defined contribution pension Benefit Plan, description | The monthly, mandatory Basic Contribution of the BrTPREV group Participants corresponds to the product obtained, in whole numbers, by applying a percentage to the Contribution Salary (SP), according to the Participant’s age and option, as follows: (i) Age up to 25 years old - Basic Contribution cohort of 3 and 8 percent of the SP; (ii) Age 26 to 30 years old - Basic Contribution cohort of 4 to 8 percent of the SP; (iii) Age 31 to 35 years old - Basic Contribution cohort of 5 to 8 percent of the SP; (iv) Age 36 to 40 years old - Basic Contribution cohort of 6 to 8 percent of the SP; (v) Age 41 to 45 years old - Basic Contribution cohort of 7 to 8 percent of the SP; and (vi) Age 46 years old or more - Basic Contribution cohort of 8 percent of the SP. | The monthly, mandatory Basic Contribution of the BrTPREV group Participants corresponds to the product obtained, in whole numbers, by applying a percentage to the Contribution Salary (SP), according to the Participant’s age and option, as follows: (i) Age up to 25 years old - Basic Contribution cohort of 3 and 8 percent of the SP; (ii) Age 26 to 30 years old - Basic Contribution cohort of 4 to 8 percent of the SP; (iii) Age 31 to 35 years old - Basic Contribution cohort of 5 to 8 percent of the SP; (iv) Age 36 to 40 years old - Basic Contribution cohort of 6 to 8 percent of the SP; (v) Age 41 to 45 years old - Basic Contribution cohort of 7 to 8 percent of the SP; and (vi) Age 46 years old or more - Basic Contribution cohort of 8 percent of the SP. | ||||
Transferred amount related to plan sponsored by company | BRL 1,600,999 | BRL 1,550,295 | BRL 1,301,556 | |||
Company's contributions | BRL 139,935 | 123,304 | ||||
Allocation of plan assets | 100.00% | 100.00% | ||||
BrTREV Plans | Exclusive Investment Funds | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Allocation of plan assets | 5.21% | 5.21% | ||||
PBS-Telemar Plan | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Defined contribution pension Benefit Plan, description | The contributions from Active Participants of the PBS-Telemar Benefit Plan correspond to the sum of (i) 0.5 to 1.5 percent of the Contribution Salary (according to the participant's age on enrollment date); (ii) 1% of Contribution Salary that exceeds half of one Standard Unit; and (iii) 11% of the Contribution Salary that exceeds one Standard Unit. The Sponsors' contributions are equivalent to 8% of the payroll of active participants of the plan. | The contributions from Active Participants of the PBS-Telemar Benefit Plan correspond to the sum of (i) 0.5 to 1.5 percent of the Contribution Salary (according to the participant's age on enrollment date); (ii) 1% of Contribution Salary that exceeds half of one Standard Unit; and (iii) 11% of the Contribution Salary that exceeds one Standard Unit. The Sponsors' contributions are equivalent to 8% of the payroll of active participants of the plan. | ||||
Transferred amount related to plan sponsored by company | BRL 277,624 | 257,937 | 264,224 | |||
Company's contributions | BRL 71 | 77 | ||||
Allocation of plan assets | 100.00% | 100.00% | ||||
Mathematical reserves, annual readjustment interest rate | 6.00% | 6.00% | ||||
PBS-Telemar Plan | Debt Securities | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Allocation of plan assets | 88.00% | 88.00% | ||||
PBS-Telemar Plan | Exclusive Investment Funds | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Allocation of plan assets | 9.12% | 9.12% | ||||
TelemarPrev Plan | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Defined contribution pension Benefit Plan, description | A participant's regular contribution is comprised of two portions (i) basic-equivalent to 2% of the contribution salary; and (ii) standard - equivalent to 3% of the positive difference between the total contribution salary and the social security contribution. The additional extraordinary contributions from participants are optional and can be made in multiples of 0.5% of the Contribution Salary, for a period of not less than six (6) months. | A participant's regular contribution is comprised of two portions (i) basic-equivalent to 2% of the contribution salary; and (ii) standard - equivalent to 3% of the positive difference between the total contribution salary and the social security contribution. The additional extraordinary contributions from participants are optional and can be made in multiples of 0.5% of the Contribution Salary, for a period of not less than six (6) months. | ||||
Maximum limit of contribution salary | 8.00% | 8.00% | ||||
Transferred amount related to plan sponsored by company | BRL 3,275,485 | 3,123,052 | 3,204,535 | |||
Allocation of plan assets | 100.00% | 100.00% | ||||
TelemarPrev Plan | Debt Securities | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Allocation of plan assets | 91.00% | 91.00% | ||||
TelemarPrev Plan | Exclusive Investment Funds | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Allocation of plan assets | 5.08% | 5.08% | ||||
TelemarPrev Plan | Exclusive Investment Funds | BRAZIL | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Allocation of plan assets | 5.00% | 5.00% | ||||
TelemarPrev Plan | Real Estate And Other Assets | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Allocation of plan assets | 4.00% | 4.00% | ||||
CELPREV plan | SISTEL | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Surpluses of benefit plan amount | BRL 2,412 | |||||
PAMA Plan | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Surpluses of benefit plan amount | BRL 1,154,176 | |||||
TCSPREV plan | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Defined contribution pension Benefit Plan, description | The monthly, mandatory Basic Contribution of the TCSPREV group Participants corresponds to the product obtained, in whole numbers, by applying a percentage, chosen by the Participant, to the Contribution Salary (SP) as follows: (i) Age up to 25 years old—basic contribution cohort of 3 and 8 percent of the SP; (ii) Age 26 to 30 years old—basic contribution cohort of 4 to 8 percent of the SP; (iii) Age 31 to 35 years old—basic contribution cohort of 5 to 8 percent of the SP; (iv) Age 36 to 40 years old—basic contribution cohort of 6 to 8 percent of the SP; (v) Age 41 to 45 years old—basic contribution cohort of 7 to 8 percent of the SP; and (vi) Age 46 years old or more—basic contribution cohort of 8 percent of the SP. | The monthly, mandatory Basic Contribution of the TCSPREV group Participants corresponds to the product obtained, in whole numbers, by applying a percentage, chosen by the Participant, to the Contribution Salary (SP) as follows: (i) Age up to 25 years old—basic contribution cohort of 3 and 8 percent of the SP; (ii) Age 26 to 30 years old—basic contribution cohort of 4 to 8 percent of the SP; (iii) Age 31 to 35 years old—basic contribution cohort of 5 to 8 percent of the SP; (iv) Age 36 to 40 years old—basic contribution cohort of 6 to 8 percent of the SP; (v) Age 41 to 45 years old—basic contribution cohort of 7 to 8 percent of the SP; and (vi) Age 46 years old or more—basic contribution cohort of 8 percent of the SP. | ||||
Transferred amount related to plan sponsored by company | BRL 1,558,586 | BRL 1,434,836 | BRL 1,442,657 | |||
Allocation of plan assets | 100.00% | 100.00% | ||||
Mathematical reserves, annual readjustment interest rate | 5.50% | 5.50% | 5.50% | 5.50% | ||
TCSPREV plan | Exclusive Investment Funds | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Allocation of plan assets | 11.45% | 11.45% | ||||
PBS-A Plan | SISTEL | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Surpluses of benefit plan amount | BRL 2,636,281 | |||||
PBS-TNCP Plan | SISTEL | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Surpluses of benefit plan amount | BRL 25,351 | |||||
Active employees migrated to the CELPREV plan | 35.00% | 35.00% |
Liabilities For Pension Bene130
Liabilities For Pension Benefits - Changes in Actuarial Obligations (Detail) - BRL BRL in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
TCSPREV plan | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Service cost | BRL 586 | BRL 797 | BRL 1,837 |
Interest cost | 57,066 | 54,689 | 49,310 |
Benefits paid | (44,535) | (36,569) | |
TCSPREV plan | Accumulated Defined Benefit Plans Adjustment, Net Transition Attributable to Parent | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Projected benefit obligation at the beginning of the year | 502,433 | 481,055 | |
Service cost | 586 | 797 | |
Interest cost | 57,066 | 54,689 | |
Benefits paid | (44,535) | (36,569) | |
Changes in actuarial assumptions | (18,420) | 2,461 | |
Projected benefit obligation at the end of the year | 497,130 | 502,433 | 481,055 |
BrTREV Plans | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Service cost | 142 | 230 | 782 |
Interest cost | 228,738 | 219,630 | 194,520 |
Benefits paid | (177,696) | (167,661) | |
BrTREV Plans | Accumulated Defined Benefit Plans Adjustment, Net Transition Attributable to Parent | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Projected benefit obligation at the beginning of the year | 2,023,849 | 1,941,701 | |
Service cost | 142 | 230 | |
Interest cost | 228,738 | 219,630 | |
Benefits paid | (177,696) | (167,661) | |
Changes in actuarial assumptions | (74,280) | 29,949 | |
Projected benefit obligation at the end of the year | 2,000,753 | 2,023,849 | 1,941,701 |
TelemarPrev Plan | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Service cost | 2,785 | 3,592 | 12,206 |
Interest cost | 328,289 | 310,467 | 282,508 |
Benefits paid | (219,465) | (216,394) | |
TelemarPrev Plan | Accumulated Defined Benefit Plans Adjustment, Net Transition Attributable to Parent | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Projected benefit obligation at the beginning of the year | 2,885,744 | 2,722,980 | |
Service cost | 2,785 | 3,592 | |
Interest cost | 328,289 | 310,467 | |
Benefits paid | (219,465) | (216,394) | |
Changes in actuarial assumptions | (204,806) | 65,099 | |
Projected benefit obligation at the end of the year | 2,792,547 | 2,885,744 | 2,722,980 |
PBS-Telemar Plan | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Service cost | 80 | 121 | 235 |
Interest cost | 28,089 | 26,755 | 23,839 |
Benefits paid | (19,942) | (18,507) | |
Participan's contributions | 42 | 52 | |
PBS-Telemar Plan | Accumulated Defined Benefit Plans Adjustment, Net Transition Attributable to Parent | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Projected benefit obligation at the beginning of the year | 247,833 | 235,884 | |
Service cost | 80 | 121 | |
Interest cost | 28,089 | 26,755 | |
Benefits paid | (19,942) | (18,507) | |
Participan's contributions | 43 | 52 | |
Changes in actuarial assumptions | (11,956) | 3,528 | |
Projected benefit obligation at the end of the year | 244,147 | 247,833 | 235,884 |
PAMEC Plan | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Interest cost | 345 | 396 | 427 |
PAMEC Plan | Accumulated Defined Benefit Plans Adjustment, Net Transition Attributable to Parent | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Projected benefit obligation at the beginning of the year | 2,981 | 3,418 | |
Interest cost | 345 | 396 | |
Benefits paid | (122) | (110) | |
Changes in actuarial assumptions | (619) | (723) | |
Projected benefit obligation at the end of the year | BRL 2,585 | BRL 2,981 | BRL 3,418 |
Liabilities For Pension Bene131
Liabilities For Pension Benefits - Fair Value of Assets (Detail) - BRL BRL in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
TCSPREV plan | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||
Fair value of plan assets at the beginning of the year | BRL 1,434,836 | BRL 1,442,657 |
Actual return on plan assets | 168,285 | 28,748 |
Benefits paid | (44,535) | (36,569) |
Fair value of plan assets at the end of the year | 1,558,586 | 1,434,836 |
BrTREV Plans | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||
Fair value of plan assets at the beginning of the year | 1,550,295 | 1,301,556 |
Actual return on plan assets | 88,465 | 293,096 |
Company's contributions | 139,935 | 123,304 |
Benefits paid | (177,696) | (167,661) |
Fair value of plan assets at the end of the year | 1,600,999 | 1,550,295 |
TelemarPrev Plan | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||
Fair value of plan assets at the beginning of the year | 3,123,052 | 3,204,535 |
Actual return on plan assets | 371,898 | 134,911 |
Benefits paid | (219,465) | (216,394) |
Fair value of plan assets at the end of the year | 3,275,485 | 3,123,052 |
PBS-Telemar Plan | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||
Fair value of plan assets at the beginning of the year | 257,937 | 264,224 |
Actual return on plan assets | 39,516 | 12,091 |
Company's contributions | 71 | 77 |
Participan's contributions | 42 | 52 |
Benefits paid | (19,942) | (18,507) |
Fair value of plan assets at the end of the year | BRL 277,624 | BRL 257,937 |
Liabilities For Pension Bene132
Liabilities For Pension Benefits - Funded (Unfunded) Status of Plan (Detail) - BRL BRL in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
TCSPREV plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Funded (unfunded) status of plan | BRL (1,061,456) | BRL (932,403) |
BrTREV Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Funded (unfunded) status of plan | 399,574 | 473,554 |
TelemarPrev Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Funded (unfunded) status of plan | (482,938) | (237,308) |
PBS-Telemar Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Funded (unfunded) status of plan | (33,477) | (10,104) |
PAMEC Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Funded (unfunded) status of plan | BRL 2,585 | BRL 2,981 |
Liabilities For Pension Bene133
Liabilities For Pension Benefits - Net Periodic Defined Pension Cost (Detail) - BRL BRL in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
TCSPREV plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Net service cost | BRL 586 | BRL 797 | BRL 1,837 | |
Interest cost | 57,066 | 54,689 | 49,310 | |
Expected return on plan assets | (162,701) | (150,078) | (145,230) | |
Amortization of net actuarial losses (gains) | (5,831) | (19,443) | ||
Amortization of prior year service costs (gains) | (5,636) | (5,636) | (5,636) | |
Net periodic pension cost (benefit) | (110,684) | (106,059) | (119,162) | |
TCSPREV plan | Scenario, Forecast | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Net service cost | BRL 551 | |||
Interest cost | 62,214 | |||
Expected return on plan assets | (193,747) | |||
Amortization of prior year service costs (gains) | (5,636) | |||
Net periodic pension cost (benefit) | (136,618) | |||
BrTREV Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Net service cost | 142 | 230 | 782 | |
Interest cost | 228,738 | 219,630 | 194,520 | |
Expected return on plan assets | (180,363) | (151,143) | (130,340) | |
Amortization of net actuarial losses (gains) | 6,940 | 23,698 | ||
Amortization of prior year service costs (gains) | 1,552 | 1,552 | 1,552 | |
Net periodic pension cost (benefit) | 50,069 | 77,209 | 90,212 | |
BrTREV Plans | Scenario, Forecast | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Net service cost | 154 | |||
Interest cost | 249,319 | |||
Expected return on plan assets | (191,438) | |||
Amortization of prior year service costs (gains) | 1,552 | |||
Net periodic pension cost (benefit) | 59,587 | |||
TelemarPrev Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Net service cost | 2,785 | 3,592 | 12,206 | |
Interest cost | 328,289 | 310,467 | 282,508 | |
Expected return on plan assets | (356,313) | (367,435) | (305,649) | |
Amortization of net actuarial losses (gains) | 47,438 | 9,131 | 30,174 | |
Amortization of initial transition obligation | (4,203) | (4,202) | (4,203) | |
Net periodic pension cost (benefit) | 17,996 | (48,447) | 15,036 | |
TelemarPrev Plan | Scenario, Forecast | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Net service cost | 2,042 | |||
Interest cost | 350,701 | |||
Expected return on plan assets | (381,993) | |||
Amortization of net actuarial losses (gains) | 4,380 | |||
Net periodic pension cost (benefit) | (24,870) | |||
PBS-Telemar Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Net service cost | 80 | 121 | 235 | |
Interest cost | 28,089 | 26,755 | 23,839 | |
Expected return on plan assets | (29,293) | (30,117) | (27,942) | |
Net periodic pension cost (benefit) | (1,124) | (3,241) | (3,868) | |
PBS-Telemar Plan | Scenario, Forecast | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Net service cost | 78 | |||
Interest cost | 30,475 | |||
Expected return on plan assets | (32,876) | |||
Net periodic pension cost (benefit) | (2,323) | |||
PAMEC Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Interest cost | 345 | 396 | 427 | |
Net periodic pension cost (benefit) | BRL 345 | BRL 396 | BRL 427 | |
PAMEC Plan | Scenario, Forecast | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Interest cost | 330 | |||
Net periodic pension cost (benefit) | BRL 330 |
Liabilities For Pension Bene134
Liabilities For Pension Benefits - Actuarial Assumption Used to Determine Actuarial Present Value of Projected Benefit Obligation (Detail) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
TCSPREV plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate for determining projected benefit obligations | 13.10% | 11.83% | 11.83% |
Expected long-term rate of return on plan assets | 13.10% | 11.83% | 11.83% |
Annual salary increases | 6.45% | 7.93% | 7.93% |
Rate of compensation increase | 5.50% | 5.50% | 5.50% |
Inflation rate assumption used in the above | 5.50% | 5.50% | 5.50% |
BrTREV and PAMEC Plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate for determining projected benefit obligations | 13.10% | 11.83% | 11.83% |
Expected long-term rate of return on plan assets | 13.10% | 11.83% | 11.83% |
Annual salary increases | 7.08% | 7.93% | 7.93% |
Rate of compensation increase | 5.50% | 5.50% | 5.50% |
Inflation rate assumption used in the above | 5.50% | 5.50% | 5.50% |
TelemarPrev and PBS-Telemar Plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate for determining projected benefit obligations | 13.10% | 11.83% | 11.83% |
Expected long-term rate of return on plan assets | 13.10% | 11.83% | 11.83% |
Annual salary increases | 5.50% | 7.93% | 7.93% |
Rate of compensation increase | 5.50% | 5.50% | 5.50% |
Inflation rate assumption used in the above | 5.50% | 5.50% | 5.50% |
Liabilities For Pension Bene135
Liabilities For Pension Benefits - Average Ceilings Set For Different Type of Investment For Pension Funds (Detail) | 12 Months Ended |
Dec. 31, 2015 | |
TCSPREV plan | Fixed Income | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 100.00% |
TCSPREV plan | Variable Income | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 17.00% |
TCSPREV plan | Structured Investments | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 20.00% |
TCSPREV plan | Investments abroad | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 5.00% |
TCSPREV plan | Real Estate | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 8.00% |
TCSPREV plan | Loans to participants | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 15.00% |
BrTREV Plans | Fixed Income | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 100.00% |
BrTREV Plans | Variable Income | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 17.00% |
BrTREV Plans | Structured Investments | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 20.00% |
BrTREV Plans | Investments abroad | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 5.00% |
BrTREV Plans | Real Estate | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 8.00% |
BrTREV Plans | Loans to participants | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 15.00% |
PBS-Telemar Plan | Fixed Income | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 100.00% |
PBS-Telemar Plan | Variable Income | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 10.00% |
PBS-Telemar Plan | Structured Investments | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 20.00% |
PBS-Telemar Plan | Investments abroad | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 2.00% |
PBS-Telemar Plan | Real Estate | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 8.00% |
PBS-Telemar Plan | Loans to participants | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 15.00% |
TelemarPrev Plan | Fixed Income | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 100.00% |
TelemarPrev Plan | Variable Income | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 17.00% |
TelemarPrev Plan | Structured Investments | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 20.00% |
TelemarPrev Plan | Investments abroad | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 5.00% |
TelemarPrev Plan | Real Estate | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 8.00% |
TelemarPrev Plan | Loans to participants | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 15.00% |
Liabilities For Pension Bene136
Liabilities For Pension Benefits - Allocation of Plan Assets (Detail) | 12 Months Ended |
Dec. 31, 2015 | |
TCSPREV plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets | 100.00% |
TCSPREV plan | Fixed Income | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets | 84.25% |
TCSPREV plan | Variable Income | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets | 3.25% |
TCSPREV plan | Exclusive Investment Funds | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets | 11.45% |
TCSPREV plan | Real Estate | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets | 0.72% |
TCSPREV plan | Loans to participants | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets | 0.33% |
BrTREV Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets | 100.00% |
BrTREV Plans | Fixed Income | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets | 92.17% |
BrTREV Plans | Variable Income | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets | 1.32% |
BrTREV Plans | Exclusive Investment Funds | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets | 5.21% |
BrTREV Plans | Real Estate | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets | 0.69% |
BrTREV Plans | Loans to participants | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets | 0.62% |
PBS-Telemar Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets | 100.00% |
PBS-Telemar Plan | Fixed Income | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets | 88.01% |
PBS-Telemar Plan | Variable Income | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets | 1.78% |
PBS-Telemar Plan | Exclusive Investment Funds | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets | 9.12% |
PBS-Telemar Plan | Real Estate | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets | 0.74% |
PBS-Telemar Plan | Loans to participants | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets | 0.35% |
TelemarPrev Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets | 100.00% |
TelemarPrev Plan | Fixed Income | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets | 91.40% |
TelemarPrev Plan | Variable Income | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets | 2.21% |
TelemarPrev Plan | Exclusive Investment Funds | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets | 5.08% |
TelemarPrev Plan | Real Estate | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets | 0.70% |
TelemarPrev Plan | Loans to participants | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets | 0.61% |
Liabilities For Pension Bene137
Liabilities For Pension Benefits - Expected Contribution and Benefits (Detail) BRL in Thousands | Dec. 31, 2015BRL |
TCSPREV plan | |
Defined Benefit Plan Disclosure [Line Items] | |
2,016 | BRL 44,429 |
2,017 | 46,725 |
2,018 | 49,143 |
2,019 | 51,562 |
2,020 | 54,040 |
2021 until 2025 | 308,753 |
BrTREV Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
2,016 | 195,106 |
2,017 | 203,295 |
2,018 | 211,461 |
2,019 | 219,708 |
2,020 | 228,076 |
2021 until 2025 | 1,261,909 |
PBS-Telemar Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
2,016 | 23,028 |
2,017 | 24,131 |
2,018 | 25,367 |
2,019 | 26,650 |
2,020 | 27,866 |
2021 until 2025 | 157,295 |
TelemarPrev Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
2,016 | 230,887 |
2,017 | 244,260 |
2,018 | 258,614 |
2,019 | 272,844 |
2,020 | 287,623 |
2021 until 2025 | BRL 1,684,353 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2015Segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 1 |
Schedule of Segment Report Info
Schedule of Segment Report Information (Detail) - BRL BRL in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Segment Information [Line Items] | ||||
Net operating revenue | BRL 27,353,765 | BRL 28,247,099 | BRL 28,422,147 | |
Operating (expenses) income | ||||
Depreciation and amortization | (6,195,039) | (5,766,702) | (5,691,824) | |
Allowance for doubtful accounts | (726,944) | (649,463) | (849,779) | |
Other operating income, net | (1,258,655) | 2,023,622 | 1,243,100 | |
Income (loss) before financial expenses and taxes | 1,213,038 | 4,613,209 | 3,982,989 | |
FINANCIAL INCOME (EXPENSES) | ||||
Income (loss) before taxes | [1] | (5,324,970) | 64,287 | 681,033 |
Income tax and social contribution | (3,379,927) | (758,268) | (76,610) | |
LOSS FROM CONTINUING OPERATIONS | (8,704,897) | (693,981) | 604,423 | |
Operating Segments | ||||
Segment Information [Line Items] | ||||
Net operating revenue | 26,441,091 | 27,613,160 | 28,422,147 | |
Operating (expenses) income | ||||
Depreciation and amortization | (5,996,157) | (5,630,238) | (5,691,824) | |
Interconnection | (1,757,277) | (2,674,915) | (3,965,623) | |
Personnel | (2,618,139) | (2,749,404) | (2,534,222) | |
Third-party services | (6,154,900) | (6,163,447) | (6,119,733) | |
Network maintenance services | (1,860,646) | (1,906,789) | (2,328,140) | |
Handset and other costs | (226,826) | (702,379) | (515,377) | |
Advertising and publicity | (379,537) | (656,487) | (556,500) | |
Rentals and Insurance | (3,553,881) | (3,095,667) | (2,119,684) | |
Provisions/reversals | (860,166) | (779,314) | (656,849) | |
Allowance for doubtful accounts | (692,935) | (628,605) | (922,779) | |
Impairment losses | (501,465) | |||
Taxes and other expenses | (902,507) | (1,440,968) | (1,397,982) | |
Other operating income, net | 277,954 | 3,206,943 | 2,369,555 | |
Income (loss) before financial expenses and taxes | 1,214,609 | 4,391,890 | 3,982,989 | |
FINANCIAL INCOME (EXPENSES) | ||||
Financial income | 4,493,042 | 1,332,723 | 1,375,217 | |
Financial expenses | (11,013,939) | (5,870,193) | (4,677,173) | |
Income (loss) before taxes | (5,306,288) | (145,580) | 681,033 | |
Income tax and social contribution | (3,202,817) | (615,406) | (76,610) | |
LOSS FROM CONTINUING OPERATIONS | (8,509,105) | (760,986) | 604,423 | |
Operating Segments | Residential | ||||
Segment Information [Line Items] | ||||
Net operating revenue | 9,779,218 | 9,995,205 | 10,302,910 | |
Operating Segments | Personal mobility | ||||
Segment Information [Line Items] | ||||
Net operating revenue | 8,430,890 | 9,011,200 | 9,289,893 | |
Operating Segments | SMEs/Corporate | ||||
Segment Information [Line Items] | ||||
Net operating revenue | 7,973,893 | 8,311,458 | 8,454,923 | |
Operating Segments | Other services and businesses | ||||
Segment Information [Line Items] | ||||
Net operating revenue | BRL 257,090 | BRL 295,297 | BRL 374,421 | |
[1] | In 2013, substantially all pre tax income and income tax are related to Brazilian Companies. In 2015 and 2014 income before taxes and income tax for continuing operations is as follows: |
Reconciliation of Revenue of th
Reconciliation of Revenue of the Segment and Total Consolidated Revenue Information (Detail) - BRL BRL in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Segment Information [Line Items] | ||||
Consolidated net operating revenue | BRL 27,353,765 | BRL 28,247,099 | BRL 28,422,147 | |
Operating Segments | ||||
Segment Information [Line Items] | ||||
Consolidated net operating revenue | 26,441,091 | 27,613,160 | BRL 28,422,147 | |
Revenue related to other businesses | ||||
Segment Information [Line Items] | ||||
Consolidated net operating revenue | [1] | BRL 912,674 | BRL 633,939 | |
[1] | In 2014 the Africa and Timor business were consolidated after May 1. |
Reconciliation Between the Prof
Reconciliation Between the Profit (loss) Before Financial Income (expenses) and Taxes of the segment Telecommunications in Brazil and Consolidated Profit (loss) Before Financial Income (expenses) and Taxes Information (Detail) - BRL BRL in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Segment Information [Line Items] | ||||
Profit (loss) before taxes | [1] | BRL (5,324,970) | BRL 64,287 | BRL 681,033 |
Operating Segments | ||||
Segment Information [Line Items] | ||||
Profit (loss) before taxes | (5,306,288) | (145,580) | BRL 681,033 | |
Other Businesses | ||||
Segment Information [Line Items] | ||||
Profit (loss) before taxes | [2] | BRL (18,682) | BRL 209,867 | |
[1] | In 2013, substantially all pre tax income and income tax are related to Brazilian Companies. In 2015 and 2014 income before taxes and income tax for continuing operations is as follows: | |||
[2] | In 2014 the Africa and Timor business were consolidated after May 1. |
Total Assets, Liabilities and P
Total Assets, Liabilities and Property, Plant and Equipment and Intangible Assets per Geographic Market (Detail) - BRL BRL in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Segment Information [Line Items] | ||
Total assets | BRL 99,334,601 | BRL 110,741,334 |
Property, plant and equipment assets | 25,817,821 | 26,244,309 |
Intangible assets | 11,780,136 | 13,553,821 |
BRAZIL | ||
Segment Information [Line Items] | ||
Total assets | 91,648,303 | 103,098,596 |
Total liabilities | 81,943,161 | 82,736,984 |
Property, plant and equipment assets | 25,817,821 | 26,244,309 |
Intangible assets | 11,780,136 | 13,553,821 |
Capital expenditures on tangible and intangible assets | 3,565,454 | 5,259,714 |
Other, primarily Africa | ||
Segment Information [Line Items] | ||
Total assets | 7,686,298 | 7,642,738 |
Total liabilities | 745,000 | 851,273 |
Property, plant and equipment assets | 466,049 | 506,347 |
Intangible assets | 943,534 | 997,015 |
Capital expenditures on tangible and intangible assets | BRL 116,030 | BRL 110,637 |
Transactions with Joint Venture
Transactions with Joint Venture, Associates, and Unconsolidated Entities (Detail) - BRL BRL in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Related Party Transaction [Line Items] | ||
Accounts receivable and other assets | BRL 4,916 | BRL 191,159 |
Accounts payable and other liabilities | 53,246 | 68,259 |
Revenue from services rendered | 67 | 31,873 |
Operating costs and expenses | (240,511) | (232,176) |
Pt ACS | ||
Related Party Transaction [Line Items] | ||
Accounts receivable and other assets | 15,114 | |
Accounts payable and other liabilities | 599 | |
Operating costs and expenses | (3,887) | |
Fundacao PT | ||
Related Party Transaction [Line Items] | ||
Accounts receivable and other assets | 7,387 | |
Accounts payable and other liabilities | 2 | |
Sportinvest Multimedia | ||
Related Party Transaction [Line Items] | ||
Accounts receivable and other assets | 105,492 | |
Accounts payable and other liabilities | 291 | |
Operating costs and expenses | (669) | |
Siresp | ||
Related Party Transaction [Line Items] | ||
Accounts receivable and other assets | 40 | |
Accounts payable and other liabilities | 6 | |
Fibroglobal | ||
Related Party Transaction [Line Items] | ||
Accounts receivable and other assets | 48,134 | |
Accounts payable and other liabilities | 9,564 | |
Operating costs and expenses | (10,974) | |
Yunit | ||
Related Party Transaction [Line Items] | ||
Accounts receivable and other assets | 7,454 | |
Accounts payable and other liabilities | 669 | |
Contax | ||
Related Party Transaction [Line Items] | ||
Accounts receivable and other assets | 3,307 | |
Accounts payable and other liabilities | 41,832 | |
Revenue from services rendered | 30,754 | |
Other Entities | ||
Related Party Transaction [Line Items] | ||
Accounts receivable and other assets | 4,916 | 4,231 |
Accounts payable and other liabilities | 821 | |
Revenue from services rendered | 67 | 93 |
Operating costs and expenses | (33,145) | (31,400) |
TODO | ||
Related Party Transaction [Line Items] | ||
Accounts payable and other liabilities | 5,587 | |
Revenue from services rendered | 1,026 | |
Operating costs and expenses | (22,984) | |
Ability | ||
Related Party Transaction [Line Items] | ||
Accounts payable and other liabilities | 7 | |
Veotex | ||
Related Party Transaction [Line Items] | ||
Accounts payable and other liabilities | 345 | |
Operating costs and expenses | (10,221) | |
Hispamar | ||
Related Party Transaction [Line Items] | ||
Accounts payable and other liabilities | 52,425 | 9,357 |
Operating costs and expenses | BRL (207,366) | BRL (152,041) |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - BRL BRL in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Related Party Transaction [Line Items] | ||
Officer's compensation | BRL 25,649 | BRL 25,565 |
Directors and Executive Officers | ||
Related Party Transaction [Line Items] | ||
Officer's compensation | BRL 25,441 | BRL 25,409 |
Held-For-Sale Assets And Dis145
Held-For-Sale Assets And Discontinued Operations - Additional Information (Detail) - PT Portugal SGPS, S.A. ("PT Portugal") € in Millions | Jun. 02, 2015EUR (€) |
Assets Held for Sale and Discontinued Operations [Line Items] | |
Cash received from sale of stake | € 4,920 |
Consideration received from sale of stake | 5,789 |
Provision for payment of earn-out | 500 |
Euro Denominated Debt | |
Assets Held for Sale and Discontinued Operations [Line Items] | |
Amount allocated to settle Euro dominated debt | € 869 |
Loss on Divestitures (Detail)
Loss on Divestitures (Detail) - BRL BRL in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | ||
Divestitures [Line Items] | |||
Profit for the period from discontinued operations | BRL (867,139) | BRL (4,086,449) | |
PT Portugal SGPS, S.A. ("PT Portugal") | |||
Divestitures [Line Items] | |||
Allowance for impairment loss at fair value of the PT Portugal investment and divesture-related expenses | (3,800,000) | (3,836,388) | |
Loss on sale of PT Portugal and divesture-related expenses | [1] | (625,464) | |
Comprehensive income transferred to the income statement | [2],[3] | (225,934) | |
Loss for the period of discontinued operations | [4] | (15,741) | (250,061) |
Profit for the period from discontinued operations | [5] | BRL (867,139) | BRL (4,086,449) |
[1] | The loss on the sale of PT Portugal includes: (1) the derecognized investment cost that includes goodwill arising on the business combination between the Company and PT less the R$3.8 billion allowance for loss recognized in December 2014, and selling expenses totaling R$1.3 billion; and (2) the R$0.7 billion revenue related to cash proceeds received directly by the Company. The final price is subject to possible post-closing adjustments to be determined in the following months based on changes in the cash, debt, and working capital positions at the closing date. | ||
[2] | Refers mainly to the fair value of the indirect interest financial investment of 18.75% of Unitel's share capital, classified as held for sale. The fair value of this investment at the date of acquisition was estimated based on the valuation made by Banco Santander (Brasil), which used a series of estimates and assumptions, including cash flows forecasts for a four-year period, the choice of a growth rate to extrapolate the cash flows projections, and definition of appropriate discount rates. The Company has the policy of monitoring and periodically updating the main assumptions and material estimates used in the fair value measurement, and also takes into consideration in this assessment possible impacts of actual events related to the investment, notably the lawsuits filed against Unitel and its shareholders in 2015. As at December 31, 2015 and in the context of the updating of assumptions referred to above, the Company determined a fair value of the investment in Unitel of R$3,436 million and recognized in profit or loss a loss of R$448 million. The Company believes that the fair value measured under the Discounted Cash Flows method and using the discount rate assumptions (from 15.5% to 17.5%), foreign exchange rates, and other Angolan official financial indicators, corresponds to the best estimate of the realizable value of the investment in Unitel. | ||
[3] | Refers to the cumulative foreign exchange differences gains totaling R$0.5 billion and actuarial losses from pensions and postretirement benefits plans totaling R$0.7 billion recognized in other comprehensive income, transferred from equity to profit or loss for the year due to divesture. | ||
[4] | Refers to PT Portugal's loss recognized as equity in profits of subsidiaries for 2015 and 2014. | ||
[5] | The profit or loss from discontinued operations includes the effect of taxes amounting to R$327,115 (R$92,545 in 2014). |
Loss on Divestitures (Parenthet
Loss on Divestitures (Parenthetical) (Detail) - BRL BRL in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Divestitures [Line Items] | |||
Selling Expense | BRL 4,719,811 | BRL 5,565,757 | BRL 5,532,045 |
Effect of taxes on selling expenses | 327,115 | 92,545 | |
PT Portugal SGPS, S.A. ("PT Portugal") | |||
Divestitures [Line Items] | |||
Allowance for loss | 3,800,000 | BRL 3,836,388 | |
Selling Expense | 1,300,000 | ||
Revenue related to cash proceeds received directly by the Company | 700,000 | ||
Gain on cumulative foreign exchange differences | 500,000 | ||
Actuarial losses from pensions and postretirement benefits plans | BRL 700,000 |
Assets Held for Sale and Liabil
Assets Held for Sale and Liabilities Associated to Assets Held for Sale (Detail) - BRL BRL in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Discontinued Operations [Line Items] | ||
Held-for-sale assets | BRL 34,254,682 | |
Cash, cash equivalents and short-term investments | 760,167 | |
Accounts receivable | 2,465,830 | |
Dividends receivable | BRL 2,042,191 | 1,261,826 |
Available-for-sale financial asset (ii) | 4,284,416 | |
Other assets | 1,249,872 | |
Investments | 197,539 | |
Property, plant and equipment | 11,066,487 | |
Intangible assets | 5,648,249 | |
Goodwill | 7,318,348 | |
Liabilities directly associated to assets held for sale | 27,178,222 | |
Borrowings and financing | 18,976,636 | |
Trade payables | 2,358,103 | |
Provisions for pension plans | 3,348,664 | |
Other liabilities | 2,494,819 | |
Non-controlling interests | 1,509,197 | |
Total assets held for sale and liabilities associated to assets held for sale | 5,567,263 | |
Dividends receivable (i) | 1,263,774 | |
Operations in Africa | ||
Discontinued Operations [Line Items] | ||
Held-for-sale assets | 7,686,298 | 7,642,738 |
Cash, cash equivalents and short-term investments | 214,413 | 170,056 |
Accounts receivable | 217,992 | 195,690 |
Dividends receivable | 2,042,191 | |
Available-for-sale financial asset (ii) | 3,541,314 | 4,284,416 |
Other assets | 230,318 | 164,121 |
Investments | 61,425 | 63,267 |
Property, plant and equipment | 466,049 | 506,347 |
Intangible assets | 356,900 | 376,441 |
Goodwill | 555,696 | 620,574 |
Liabilities directly associated to assets held for sale | 745,000 | 851,273 |
Borrowings and financing | 9,557 | 83,843 |
Trade payables | 85,730 | 97,600 |
Provisions for pension plans | 923 | 997 |
Other liabilities | 648,790 | 668,833 |
Non-controlling interests | 1,190,547 | 1,509,197 |
Total assets held for sale and liabilities associated to assets held for sale | BRL 5,750,751 | 5,282,268 |
Dividends receivable (i) | 1,261,826 | |
PT Portugal Operations | ||
Discontinued Operations [Line Items] | ||
Held-for-sale assets | 26,611,944 | |
Cash, cash equivalents and short-term investments | 590,111 | |
Accounts receivable | 2,270,140 | |
Other assets | 1,085,751 | |
Investments | 134,272 | |
Property, plant and equipment | 10,560,140 | |
Intangible assets | 5,271,808 | |
Goodwill | 6,697,774 | |
Liabilities directly associated to assets held for sale | 26,326,949 | |
Borrowings and financing | 18,892,793 | |
Trade payables | 2,260,503 | |
Provisions for pension plans | 3,347,667 | |
Other liabilities | 1,825,986 | |
Total assets held for sale and liabilities associated to assets held for sale | 284,995 | |
Dividends receivable (i) | BRL 1,948 |
Assets Held for Sale and Lia149
Assets Held for Sale and Liabilities Associated to Assets Held for Sale (Parenthetical) (Detail) BRL in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2015BRL | Dec. 31, 2015USD ($) | Dec. 31, 2014BRL | |
Discontinued Operations [Line Items] | |||
Unpaid dividends | BRL 1,263,774 | ||
Fair value of the investment | BRL 1,927,686 | 282,700 | |
Unitel S.A. ("Unitel") | |||
Discontinued Operations [Line Items] | |||
Unpaid dividends | $ | $ 661 | ||
Fair value of the investment | 3,436,000 | ||
Recognized profit or loss a loss | BRL 408,000 | ||
Unitel S.A. ("Unitel") | Minimum | |||
Discontinued Operations [Line Items] | |||
Discount rate assumptions | 15.50% | ||
Unitel S.A. ("Unitel") | Maximum | |||
Discontinued Operations [Line Items] | |||
Discount rate assumptions | 17.50% | ||
Operations in Africa | |||
Discontinued Operations [Line Items] | |||
Unpaid dividends | BRL 1,261,826 | ||
Loss on goodwill | BRL 89,176 |
Other Information - Additional
Other Information - Additional Information (Detail) BRL in Thousands, € in Millions, $ in Billions | Oct. 23, 2015USD ($) | Jun. 30, 2015BRLshares | Mar. 31, 2015EUR (€)shares | Dec. 31, 2014BRL | Dec. 31, 2015BRL | Sep. 08, 2014sharesBRL / Stock | Jun. 30, 2014EUR (€) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Investment on securities | BRL 171,415 | BRL 1,801,720 | € 897 | ||||
Average annual rate of return | 3.60% | ||||||
Value of securities delivered with no cash involved | € | € 897 | ||||||
Capital contribution, contingent to consolidation transaction, maximum | $ | $ 4 | ||||||
Proceed from sale of shares | BRL | BRL 13,632 | BRL 8,230,606 | |||||
Call Option | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Fair value of the Call Option | BRL | BRL 4,000 | ||||||
Call Option | Long | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Rate added on interbank deposit rate (CDI) | 1.50% | ||||||
Common Stock | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Exchanged Shares | 47,434,872 | ||||||
Number of shares sold | 1,069,131 | ||||||
Common Stock | Call Option | Long | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Shares Subject to the Option | 47,434,872 | ||||||
Shares Subject to the Option, exercise price | BRL / Stock | 2.0104 | ||||||
Common Stock | Pharol | Before Exchange | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Investment owned, shares | 104,580,393 | ||||||
Investment owned, shares, percentage | 37.66% | ||||||
Common Stock | Pharol | After Exchange | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Investment owned, shares | 57,145,521 | ||||||
Investment owned, shares, percentage | 24.81% | ||||||
Preferred Stock | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Exchanged Shares | 94,869,744 | ||||||
Number of shares sold | 1,162,652 | ||||||
Preferred Stock | Call Option | Long | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Shares Subject to the Option | 94,869,744 | ||||||
Shares Subject to the Option, exercise price | BRL / Stock | 1.8529 | ||||||
Preferred Stock | Pharol | Before Exchange | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Investment owned, shares | 172,025,273 | ||||||
Investment owned, shares, percentage | 32.82% | ||||||
Preferred Stock | Pharol | After Exchange | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Investment owned, shares | 77,155,529 | ||||||
Investment owned, shares, percentage | 19.17% | ||||||
Matured on July 15, 2014 | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Investment on securities | € | € 847 | ||||||
Matured on July 17, 2014 | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Investment on securities | € | € 50 |
Percentages by which Shares Sub
Percentages by which Shares Subject to Options will be Reduced (Detail) | Dec. 31, 2015 |
Schedule of Investments [Abstract] | |
Date of Reduction, As from 03/31/2016 | 10.00% |
Date of Reduction, As from 03/31/2017 | 18.00% |
Date of Reduction, As from 03/31/2018 | 18.00% |
Date of Reduction, As from 03/31/2019 | 18.00% |
Date of Reduction, As from 03/31/2020 | 18.00% |
Date of Reduction, As from 03/31/2021 | 18.00% |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - Subsequent Event - BRL | Apr. 27, 2016 | Apr. 20, 2016 |
5th Issue Debenture | ||
Subsequent Event [Line Items] | ||
Early repayment of debt | BRL 1,519,961,560 | |
9th Issue Debenture | ||
Subsequent Event [Line Items] | ||
Early repayment of debt | BRL 21,518,990,580 |