Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2018shares | |
Document and Entity Information [Abstract] | |
Document Type | 20-F |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2018 |
Document Fiscal Year Focus | 2018 |
Document Fiscal Period Focus | FY |
Trading Symbol | OIBR |
Entity Registrant Name | OI S.A. - In Judicial Reorganization |
Entity Central Index Key | 0001160846 |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | No |
Entity Current Reporting Status | No |
Entity Filer Category | Accelerated Filer |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 2,266,216,024 |
Consolidated Balance Sheets
Consolidated Balance Sheets - BRL (R$) R$ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | |
Current assets | |||
Cash and cash equivalents | R$ 4385329 | R$ 6862684 | |
Short-term investments | 201,975 | 21,447 | |
Trade accounts receivable, less allowance for doubtful accounts of R$1,870,350 in 2018 and R$1,342,211 in 2017 | 6,516,555 | 7,367,442 | |
Recoverable income taxes | 621,246 | 1,123,510 | |
Other taxes | 803,252 | 1,081,587 | |
Judicial Deposits | 1,715,934 | 1,023,348 | |
Inventories | 317,503 | 253,624 | |
Prepaid expenses | 743,953 | 307,162 | |
Pension plan assets | 4,880 | 1,080 | |
Held-for-sale assets | 4,923,187 | 4,675,216 | |
Other assets | 1,079,670 | 780,627 | |
Total current assets | 21,313,484 | 23,497,727 | |
Non-current assets | |||
Long-term investments | 36,987 | 114,839 | |
Other taxes | 715,976 | 627,558 | |
Deferred tax assets | 23,050 | ||
Judicial Deposits | 7,018,786 | 8,289,762 | |
Investments | 117,840 | 136,510 | |
Property, plant and equipment, net | 28,468,798 | 27,083,454 | |
Intangible assets | 8,025,442 | 9,254,839 | |
Pension plan assets | 753,827 | 1,699,392 | |
Other assets | 773,411 | 282,687 | |
Total non-current assets | 45,934,117 | 47,489,041 | |
Total assets | 67,247,601 | 70,986,768 | |
Current liabilities | |||
Trade payables | 5,225,862 | 5,170,970 | |
Borrowings and financing | 672,894 | 54,251 | |
Payroll, related taxes and benefits | 906,655 | 924,560 | |
Income taxes payable | 27,026 | 567,129 | |
Other taxes | 1,033,868 | 1,443,662 | |
Tax financing program | 142,036 | 278,277 | |
Dividends and interest on capital | 6,168 | 6,222 | |
Provision for contingencies | 680,542 | ||
Unearned revenues | 229,497 | 139,012 | |
Advances from customers | 73,094 | 402,774 | |
Licenses and concessions payable | 85,619 | 20,306 | |
Liabilities associated to held-for-sale assets | 526,870 | 354,127 | |
Other payables | 629,939 | 469,214 | |
Total current liabilities | 10,240,070 | 9,830,504 | |
Non-current liabilities | |||
Trade payables | 3,593,008 | ||
Borrowings and financing | 15,777,012 | ||
Other taxes | 628,716 | 867,664 | |
Deferred taxes liabilities | 497,375 | ||
Tax financing program | 411,170 | 610,500 | |
Provision for contingencies | 4,358,178 | 1,368,435 | |
Liability for pensions benefits | 579,122 | 72,374 | |
Unearned revenues | 1,687,073 | 1,633,816 | |
Advances from customers | 142,134 | 67,143 | |
Licenses and concessions payable | 604 | ||
Other payables | 631,622 | 583,186 | |
Total non-current liabilities | 27,808,035 | 5,701,097 | |
Prepetition liabilities subject to compromise | [1] | 0 | 65,139,228 |
Total liabilities | 38,048,105 | 80,670,829 | |
Shareholders' equity (deficit) | |||
Preferred shares, no par value Authorized 157,727 shares; issued and outstanding 155,915 shares in 2018 and 155,915 in 2017 | 4,094,909 | 4,094,909 | |
Common shares, no par value Authorized 2,298,247 shares; issued and outstanding 2,266,217 shares in 2018 and 519,752 in 2017 | 27,943,562 | 17,343,465 | |
Total share capital | 32,038,471 | 21,438,374 | |
Share issuance costs | (444,943) | (444,943) | |
Capital reserves | 16,053,166 | 17,762,545 | |
Treasury shares | (2,803,250) | (5,531,092) | |
Other comprehensive loss | (1,817,634) | (1,175,521) | |
Accumulated losses | (14,069,804) | (42,026,880) | |
Shareholders' equity (deficit) attributable to the Company and subsidiaries | 28,956,006 | (9,977,517) | |
Non-controlling interest | 243,490 | 293,456 | |
Total Shareholders' equity (deficit) | 29,199,496 | (9,684,061) | |
Total liabilities and shareholders' equity | R$ 67247601 | R$ 70986768 | |
[1] | The total amount of prepetition liabilities subjected to compromise differs from the R$63,960,008 amount of the Creditors List prepared by the Company and filed on May 29, 2017. Per ASC 852, prepetition liabilities subject to compromise included the best estimate, as per the criteria set forth in ASC 450, of contingencies/claims subject to compromise and that in accordance with the Brazilian Law were not included in the Creditor's List. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - BRL (R$) R$ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | R$ 1870350 | R$ 1342211 |
Preferred shares, par value | ||
Preferred shares, authorized | 157,727,000 | 157,727,000 |
Preferred shares, issued | 155,915,000 | 155,915,000 |
Preferred shares, outstanding | 155,915,000 | 155,915,000 |
Common shares, par value | ||
Common shares, authorized | 2,298,247,000 | |
Common shares, issued | 2,266,217,000 | 519,752,000 |
Common shares, outstanding | 2,266,217,000 | 519,752,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - BRL (R$) shares in Thousands, R$ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Net operating revenue | R$ 22060014 | R$ 23789654 | R$ 25996423 | |
Cost of sales and services | (15,822,732) | (15,676,216) | (16,741,791) | |
Gross profit | 6,237,282 | 8,113,438 | 9,254,632 | |
Operating (expenses) income | ||||
Selling expenses | (4,478,352) | (4,399,936) | (4,383,163) | |
General and administrative expenses | (2,697,865) | (3,064,252) | (3,687,706) | |
Other operating income (expenses), net | 417,159 | (1,043,922) | (1,237,085) | |
Reorganization items, net | 31,580,541 | (2,371,918) | (9,005,998) | |
Income (loss) before financial and taxes | 31,058,765 | (2,766,590) | (9,059,320) | |
Financial expenses, net | (4,012,067) | (1,612,058) | (4,375,309) | |
Income (loss) before income taxes | [1] | 27,046,698 | (4,378,648) | (13,434,629) |
Income tax expense (current and deferred) | 347,139 | 350,987 | (2,245,113) | |
Net income (loss) for the year | 27,393,837 | (4,027,661) | (15,679,742) | |
Net income (loss) attributable to owners of the Company | 27,369,422 | (3,736,518) | (15,502,132) | |
Net income (loss) attributable to non-controlling interests | 24,415 | (291,143) | (177,610) | |
Common Stock | ||||
Operating (expenses) income | ||||
Net income (loss) attributable to owners of the Company | R$ 24525692 | R$ 2874290 | R$ 11924904 | |
Weighted average number of outstanding shares-basic and diluted | 1,344,686 | 519,752 | 519,752 | |
Net loss per share from continuing operation attributable to owners of the Company shares-basic and diluted | R$ 18.24 | R$ 5.53 | R$ 22.94 | |
Preferred Stock | ||||
Operating (expenses) income | ||||
Net income (loss) attributable to owners of the Company | R$ 2843730 | R$ 862228 | R$ 3577228 | |
Weighted average number of outstanding shares-basic and diluted | 155,915 | 155,915 | 155,915 | |
Net loss per share from continuing operation attributable to owners of the Company shares-basic and diluted | R$ 18.24 | R$ 5.53 | R$ 22.94 | |
[1] | At December 31, 2018, 2017 and 2016 income (loss) before income taxes and income tax (expense) benefit for continuing operations is as follows: |
Consolidated Statements Compreh
Consolidated Statements Comprehensive Income (Loss) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) for the year | R$ 27393837 | R$ 4027661 | R$ 15679742 |
Other comprehensive income (loss) | |||
Foreign currency translation adjustments | (110,098) | 165,713 | (1,176,359) |
Decrease of interest shares in subsidiary | (374,130) | ||
Foreign currency translation adjustments, net | (110,098) | (208,417) | (1,176,359) |
Pension and other postretirement benefit plans: | |||
Net actuarial loss from continuing operations | (918,782) | (130,846) | (120,357) |
Less amortization of prior service cost and actuarial loss included in net periodic pension cost | (755) | ||
Pension and other postretirement benefit plans | (918,782) | (130,846) | (121,112) |
Changes in effective portion of the fair value of hedging financial instrument | 546,253 | ||
Less reclassification adjustment for gains included in net income (loss) | 64,360 | ||
Fair value hedging financial instruments | 610,613 | ||
Income tax effect on other comprehensive income (loss): | |||
Pension and other postretirement benefit plans | 312,386 | 32,157 | |
Other comprehensive income, tax | 312,386 | 32,157 | |
Other comprehensive loss | 26,677,343 | (4,334,767) | (16,366,600) |
Less comprehensive income (loss) attributable to non-controlling interest | (49,966) | (64,153) | (399,551) |
Net comprehensive income (loss) attributable to controlling shareholders | R$ 26727309 | R$ 4270614 | R$ 15967049 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity / (Deficit) - BRL (R$) R$ in Thousands | Total | Capital Units [Member] | Share issue costs [Member] | Capital Reserves [Member] | Treasury Shares [Member] | Accumulated losses [Member] | Other comprehensive income (loss) [Member] | Parent [Member] | Noncontrolling Interest [Member] |
Beginning balance at Dec. 31, 2015 | R$ 11017306 | R$ 21438374 | R$ 444943 | R$ 17762545 | R$ 5531092 | R$ 22788230 | R$ 609895 | R$ 9826759 | R$ 1190547 |
Loss for the year | (15,679,742) | (15,502,132) | (15,502,132) | (177,610) | |||||
Other comprehensive loss | (686,858) | (464,917) | (464,917) | (221,941) | |||||
Ending balance at Dec. 31, 2016 | (5,349,294) | 21,438,374 | (444,943) | 17,762,545 | (5,531,092) | (38,290,362) | (1,074,812) | (6,140,290) | 790,996 |
Loss for the year | (4,027,661) | (3,736,518) | (3,736,518) | (291,143) | |||||
Other comprehensive loss | (307,106) | (100,709) | (100,709) | (206,397) | |||||
Ending balance at Dec. 31, 2017 | (9,684,061) | 21,438,374 | (444,943) | 17,762,545 | (5,531,092) | (42,026,880) | (1,175,521) | (9,977,517) | 293,456 |
ASC 606 recognized | 655,112 | 655,112 | 655,112 | ||||||
Balance at January 01, 2018 | (9,028,949) | 21,438,374 | (444,943) | 17,762,545 | (5,531,092) | (41,371,768) | (1,175,521) | (9,322,405) | 293,456 |
Issuance of shares to settle notes | 11,613,980 | 10,600,097 | 1,013,883 | 11,613,980 | |||||
Delivery of treasury shares to settle notes | (2,727,842) | 2,727,842 | |||||||
Exercise of warrants | 4,580 | 4,580 | 4,580 | ||||||
Loss for the year | 27,393,837 | 27,369,422 | 27,369,422 | 24,415 | |||||
Other comprehensive loss | (783,952) | (67,458) | (642,113) | (709,571) | (74,381) | ||||
Ending balance at Dec. 31, 2018 | R$ 29199496 | R$ 32038471 | R$ 444943 | R$ 16053166 | R$ 2803250 | R$ 14069804 | R$ 1817634 | R$ 28956006 | R$ 243490 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating activities | |||
Net income (loss) for the year | R$ 27393837 | R$ 4027661 | R$ 15679742 |
Adjustments to reconcile net income (loss) to cash provided by operating activities | |||
Loss (gain) on financial instruments | 3,415,354 | (1,115,823) | (5,342,872) |
Derivatives financial instruments | 5,150,478 | ||
Depreciation and amortization | 5,952,905 | 5,881,302 | 6,310,619 |
Impairment (reversal) of held-for-sale securities | (292,799) | 267,008 | 1,090,295 |
Provision for bad debt | 1,224,248 | 784,403 | 729,752 |
Provision (reversal) for contingencies | (19,465) | 143,517 | 1,056,410 |
Provision for pension plans | (114,813) | (197,141) | (198,554) |
Impairment (reversal) of assets | 0 | 46,534 | 225,512 |
Deferred tax expense (benefit) | (231,433) | (1,257,068) | 1,532,299 |
Reorganization items, net | (31,580,541) | 2,371,918 | 9,005,998 |
Changes in operating assets and liabilities, net of acquisition: | |||
Accounts receivable | (365,771) | (253,469) | (390,361) |
Other taxes | 121,951 | 477,164 | (618,074) |
Purchase of short-term investments | (1,191,664) | (601,200) | (1,877,885) |
Redemption of short-term investments | 1,103,920 | 775,456 | 3,570,453 |
Trade payables | (860,900) | (374,003) | (585,813) |
Payroll, related taxes and benefits | (253,902) | (42,727) | (175,690) |
Provision for contingencies | (434,974) | (114,336) | (692,001) |
Net increase in income taxes refundable and payable | (799,189) | 399,182 | 213,586 |
Pension plans | 54 | (50,000) | |
Employee and management profit sharing | 237,253 | 298,789 | 84,000 |
Changes in assets and liabilities held for sale | (257,643) | 701,416 | (557,330) |
Other | (183,838) | 238,443 | 299,240 |
Net cash provided by (used in) operating activities | 2,862,536 | 4,401,758 | 3,100,320 |
Investing activities | |||
Capital expenditures | (5,246,241) | (4,344,238) | (3,263,571) |
Proceeds from the sale of property, plant and equipment | 22,276 | 5,016 | 6,405 |
Purchase of judicial deposits | (775,953) | (425,563) | (1,366,907) |
Redemption of judicial deposits | 1,083,043 | 343,129 | 706,657 |
Net cash provided by (used in) by in investing activities | (4,916,875) | (4,421,656) | (3,917,416) |
Financing activities | |||
Repayment of principal of borrowings, financing | (161,884) | (659) | (6,223,703) |
Cash impacts on derivatives transactions | 443,709 | ||
Payments of obligation for licenses and concessions | (1,491) | (104,449) | (204,779) |
Payments of obligation for tax refinancing program | (265,495) | (226,776) | (96,638) |
Share buyback | (300,429) | ||
Payment of dividends and interest on capital | (54) | (59,462) | (37,806) |
Exercise of warrants | 4,580 | ||
Net cash used in financing activities | (424,344) | (691,775) | (6,119,217) |
Foreign exchange differences on cash and cash equivalents | 1,328 | 11,106 | (398,499) |
Net (decrease) increase in cash and cash equivalents | (2,477,355) | (700,567) | (7,334,812) |
Cash and cash equivalents beginning of year | 6,862,684 | 7,563,251 | 14,898,063 |
Cash and cash equivalents end of year | 4,385,329 | 6,862,684 | 7,563,251 |
Conversion of debt into shares | 11,613,980 | ||
Acquisition of Property, Plant and Equipment and Intangible assets (incurring liabilities) | 1,034,475 | 1,451,068 | 1,873,573 |
Offset of judicial deposits against provision for contingencies | 845,088 | 382,071 | 1,841,299 |
Income taxes paid | (683,483) | (506,898) | (499,228) |
Financial charges paid | (22,099) | (3,927) | (2,232,977) |
Operating cash payments resulting from the judicial reorganization relating to professional fees | R$ 633676 | R$ 369938 | R$ 252915 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2018 | |
Restructuring Option Two | |
BASIS OF PRESENTATION | 1. BASIS OF PRESENTATION Oi S.A. - Under Judicial Reorganization – Debtor-in-Possession The Company is headquartered in Brazil, in the city of Rio de Janeiro, at Rua do Lavradio, 71 – 2º andar. The Company also holds: (i) through its wholly-owned subsidiary Telemar Norte Leste S.A. - Under Judicial Reorganization – Debtor-in-Possession Debtor-in-Possession The local and nationwide STFC long-distance concession agreements entered into by the Company and its subsidiary Telemar with ANATEL are effective until December 31, 2025. These concession agreements provide for reviews on a five-year basis and in general have a higher degree of intervention in the management of the business than the licenses to provide private services, and include several consumer protection provisions, as perceived by the regulator. On December 30, 2015, ANATEL announced that the review to be implemented by the end of 2015 had been postponed to April 30, 2016. Subsequently, On April 29, 2016, ANATEL decided, under a Resolution Circular Letter, to postpone until December 31, 2016 the execution of the revised agreements. On December 30, 2016 and under a Resolution Circular Letter, ANATEL postponed again the execution of the new concession agreements up to June 30, 2017. On June 29, 2017, ANATEL informed, in an official letter, that it would no longer make any further amendments to the concession agreements at this instance. Note that until the end of the concession agreement on December 31, 2025 there would still be a period for revision, on December 31, 2020. It is worth noting that Congress Bill 79/2016 provides for a special amendment of concession agreements to adjust them to the possibility of migrating from a public utility regime to an STFC service provision under a private law regime. Thus, if this bill is passed into law, the concession agreement is subject to amendment in any date other than December 31, 2020. Throughout the years, ANATEL initiated some procedures aiming at monitoring the Company’s financial situation, as well as to assess the Company’s ability to discharge its obligations arising from the terms of the concession agreements. In light of the approval of the Judicial Reorganization Plan by the creditors and its subsequent ratification by the competent court, ANATEL started to monitor the Oi Group Companies’ operating and financial positions based on the effectiveness of said Judicial Reorganization Plan (JRP). The Company is registered with the Brazilian Securities and Exchange Commission (“CVM”) and the U.S. Securities and Exchange Commission (“SEC”). Its shares are traded on B3 S.A. – Brasil, Stock Exchange, OTC, and its American Depositary Receipts (“ADRs”) representing Oi common shares and preferred shares traded on the New York Stock Exchange (“NYSE”). 1.1. JUDICIAL REORGANIZATION On June 20, 2016, Oi, together with its direct and indirect wholly owned subsidiaries Oi Móvel, Telemar, Copart 4 Participações S.A. – Under Judicial Reorganization - Debtor-in-Possession Debtor-in-Possession Debtor-in-Possession Debtor-in-Possession On November 29, 2017, the Judicial Reorganization Court determined once again the postponement of the General Creditors Meeting (“CGM”) to December 19, 2017, on its first notice to convene, which may continue on December 20, 2017, if necessary, and February 1, 2018, on its second notice to convene, which may continue on February 2, 2018, if necessary. On December 19, 2017, after confirming that the required quorum of classes I, II, III, and IV creditors was in attendance, the CGM was held and the JRP was approved by a vast majority of creditors on December 20, 2017. On January 8, 2018, the Judicial Reorganization Court issued a decision ratifying the JRP and granting the judicial reorganization to the Oi Companies. Said decision was published on February 5, 2018, initiating the period for the creditors of the Judicial Reorganization Debtors (“JR Debtors”) to elect one of the payment options to recover their claims, as provided for in the JRP, which ended on February 26, 2018, except for bondholders, whose deadline was extended to March 8, 2018, as decided by the Judicial Reorganization Court on February 26, 2018. On July 20, 2018, the Board of Directors ratified in part the Capital Increase – Claim Capitalization, approved at the Board of Directors’ meeting held on March 5, 2018. This approval was provided after verification of the results of the new common shares’ subscription calculation by the Company’s shareholders, which exercised their preemptive right and by the holders of the Qualified Bondholders’ Unsecured Claims through the capitalization of their related claims, as provided for by the JRP. Under Brazilian law, prior to issuing the Common Shares underlying the newly issued Common ADSs or the Warrants underlying the newly issued ADWs to holders of Defaulted Bonds, Oi was required to conduct a preemptive offer of those Common Shares and Warrants to all holders of its Common Shares and Preferred Shares. Holders of Common ADSs and Preferred ADSs were not entitled to participate in that preemptive offer. Holders of preemptive rights were entitled to subscribe to Common Shares and the associated Warrants during a subscription period commencing on June 15, 2018 and ending on July 16, 2018 at a subscription price of R$7.00 per Common Share. Holders of Common Shares and Preferred Shares subscribed for 68,263 Common Shares and 5,197 Warrants in the preemptive offer. The cash proceeds of the preemptive offer was required to be made available to holders of Defaulted Bonds in lieu of the subscribed Common Shares and Warrants. Under the JRP, the Qualified Recovery with respect to each US$1,000 of Qualified Bondholder Credits consisted of approximately: • US$195.61 aggregate principal amount of New Notes; • 38.57 Common ADSs representing 192.83 Common Shares for a total of 1,514,299,603 shares valued at $10,600,097,221 in partial settlement of the bonds; • 2.75 ADWs; and • US$0.01 in cash. In the July 28, 2018 Board of Directors meeting, the Board ratified the issuance of subscription warrants to subscribers who participated in the preemptive offering and to qualified Bondholders pursuant to the terms of the Capital Increase – Claims Capitalization. Pursuant to Article 72 of the Bylaws then in effect and because of a dilution of Company’s shareholding base in excess of 50% as a result of the Capital Increase – Claim Capitalization, the voting constraint therein was discontinued and immediately and irrevocably ceased to have any effect with respect to the exercise of voting rights by the Company’s shareholders. On July 31, 2018, the Company that it had completed the restructuring of the Companies under Reorganization with the implementation of the applicable JRP terms and conditions represented by the completion of the Capital Increase – Claim Capitalization. 1.2. CAPITAL INCREASE – NEW FUNDS As part of the approved JRP, on October 26, 2018, the Board of Directors approved the Capital Increase – New Funds, within the authorized capital ceiling set in Oi’s Bylaws, through the issuance of three billion, two hundred twenty-five million, eight hundred six thousand, four hundred fifty-one (3,225,806,451) new common shares, at the price of R$1.24 per share (“New Common Shares”), for total consideration of R$4.0 billion, in line with the JRP provisions. Any holder of Company common shares (“Common Shares”) and/or Company preferred shares (“Preferred Shares”), including the custody agent of the American Depositary Shares Program (“ADSs Custodian”) representing Company Common Shares and/or Company Preferred Shares (“ADS”), is ensured the preemptive right to subscribe New Common Shares issued as a result of the Capital Increase – New Funds, pursuant to Article 171 of Law 6404/1976. Any and all New Common Shares not subscribed by existing common and/or preferred shareholders under their preemptive rights are to be subscribe by the Backstop Investors pursuant the deadlines and terms of the Commitment Agreement between the Company and the Backstop Investors. The preemptive rights were eligible to be exercised upon effectiveness of the U.S. SEC registration statement the Company filed relating to the sale of New Common Shares and ADS. The SEC declared the registration statement effective on November 13, 2018, upon which the Company disclosed a Notice to Shareholders communicating the start date of the preemptive right exercise period, as well as other terms and conditions. Also on October 26, 2018, the Company became aware that the members of ANATEL’s Board of Directors unanimously decided to grant a preapproval of the Capital Increase – New Funds. Between October 3 and December 31, 2018, 115,913,355 common shares have been issued to pursuant to the exercise of warrants that were issued as part of the Capital Increase – Claims Capitalization transaction, including subscription warrants represented by 22,798,378 American Depository Warrants. On January 4, 2019, 275,985 common shares have been issued to pursuant to the exercise of warrants that were issued as part of the Capital Increase – Claims Capitalization transaction, including subscription warrants represented by 55,197 American Depository Warrants. The Subscription Warrants not exercised up to and including January 2, 2019 and the ADWs not exercised up to and including December 26, 2018 have expired and can no longer be exercised. On December 19, 2018, the Company noticed to Holders of ADSs informing that it changed certain terms of the Rights Offer. The Company entered into an amendment to the Commitment Agreement, under which the Backstop Investors holders of 60% of the total amounts of the backstop commitments (“Majority of the Backstop Investors”) agreed to extend the deadlines and waive certain pending conditions precedent to finance its backstop commitments, including the requirement to publish the updated General Universal Service Targets Plan (“New PGMU”). The Company also informed that it will pay to the ADS Depository the ADS issue rate of the New Common ADSs. As a result, the Deposit Amount of the New Common ADSs would no longer be used to pay the ADS issue rate, which would increase the portion returned to the holders of Common ADSs Rights exercised its Common ADSs Rights to subscribe the initial New Common ADSs or New Common ADSs Surpluses. On January 11, 2019, the Company’s Board of Directors verified and confirmed the issuance of 1,530,457,356 New Common Shares that were subscribed within the preemptive right exercise period of new common shares, at the issue price of R$1.24 per share, for total proceeds of R$1,897,767,121.44. From the total of New Common Shares issued, (i) 856,519,080 were delivered to the ADS Depositary so that the ADSs corresponding to such New Common Shares were issued, which were delivered to the holders of ADSs to exercise their preemptive rights, and (ii) 673,938,276 New Common Shares were delivered to the holders of common shares and preferred shares that exercised their respective preemptive rights. On the same date, the Company’s Board of Directors verified the result of the requests regarding the excess distribution of new common shares (“Excess New Common Shares”) not subscribed within the preemptive right exercise period of new common shares. The holders of common shares and preferred shares, including the ADS Depository, requested a total of 91,322,933 excess distribution shares. The Company’s Board of Directors also confirmed that because the number of Excess New Common Shares requested was lower than the total number of Excess New Common Shares available, the Excess New Common Shares requests filed by the holders of common shares and preferred shares and the holders of ADSs would be fully met. On January 21, 2019, the Company’s Board of Directors verified the payment of the Excess New Common Shares and confirmed the issue of 91,322,933 Excess New Common Shares subscribed by the holders of common shares and preferred shares, including 49,156,560 Excess New Common Shares subscribed by the ADS Depository pursuant to the instructions received from holders of ADSs, at the issue price of R$1.24 per share, which resulted in the contribution of R$113,000,000.00 to the Company. On the same date, the Company’s Board of Directors confirmed that the 1,604,268,162 New Common Shares not subscribed within the preemptive right exercise period and the subscription of Excess New Common Shares would be subscribed by the Backstop Investors, under the terms of the Plan and the Commitment Agreement. Also on the same date, the Company’s Board of Directors verified that the Backstop Investors representing 84.4% of the total guarantee commitment of the Capital Increase – New Funds elected, under the terms of the Plan and the Commitment Agreement, to receive the guarantee commitment premium de commitment of the Capital Increase – New Funds in common shares, as provided for by Section 5 of the Commitment Agreement, and approved, therefore, in strict compliance with the Plan and the Commitment Agreement confirmed in court, the issue of 272,148,705 shares (“Commitment Shares”). On January 28, 2019, the Company informed that, in compliance with the Plan and the terms of the Capital Increase – New Funds, on January 25, 2019 1,604,268,162 New Common Shares were subscribed and paid in, corresponding to the balance of common shares not subscribed by the shareholders within the preemptive right exercise period and the Excess New Common Shares period (“Balance of New Common Shares”). This concluded the Capital Increase – New Funds, provided for by Clause 6 of the Plan, through the subscription and payment of all 3,225,806,451 New Common Shares issued as part of the Capital Increase – New Funds, representing a contribution of new funds for the Company totaling R$4,000,000,000.00. The Company also informed that, in strict compliance with the Plan and the Commitment Agreement, the Backstop Investors that elected to receive their commitment premium in shares, as provided for by Clause 6.1.1.3 of the Plan and the Commitment Agreement, subscribed and paid in the Commitment Shares, issue price of R$1.24 per share, in the form of American Depositary Shares. In light of the outcome of the subscription and payment of the New Common Shares issued as part of the Capital Increase – New Funds and the Commitment Shares, the Company’s paid-in paid-in 1.3. CREDITORS SETTLEMENT PROGRAM On June 23, 2017, as authorized by the Judicial Reorganization Court, the Company initiated a program to enter into settlement agreements with the Oi Companies’ creditors listed in the Judicial Administrator’s List of Creditors, published on May 29, 2017 (“Oi Creditor” and “Creditors Settlement Program” or “Program”, respectively), and creditors could join the program via the website www.credor.oi.com.br The Creditors Settlement Program was applicable for creditors with claims amounting to R$50,000 or lower, and allowed the prepayment of 90% of the claim on the acceptance of the creditor and the remaining 10% of the claim after the approval of the JRP, to be paid under the terms and conditions of the Creditors Settlement Program. A Oi Creditor whose claim was higher than R$50,000 would be entitled to join the Creditors Settlement Program, in which case they would receive a R$50,000 prepayment, upon acceptance by such Oi Creditor of the settlement under the terms and conditions set out in the Creditors Settlement Program and the exceeding amount will be paid as set out in the Plan. The Creditors Settlement Program benefited the participating Oi Creditors as it allowed for the prepayment of part of the amount under the Program. Approximately 35,000 creditors jointed the Creditors Settlement Program, of which about 30,000 in Brazil and 5,000 in Portugal, and approximately R$360 million were made available for the prepayment of the settlements entered into under the Program. 1.4. PRE-PETITION CLAIMS, REGULATORY AGENCIES The Company has reported that it has knowledge of regulatory punitive administrative proceedings and lawsuits that could amount to approximately R$14.5 billion as at June 30, 2016, including fines imposed, expected fines to be imposed and corresponding monetary variations. The Company disagreed and challenged a material portion of the noncompliance events pointed out by ANATEL and challenged the disproportionateness of the punitive actions taken, emphasizing their unreasonableness. The JRP, as approved at the CGM on December 20, 2017 and subsequently ratified by the Judicial Reorganization Court on January 8, 2018, lays down the payment method Pre-petition non-tax (i) Payment of nontax pre-petition st th st th st th st th th Because the other nontax pre-petition Note, however, that ANATEL filed interlocutory appeal No. 001068-32.2018.8.19.0000 Accordingly, the court decisions in effect establish that ANATEL’s non-tax Pre-petition 1.5. PAYMENT PROPOSALS IN THE JRP APPROVED AT THE CGM ON DECEMBER 20, 2017, RATIFIED BY THE JUDICIAL REORGANIZATION COURT ON JANUARY 8, 2018 AND IN EFFECT BY DECEMBER 31, 2018 The Oi Group’s creditors shall become creditors of the debt(s) issued by the JR Debtor that was their original debtor. CLAIMS FROM CREDITORS This section presents a summarized version of the key terms of the repayment Plan to Oi Group Creditors, including certain information on the financial terms and conditions included in the JRP. Note that, as defined in Appendix 1.1 to the JRP, the publication date of the Judicial Reorganization Court’s decision ratifying the JRP, i.e., the lower court decision granting the judicial reorganization, against which no appeal with a suspensory effect is upheld, which is January 8, 2018, published on the Official Gazette on February 5, 2018, is taken into consideration for purposes of the way the time limit in the payment terms is counted. According to the approved JRP, there are 4 Classes of creditors, as follows: Class I – Labor Claims General rule: labor claims shall be paid in five (5) equal monthly installments, with a 180-day six-month Labor Claims that are collateralized by judicial deposits: • Shall be paid through the immediate withdrawal of the amount deposited in court. • If the deposited amount is lower than the debt listed by the Oi Companies, the deposit shall be used to pay part of the debt and the outstanding balance shall be paid after a decision is issued by the Court that ratifies the amount due in five (5) equal monthly installments, with a 180-day Labor Claims not collateralized by judicial deposits shall be paid via judicial deposits attached to the court records of the related case. Fundação Atlântico (pension fund) claims: • Payable in six (6) annual, equal installments, with a five-year grace period as from the Court Ratification of the Plan. • Interest/monetary variation: five-year grace period for interest. National Consumer Price Index (INPC) + 5.5% per year, levied as from the Court Ratification of the Plan, annually accrued during the grace period and payable annually, as from the sixth year, together with the principal installments. Class II – Collateralized Payables Class 2 claims shall be paid as follows: Each creditor shall receive the original debt amount, as disclosed in the List of Creditors, adjusted by the interest/monetary variation rate, as follows: Principal shall be repaid as follows: • 72-month • Principal shall be repaid in 108 monthly installments, as described in the table below: Months Percentage of the amount to be 0 a 72 nd 0.0% 73 rd nd 0.33% 133 rd th 1.67% 180 th 1.71% • Four-year grace period on interest. Interest: Long-term Interest Rate, released by the Central Bank, plus spread of 2.946372%, where the interest levied in the first four (4) years shall not be paid and shall be accrued annually and added to the principal. Classes III and IV – Unsecured Creditors and MBOs/SBs The payment proposal for claims of Unsecured Creditors and Micro-business Owners (“MBOs”) and Small Businesses (“SBs”) is described below, according to the thresholds established in the JRP: Linear payment to Unsecured Creditors: • Linear payment to Unsecured Creditors: Unsecured Creditors’ and MEs/EPPs’ claims of amounting up to R$1,000 were paid in a single installment within 20 business days after the Court Ratification of the Plan. • Unsecured Creditors and MEs/EPPs with claims above R$1,000 can elect to receive their claims in a single installment, providing that they agree to receive only R$1,000 as the full payment of their claims an related costs, payable within 20 business days after the end of the period to elect the payment option. Unsecured Creditors with Judicial Deposits: Claim Amount Interval Discount % Up to R$1,000.00 0% R$1,000.01 to R$5,000.00 15% R$5,000.01 to R$10,000.00 20% R$10,000.01 to R$150,000.00 30% Over R$150,000.00 50% • Shall be paid through the withdrawal of the deposited amount; • If the deposit is lower than the debt (after the discount above, as applicable), the deposit shall be used to pay part of the debt and the outstanding balance shall be paid after a decision issued by the competent court that ratifies the amount due according to the General Payment Method described below; • If the deposit is higher than the debt (calculated after the discount above, as applicable), The Oi Companies shall withdraw the difference. Unsecured Creditors and MEs/EPPs that are not paid as provided for above can opt for payments using one of the five restructuring options described below, limited to a maximum amount per offer. Restructuring Option 1: • Part of Classes 3 and 4 claims shall be denominated in Brazilian reais by the amount of Classes 3 and 4 Creditors that elected this option, up to a ceiling of R$10,000,000,000; these Creditors can elect one of the following methods: (i) claim restructuring; (ii) private debentures, or (iii) public debentures. • Part of Classes 3 and 4 claims shall be denominated in US dollars by the amount claimed of Classes 3 and 4 Creditors that elected this option, up to a maximum of US$1,150,000,000. • 60-month • Principal shall be repaid in 24 semiannual, successive installments, as shown in the table below: Six-month Percentage of the amount to be six-month 0 to 10 th 0.0% 11 th th 2.0% 21 st rd 5.7% 34 th 5.9% • The interest rate shall be (i) an annual rate equivalent to 80% of the interbank deposit rate (CDI) for claims denominated in Brazilian reais and (ii) 1.75% per year for claims denominated in US dollars; interest shall be annually accrued to the principal and paid semiannually as from the 66 th • Once this offer’s maximum amounts are reached, the outstanding balances of the claims payable under this offer shall be paid according to the General Payment Method described below. Restructuring Option 2: • The claims of the Creditors that elect this payment method shall be restructured in US dollars within up to six (6) months after the Court Ratification of the Plan, limited to a maximum of US$850,000,000. • 60-month • Principal shall be repaid in 24 semiannual, successive installments, as shown in the table below: Six-month Percentage of the amount to be six-month 0 to 10 th 0.0% 11 th th 2.0% 21 st rd 5.7% 34 th 5.9% • Interest of 1.25% per year, annually accrued to the principal and paid semiannually as from the 66th month after the Ratification of the Judicial Reorganization Plan, where: • During the principal grace period, 10% of total interest shall be paid semiannually, while the remaining 90% shall be accrued to the principal annually. After this period, 100% of total interest shall be paid semiannually. • Once this offer’s maximum amounts are reached, the outstanding balances of the claims payable under this offer shall be paid according to the General Payment Method described below. • The creditors’ rights granted under this offer can only be assigned with the prior consent of Oi. Restructuring Option 3: Restructuring of unqualified bonds: • This offer is available only to bondholders with claims up to US$750,000, and it is limited to a maximum of US$500,000,000. • 50% discounts, firstly applied to interest and subsequently to principal. • Grace period on principal: six years as from the Ratification of the Plan. • Principal shall be equivalent to 50% of the unqualified bondholders’ claims, capped at US$250,000,000, and shall be repaid in twelve (12) semiannual, successive installments, as shown in the table below: Six-month percentage of the amount to be six-month 0 to 12 th 0.0% 13 th th 4.0% 19 th rd 12.66% 24 th 12.70% • Interest: 6% per year in US dollars, annually accrued to the principal as from the 78 th Restructuring of qualified bonds: • This offer is available only to bondholders with claims in excess of US$750,000, which will receive the following: • Common shares issued by Oi and currently held by PTIF; • New notes; • New I Common Shares; and • Subscription Warrants • Exchange ratios: for each US$664,573.98: • 9,137 common shares issued by Oi and currently held by PTIF; • New Notes, issued at the overall price of US$145,262, which consists of a par value of US$130,000 and an issue premium of US$15,262; • 119,017 New I Common Shares; • 9,155 Subscription Warrants. Note: the exchange ratios assume that the number of Oi common shares and Oi preferred shares is 825,760,902. • The New Notes shall be issued in US$1,000 multiples and shall have a maximum par value of R$6,300,000,000, equivalent to a maximum par value of US$1,918,100,167. • Maturity: 7 th • Principal: shall be repaid in a bullet payment maturing on the 84 th • Interest: can be paid under one of the following two methods: • 10% per year, paid semiannually; or • During the first three (3) years as from the plan’s ratification, 12% interest paid semiannually, of which 8% of the annual interest paid is in cash semiannually and 4% compounded semiannually and paid in the 36 th th • The New I Common Shares shall be due as a result of the capital increase, through the capitalization of the claims: • Up to 1,756,054,163 New I Common Shares shall be issued with par value ranging from R$6.70 to R$7 to a total ranging from R$11,765,562,892.10 to R$12,292,379,141. • Subscription warrants: Oi shall issue up to 135,081,089 subscription warrants. On June 13, 2018, ANATEL agreed with the restructuring of the qualified bonds, in Decision No. 336/2018, authorizing the stages necessary for the capital increase of the other actions required for complying with Clause 4.3.3.2 of the JRP. Specifically, the authorized conversion entailed the issue of new shares, the dilution of the current shareholders’ interests, the capital increase, and the change of the Company’s current shareholding structure. ANATEL ratified the determination of any change in the Company’s Board of Directors that must be previously submitted to the Regulator’s review. On June 18, 2018, the Superintendent General of the Administrative Economic Defense Council (“CADE”) (Brazilian antitrust authority) decided, under SG Order No. 753/2018, not to acknowledge the qualified bonds’ restructuring transaction, which had been cautiously notified to said authority exclusively to ensure the compliance with JRP within the prescribed deadlines. According to the CADE Superintendent General, the transaction was not acknowledged because it did not meet the revenue requirement prescribed by Law 12529/2011. No complaints were filed against this decision. With the confirmation of the CADE’s decision and taking into account ANATEL’s Steering Board’s decision that granted the preapproval requested by the Company to complete the capital increase provided for by Clause 4.3.3.2 of the JRP, all the conditions precedent listed by the Plan, needed to undertake said capital increase, were either verified or waived, considering that the related conversion of debt into equity instruments was implemented after the ratification of the JRP, on February 5, 2018. Restructuring Option 4: General Payment Method This offer applies to creditors that do not meet the terms and conditions of the previous offers or if the offers highlighted above exceed their maximum amounts and the creditor still holds an outstanding balance. • Principal shall be repaid in five (5) equal annual, successive installments after the 20-year • Interest/monetary variation: • Interest equivalent to TR, a benchmark rate, per year in the case of unsecure claims whose holders elect to receive payment for their claims in Brazilian reais; this interest shall be levied as from the Court Ratification of the Plan, and total interest and monetary variation accrued in the period shall be paid only and together with the last principal installment. • No interest, in the case of unsecured claims whose holders elect to receive payment for their claims in US dollars. • The Company shall have an early repayment option consisting of the payment of 15% of principal and accrued interest. • Payment maximum: R$70,000,000,000, minus the amount of pre-petition Restructuring Option 5: Strategic Supplier Creditors • The claims of Strategic Supplier Creditors, suppliers of goods and/or services that kept the terms and conditions practiced prior to the filing of the Judicial Reorganization Plan, that do not arise from loans or financing facilities granted to the Oi Companies, shall be paid, up to a maximum of R$150,000, within up to 20 business days after the end of the period to elect the payment option. If these suppliers have claims in excess of R$150,000, they shall receive the outstanding amount minus a 10% discount in four (4) equal annual, successive installments, plus (i) TR + 0.5% in the case of real-denominated claims and (ii) 0.5% per year in the case of US dollar- or euro-denominated claims. CLAIMS FROM RELATED PARTIES Claims that refer to intragroup loans among the JR Debtors, by using cash generated by transactions conducted in the international market by the JR Debtors, shall be paid as described below: • Principal shall be repaid beginning on the 20 th • Interest/monetary variation: TR for real-denominated intragroup claims 0.5%, levied as from the Court Ratification of the Plan. Total interest and monetary variation accrued in the period shall be paid only and together with the last principal installment. No interest, in the case of dollar- or euro-denominated intragroup claims. The Oi Companies may mutually agree an alternative method for the settlement of intragroup claims, under the originally agreed terms and conditions, including, but not limited to, by netting their payables and receivables, as provided for by the law. CASH SWEEP Unsecured Creditors, MEs/EPPs, and Secured Creditors can accelerate the receipt of their claims against the Oi Companies with the cash sweep, which shall be proportionally distributed among the claims, under the following terms: • In the first five (5) years after the Court Ratification of the Plan, the Oi Companies shall assign the equivalent to 100% of the net revenue from the sale of assets that exceeds US$200 million. • Beginning on the 6 th • The Minimum Cash Balance is defined as the higher of: (i) 25% of the aggregate of prior year’s OPEX and CAPEX; or (ii) R$5 billion. • Additionally, any funds originating from a capital increase shall be added to the calculation of the Minimum Cash Balance. CAPITAL INCREASES – NEW FUNDS Pursuant to the shareholders’ preemptive right and fulfilling or waiving the conditions precedent provided for in the Backstop Agreement or the JRP, the Company was required to make a Capital Increase – New Funds totaling R$4,000,000,000. The Issue Price of the New II Common Shares was calculated by dividing R$3,000,000,000 by the number of Oi shares outstanding on the business day immediately prior to the capital increase, taking into consideration possible adjustments provided for in the Backstop Agreement. Taking into consideration the terms and conditions of the Backstop Agreement, a commitment fee of 8% in US dollars or 10% in Company common shares was due to the investors identified in the Backstop Agreement that committed to promptly provide or obtain firm commitments for the full subscription of the capital increase, as established in said Backstop Agreement. On January 25, 2019, 272,148,705 Common Shares have been issued in a private placement to the Backstop Investors and paid US$13 million to the Backstop Investors as compensation for their commitments under the Commitment Agreement. FURTHER OBLIGATIONS AND OTHER RELEVANT SITUATIONS: Restriction to Dividend Payments The JR Debtors shall only distribute dividends to their shareholders as follows: (i) u |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | 2. SIGNIFICANT ACCOUNTING POLICIES The accounting policies detailed below have been consistently applied in all periods presented in these financial statements, including the effects of adopting ASC 852 Reorganizations Basis of presentation and going concern assumption These consolidated financial statements have been prepared according to United States Generally Accepted Accounting Principles (“U.S. GAAP”), which have been prepared under the assumption that the Company will continue as a going concern. In August 2014, the FASB issued an accounting standard update that requires management to assess whether there are conditions or events, considered in aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the financial statements are issued. If substantial doubt exists, additional disclosures are required. This update was effective for the Company’s annual periods starting ended December 31, 2016. The Company’s assessment of our ability to continue as a going concern is further discussed below. The retention of a large amount of funds in court deposits arising from discussions within the regulatory, labor, tax, and civil scope, with immediate impact on the liquidity of Oi Group, as well as with the imposition of high administrative fines, particularly by ANATEL, has contributed to the worsening financial situation in prior years. Additionally, the change in the standards of consumption of telecommunication services, due to the technological evolution, worsened this scenario of financial difficulties even more. With the mass supply of mobile telephony, cable TV and Internet services, the attractiveness of fixed telephony services have been reduced, resulting in a decrease in the base of subscribers of Oi Group in this segment. The financial statements for the year ended December 31, 2018, has been prepared assuming that the Company will continue as a going concern and in compliance with the legal requirements applicable to a judicial reorganization. The judicial reorganization is aimed at ensuring the continuation of the Oi Companies as going concerns. The likelihood that the Oi Companies will continue as going concerns increased with the approval of the JRP by a vast majority of creditors, at the General Creditors’ Meeting held on December 20, 2017, and approval that was ratified by the Judicial Reorganization Court on January 8, 2018. This ratification decision was issued on February 5, 2018 and, as a result, there was the novation of the involved borrowings and financing and the related balances recalculated pursuant to the terms and conditions of the Judicial Reorganization Plan, in accordance with the actions needed for its implementation. On July 27, 2018, the Company completed the Capital Increase – Claim Capitalization, through the formalization of the capitalization of part of the Unsecure Claims of the Qualified Bondholders, as provided for by the JRP and approved at the Board of Directors’ meeting held on March 5, 2018. The new shares issued were delivered to Company’s shareholders who exercised their preemptive rights and the holders of the Unsecure Claims of the Qualified Bondholders, through the formalization of the capitalization of their claims. Finally, on January 25, 2019, the Company completed the capital increase provided for by the JRP through the issue of 3,225,806,451 common shares for an aggregate subscription amount of R$4,000,000. The company believes that it has sufficient funds to continue as a going concern and discharge its obligations in the coming twelve months. The continuity of the Company as a going concern is ultimately depending on the successful outcome of the judicial reorganization and the realization of other forecasts of the Oi Companies. The Company has been successfully discharging the obligations set forth in the judicial reorganization proceedings and so far there have been no indications in this regard, we emphasize that these conditions and circumstances are herein described because of their own nature indicating the existence of uncertainty that may affect the success of the judicial reorganization and that it may cast doubts as to the Oi Companies’ ability to continue as going concerns. 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 The estimate of the expected amount of the allowed claim under contingencies, following ASC 852 Reorganizations Change in Accounting Estimates Allowance for doubtful accounts The Company review its estimates of allowance for doubtful accounts considering the incurred loss model, including the effects of probable losses on accounts receivable taking into account the measures implemented to restrict the provision of services to and collect late payments from customers. Consolidated Financial Statements The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries, including the ones under bankruptcy in foreign jurisdictions (Oi Holanda and Portugal Telecom International Finance B.V) which were under the Company´s control as of December 31, 2018. 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. The assets and liabilities related to the operations in Africa are stated in a single line item of the balance sheet as held-for-sale The table below shows the equity interests held in the capital of the Company’s subsidiaries: Companies related to the continuing operations Company Core business Home country Direct 2018 Indirect 2018 Direct 2017 Indirect 2017 Oi Holanda Raising funds in the international market The Netherlands 100 % 100 % Portugal Telecom International Finance B.V Raising funds in the international market The Netherlands 100 % 100 % CVTEL, BV Investment management The Netherlands 100 % 100 % Carrigans Finance S.à.r.l. Investment management Luxembourg 100 % 100 % Copart 5 Property investments Brazil 100 % 100 % Rio Alto Gestão de Créditos e Participações S.A. (“Rio Alto”) Receivables portfolio management and interests in other entities Brazil 100 % 100 % Oi Serviços Financeiros S.A. (“Oi Serviços Financeiros”) Financial services Brazil 99.87 % 0.13 % 99.87 % 0.13 % Bryophyta SP Participações Ltda. Property investments Brazil 99.80 % 0.20 % 99.80 % 0.20 % Telemar Fixed telephony – Region I Brazil 100 % 100 % Oi Móvel Mobile telephony – Regions I, II, and III Brazil 100 % 100 % Paggo Empreendimentos S.A. Payment and credit systems Brazil 100 % 100 % Paggo Acquirer Gestão de Meios de Pagamentos Ltda. Payment and credit systems Brazil 100 % 100 % Paggo Administradora Ltda. (“Paggo Administradora”) Payment and credit systems Brazil 100 % 100 % Serede – Serviços de Rede S.A. (“Serede”) Network services Brazil 17.51 % 82.49 % 18.57 % 81.43 % Brasil Telecom Comunicação Multimídia Ltda. (“BrT Multimídia”) Data traffic Brazil 100 % 100 % Copart 4 Property investments Brazil 100 % 100 % Dommo Empreendimentos Imobiliários Ltda. Purchase and sale of real estate Brazil 100 % 100 % Brasil Telecom Call Center S.A. (“BrT Call Center”) Call center and telemarketing services Brazil 100 % 100 % BrT Card Serviços Financeiros Ltda. (“BrT Card”) Financial services Brazil 100 % 100 % Pointer Networks S.A. (“Pointer”) Wi-Fi Brazil 100 % 100 % Pointer Peru S.A.C Wi-Fi Peru 100 % 100 % VEX Venezuela C.A Wi-Fi Venezuela 100 % 100 % VEX USA Inc. Wi-Fi United States of America 100 % 100 % VEX Ukraine LLC Wi-Fi Ukraine 40 % 40 % Companies classified as assets held for sale Company Core business Home Direct 2018 Indirect 2018 Direct 2017 Indirect 2017 PT Participações, SGPS, S.A. (“PT Participações”) Management of equity investments Portugal 100 % 100 % Oi Investimentos Internacionais S.A. (“Oi Investimentos”) Business consulting and management services, preparation of projects and economic studies, and investment management Portugal 100 % 100 % Africatel GmbH & Co.KG. Investment management Germany 100 % 100 % Africatel GmbH Investment management Germany 100 % 100 % Africatel Holdings, BV Investment management The Netherlands 86 % 86 % PT Ventures, SGPS, S.A. Management of equity interests in the context of international investments Portugal 86 % 86 % Directel - Listas Telefónicas Internacionais, Lda. (“Directel”) Telephone directory publishing and operation of related databases, in international operations Portugal 86 % 86 % TPT - Telecomunicações Publicas de Timor, S.A. (“TPT”) Provision of telecommunications, multimedia and IT services, and purchase and sale of related products in Timor Portugal 76.14 % 76.14 % Directel Cabo Verde – Serviços de Comunicação, Lda. Telephone directory publishing and operation of related databases in Cape Verde Cape Verde 51.60 % 51.60 % Kenya Postel Directories, Ltd. Production, publishing and distribution of telephone directories and other publications Kenya 51.60 % 51.60 % Elta - Empresa de Listas Telefónicas de Angola, Lda. Telephone directory publishing Angola 47.30 % 47.30 % Timor Telecom, S.A. Telecommunications services concessionaire in Timor Timor 44 % 44 % CST – Companhia Santomense de Telecomunicações, S.A.R.L. Operation of fixed and mobile telecommunication public services in Sao Tomé and Principe Sao Tomé 43.86 % 43.86 % LTM - Listas Telefónicas de Moçambique, Lda. Management, publishing, operation and sale of telecommunications subscriber and classified ads directories Mozambique 43 % 43 % The equity interests in joint arrangements and interests in associates are measured using the equity method and are as follows: Company Core business Home Direct 2018 Indirect 2018 Direct 2017 Indirect 2017 Companhia AIX de Participações (“AIX”) Data traffic Brazil 50 % 50 % Paggo Soluções e Meios de Pagamento S.A. (“Paggo Soluções”) Financial company Brazil 50 % 50 % Gamecorp S.A. (“Gamecorp”) Pay TV service, except programmers Brazil 29.90 % 29.90 % Hispamar Satélites S.A. (“Hispamar”) Satellite operation Brazil 19.04 % 19.04 % 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. 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 translated at the prevailing rate 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. At December 31, 2018 and 2017, the foreign currency-denominated assets and liabilities were translated into Brazilian Reais using mainly the following foreign exchange rates: Closing rate Average rate Currency 2018 2017 2016 2018 2017 2016 Euro 4.4390 3.9693 3.4384 4.3094 3.6089 3.8543 US dollar 3.8748 3.3080 3.2591 3.6558 3.1925 3.4833 Cape Verdean escudo 0.0403 0.0360 0.0313 0.0391 0.0327 0.0352 Sao Tomean dobra 0.000185 0.000162 0.000140 0.000177 0.000149 0.000160 Kenyan shilling 0.0381 0.0321 0.0318 0.0361 0.0309 0.0343 Namibian dollar 0.2698 0.2687 0.2325 0.2764 0.2401 0.2369 Mozambican metical 0.0627 0.0565 0.0450 0.0601 0.0499 0.0579 Angolan kwanza 0.0126 0.0200 0.0197 0.0147 0.0193 0.0214 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, defined by the Company as the Board of Executive Officers (“Comitê de Gestão”). 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. There were no business combinations for the years presented. Investment Securities Investment securities at December 31, 2018 and 2017 consist of short-term and long-term investments classified as trading and an investment at Unitel and CVT are classified as available-for-sale. available-for-sale available-for-sale A decline in the market value of any available-for-sale year-end, Cash and cash equivalents This caption includes cash and cash fund, banks, and highly liquid short-term investments (usually maturing within less than three months), immediately convertible into a known cash amount, and subject to an immaterial risk of change in value, which are stated at fair value at the end of the reporting period and which do not exceed their market value, and whose classification is determined as shown below. Cash investments Cash investments are classified according to their purpose as: (i) trading securities; (ii) held to maturity; and (iii) available for sale. Trading security investments are measured at fair value and their effects are recognized in profit or loss. Held-to-maturity Available-for-sale available-for-sale 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 Non-current Long-lived assets are classified as held-for-sale if its carrying amount is will be recovered principally through a sale transaction rather than through continuing use and if meet they the held-for-sale criteria. For this to be the case, the disposal must be available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets, and its sale must be probable. The results of discontinued operations are reported in one line item 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, including any gain or loss recognized as adjustment of the carrying amount to fair value less cost to sell. Property, plant and equipment Property and equipment consists of transmission equipment, trunking and switching stations, metallic and fiber-optic cable networks and lines, underground ducts, posts and towers, data communication equipment, network systems and infrastructure and motor-generator groups. 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. Costs of major replacements and improvements are capitalized. Repair and maintenance expenditures that do not enhance or extend the asset’s useful life are charged to operating expenses as incurred. Depreciation is calculated on a straight-line basis, based on the estimated useful lives of the assets. The Company reviews the useful lives annually. 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. Regulatory licenses acquired in a business combination are amortized over the STFC concession period. The regulatory licenses for the operation of the mobile telephony services are recognized at cost of acquisition and amortized over the effective period of each licenses. Long-lived assets Long-lived assets include assets that do not have indefinite lives, such as property, plant, and equipment, and purchased intangible assets subject to amortization. They are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If any indicators of impairment are present, it is performed a test for recoverability. The carrying value of a long-lived asset or asset group is not recoverable if it exceeds the sum of the undiscounted cash flows expected to be generated from the use and eventual disposition of the asset or asset group. If the undiscounted cash flows do not exceed the asset or asset group’s carrying amount, then an impairment loss is recorded, measured as the amount by which the carrying amount of a long-lived asset or asset group exceeds its fair value. Provision for contingencies Liabilities for loss contingencies arising from claims, assessment, litigation, fines and penalties are recorded when a present obligation as a result of past events exists, it is probable that a loss will occur and a reliable estimate of the obligation can be made. These liabilities do not include estimates of legal fees and other directly related costs to be incurred, and it takes into consideration the opinion of the management and its in-house 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. Private pension plans and other postretirement benefits sponsored by the Company and its subsidiaries for the benefit of their employees are managed by two foundations. Contributions are determined based on actuarial calculations, when applicable, and charged to profit or loss on the accrual basis 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 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 Revenue recognition Effective January 1, 2018 the Company adopted Accounting Standards Update (“ASU”) 2014-09, 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. 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. They also include banking fees and costs, financial intermediation costs on the collection of trade receivables, and other financial transactions. Income taxes Income taxes are recorded under the asset and liability method. Deferred taxes assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their tax basis and for tax loss carryforwards. Deferred tax asset is reduced by a valuation allowance if, based on the weight of evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized. 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 of benefit that is greater than 50 percent likely of being realized upon settlement. 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. In Brazil, all audit periods prior to 2013 are closed for federal examination purposes. As of December 31, 2018 and 2017, 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. Recent Accounting Pronouncements Adopted in 2018 On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09, ASC 606 establishes a new five-step model that to account for revenue from contracts with costumers. Pursuant to ASC 606, revenue is recognized in an amount that reflects the consideration that an entity expects to be entitled to in exchange from the transfer of goods or services to a customer. The new revenue standard supersedes all the revenue recognition requirements in effect until December 31, 2017 pursuant to U.S. GAAP. Management determined the following impacts from adopting the new standard on January 1, 2018: Sales of handheld devices at a discount The Company offers its customers, who have acquired a given service package or entered into certain mobility contracts, handheld devices at a discount. Since the equipment (cellphone) is not a key condition for the provision of the service and there is no customization by the Company to offer the service using a given device, the Company considers such sale a separate performance obligation. Pursuant to ASC 606, the discount should be allocated to the performance obligations arising on the sale of plans and in a mobility contract and the revenue from the sale of handheld devices should increase due to the recognition of the revenue from the sale of cellphones at the time the control over the good is transferred to the customer, while the service revenue should be reduced throughout the transfer of the promised service. The total revenue earned throughout the entire service agreement will not change and there will be no change either in the revenue process from customers and the Company’s cash flows. The Company did not identify the significant financial impact on the sale of cellphones at a discount because the discounts amount is immaterial compared to the Company’s revenue as a whole. Revenue from registration/service installation fees The registration/installation fee collected from customers at the time a contract is nonrefundable and refers to the activity the Company is required to undertake when entering into a contract or a comparable activity required to fulfill such contract, while such activity does not entail the transfer of a good or the service promised to the customer. The fee is an advance payment for future goods or services and, therefore, should be recognized as revenue when such goods or services are supplied. For purposes of complying with ASC 606, considering that such fees are a separate performance obligation, revenue must be recognized together with the revenue of said service provision, i.e., it should be deferred and recognized in profit or loss throughout the contract period. As at January 1, 2018, the Company and its subsidiaries recognized a contractual liability as a contra entry to accumulated losses, which generated the deferral of the revenue from registration/installation fee according to contract duration (12 months), amounting to R$138 million, net of taxes. Recognition of costs incurred on the performance of a contract The Company must recognize as an asset the incremental costs incurred to obtain a contract with a customer that are expected to be recovered, and must recognize an impairment loss in profit or loss as the carrying amount of the recognized assets exceeds the remaining amount of the consideration the Company expects to receive in exchange for the goods and services to which the asset refers. The Company must recognize in assets certain costs, substantially commissions on sales, which are currently recognized directly in profit or loss and recognize them on a systematic basis, consistent with the transfer of the goods and services to which the asset refers to the customer. As at January 1, 2018, the Company and its subsidiaries recognized a contractual asset as a contra entry to accumulated losses, which generated the deferral of the costs incurred over the performance contract that were recognized in profit or loss based on the transfer of the goods and services to each customer (churn), amounting to R$793 million, net of taxes. The Company adopted ASC 606, taking into account the modified retrospective application permitted by the respective standards. Accordingly, we present below the consolidated results for the years ended December 31, 2018, less the effects recognized as a result of this application, compared with December 31, 2017. 12/31/2018 ASU ASC 606 12/31/2018 12/31/2017 Net operating revenue 22,060,014 15,588 22,075,602 23,789,654 Cost of sales and/or services (15,822,732 ) (15,822,732 ) (15,676,216 ) Gross profit 6,237,282 15,588 6,252,870 8,113,438 Operating income (expenses) Selling expenses (4,478,352 ) (119,214 ) (4,597,566 ) (4,399,936 ) General and administrative expenses (2,697,865 ) (2,697,865 ) (3,064,252 ) Other operating income (expenses), net 417,159 417,159 (1,043,922 ) Reorganization items, net 31,580,541 31,580,541 (2,371,918 ) Income (loss) before financial and taxes 31,058,765 (103,626 ) 30,955,139 (2,766,590 ) Financial expenses, net (4,012,067 ) (4,012,067 ) (1,612,058 ) Income (loss) before income taxes 27,046,698 (103,626 ) 26,943,072 (4,378,648 ) Income tax (current and deferred) 347,139 35,233 382,372 350,987 Net income (loss) for the year 27,393,837 (68,393 ) 27,325,444 (4,027,661 ) Recognition and Measurement of Financial Assets and Financial Liabilities - In January 2016, the FASB issued ASU 2016-01, New Accounting Standards Leases - In February 2016, the FASB issued ASU 2016-02, 2016-02 on-balance 2016-02 At the lease commencement date, the lessee shall recognize a liability related to the lease payments (i.e., a lease liability) and a lease asset that represents the right to use the underlying asset during the lease term (i.e., a right-of-use right-of-use There is no significant change in the lessor’s recognition based on ASC 842 regarding the current accounting. The lessors shall continue to classify all |
FINANCIAL INSTRUMENTS AND RISK
FINANCIAL INSTRUMENTS AND RISK ANALYSIS | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
FINANCIAL INSTRUMENTS AND RISK ANALYSIS | 3. FINANCIAL INSTRUMENTS AND RISK ANALYSIS 3.1. Overview The table below summarizes the financial assets and financial liabilities carried at fair value at December 31, 2018 and 2017, excluding Liabilities subjected to compromise (note 28). Accounting 2018 2017 Carrying Fair value Carrying Fair value Assets Cash and banks Fair value 287,491 287,491 277,500 277,500 Cash equivalents Fair value 4,097,838 4,097,838 6,585,184 6,585,184 Short-term investments Fair value 238,962 238,962 136,286 136,286 Accounts receivable (i) Amortized cost 6,516,555 6,516,555 7,367,442 7,367,442 Available-for-sale Fair value 1,843,778 1,843,778 1,965,972 1,965,972 Dividends receivable Amortized cost 2,566,935 2,566,935 2,012,146 2,012,146 Liabilities Trade payables (i) Amortized cost 8,818,870 8,818,870 5,170,970 5,170,970 Borrowings and financing (ii) (iv) Amortized cost 7,140,960 7,140,960 54,251 54,251 Public debentures (iv) 3,103,106 3,103,106 Senior notes 6,205,840 6,937,764 Dividends and interest on capital Amortized cost 6,168 6,168 6,222 6,222 Licenses and concessions payable (iii) Amortized cost 85,619 85,619 20,910 20,910 Tax refinancing program (iii) Amortized cost 553,206 553,206 888,777 888,777 (i) The balances of accounts receivables and trade payables have near terms and, therefore, they are not adjusted to fair value. Under the terms and conditions of the Plan, suppliers claiming up to R$150,000, would receive their claims within up to 20 business days, after the date they elect this payment option, which ended on February 26, 2018. As for suppliers claiming more than R$150,000, in turn, would receive the remaining balance in four annual installments, which were adjusted to present 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. (iv) As a result of the approved Judicial Reorganization Plan, borrowings and financing were novated and their balances recalculated pursuant to the existing terms and conditions, in accordance with the plan’s stages for debt restructuring purposes. The present value adjustment recognized on the balance sheet with respect to each financial liability is amortized on a straight-line basis over the term of that financial liability as a financial expense. Fair value of financial instruments Except for liabilities subject to compromise, 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 As at December 31, 2018, the Company no longer was a party to derivative transactions in effect. Due to the absence of derivative financial instruments in the portfolio as at this date and in 2017, there were no changes in foreign derivative transactions designated or not designated for hedge accounting purposes. (b) Non-derivative 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. With reference to the fair values of the financial investments in Unitel and CVT, classified as an held-for-sale The Company monitors and periodically updates the key assumptions and critical estimates used to calculate fair value. (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. The description of three-level hierarchy is presented below: 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 during December 31, 2018 and 2017. Fair value Fair value Fair value Assets Cash Level 1 287,491 277,500 Cash equivalents Level 2 4,097,838 6,585,184 Short-term investments Level 2 238,962 136,286 Held-for-sale Level 3 1,843,778 1,965,972 There were no transfers between levels in the years ended December 31, 2018 and 2017. 3.2. Measurement of financial assets and financial liabilities at amortized cost The fair value of the financial instruments mentioned below is substantially close to the carrying amounts due to the following reasons: • Accounts receivables: short-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 expose them to several financial risks, such as: market risk (including currency fluctuation risk, interest rate risk on fair value, interest rate risk on cash flows, and price risk), credit risk, and liquidity risk. 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. The Company and its subsidiaries may use derivative financial instruments to mitigate certain exposures to these risks. The Company’s treasury officer, in accordance with the policies approved by the Board of Directors, carries out risk 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 the Oi Group companies. In the aftermath of the approval of the JRP, based on the measured new risk factors, the Company approved with the Board of Directors a new strategy to the Board of Directors to mitigate the risks arising on the foreign exchange exposure of its financial liabilities, as is ready to implement it as from this point in time. In line with the Hedging Policy pillars, the strategy is focused on the preservation of the Company’s cash flows, maintaining the liquidity, and comply with the financial covenants. 3.4.1. Market risk (a) Foreign exchange risk Financial assets The Company is not exposed to any material foreign exchange risk involving foreign currency-denominated financial assets at December 31, 2018 and 2017, except with regard to the assets held for sale, for which there was no currency hedging transactions. 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. 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 fluctuations in foreign exchange rates that could increase the balance of such liabilities. The Company’s and its subsidiaries’ borrowings and financing exposed to this risk represent approximately 53.6% (72.9% in 2017) of total liabilities from borrowings and financing. Foreign currency-denominated financial assets and financial liabilities are presented in the balance sheet as follows (includes intragroup balances): 2018 2017 Carrying Fair value Carrying Fair Financial assets Cash 70,116 70,116 82,482 82,482 Cash equivalents 154,514 154,514 1,307 1,307 Short-term investments 662 662 Financial liabilities Borrowings and financing 8,816,766 9,548,690 (*) (*) (*) In light of the filing of the judicial reorganization request on June 20, 2016, the Company’s foreign currency-denominated financial liabilities are part of the list of payables subject to renegotiation. Foreign exchange risk sensitivity analysis For purposes of this analysis, the rates used for the probable scenario were the rates prevailing at the end of December 2018 and 2017. The probable rates were then depreciated by 25% and 50% and used as benchmark for the possible and remote scenarios, respectively. Rate Rate Description 2018 Depreciation 2017 Depreciation Probable scenario US dollar 3.8748 0 % 3.3080 0 % Euro 4.4390 0 % 3.9693 0 % Possible scenario US dollar 4.8435 25 % 4.1350 25 % Euro 5.5488 25 % 4.9616 25 % Remote scenario US dollar 5.8122 50 % 4.9620 50 % Euro 6.6585 50 % 5.9540 50 % The impacts of foreign exchange exposure, in the sensitivity scenarios estimated by the Company, are shown in the table below: 2018 Description Individual risk Probable Possible Remote US dollar debt Dollar appreciation 15,216,581 19,020,726 22,824,872 US dollar cash Dollar depreciation (154,852 ) (193,566 ) (232,279 ) Euro debt Euro appreciation 2,656,697 3,320,871 3,985,045 Euro cash Euro depreciation (69,777 ) (87,221 ) (104,666 ) Present value adjustment Dollar/euro depreciation (9,046,285 ) (11,307,855 ) (13,569,427 ) Total assets/liabilities indexed to exchange fluctuation 8,602,364 10,752,955 12,903,545 Total (gain) loss 2,150,591 4,301,181 (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), the CDI, or the Benchmark Rate in the case of real-denominated debt as at December 31, 2018. After the approval of the JRP, the Company does not have borrowings and financing subject to foreign currency-denominated interest rate. As at December 31, 2018, approximately 46.1% (32.9% at December 31, 2017) of the incurred debt was subject to floating interest rates. The most material exposure of Company’s and its subsidiaries’ debt after is to CDI. Therefore, a continued increase in this interest rate would have an adverse impact on future interest payments. These assets and liabilities are presented in the balance sheet as follows: 2018 2017 Carrying amount Fair value Carrying Fair value Financial assets Cash equivalents 3,943,324 3,943,324 6,583,877 6,583,877 Short-term investments 238,962 238,962 135,624 135,624 Financial liabilities Borrowings and financing 7,633,140 7,633,140 Interest rate fluctuation risk sensitivity analysis Management believes that the most material risk related to interest rate fluctuations arises from its liabilities pegged to the TJLP and primarily the CDI. This risk is associated to an increase in those rates. It is worth mentioning that the TJLP rate remained stable at 7.0% per year from April 1, 2017 to until December 31, 2017. Beginning January 1, 2018, the TJLP was being successively reduced: 6.75% per year up to March 2018, 6.6% per year from April to June 2018, 6.56% from July to September 2018, and increased again from October to December 2018, to 6.98% per year. At the end of the quarter, however, the National Monetary Council decided to increase this rate again to 7.03% per year, effective for January-March 2019. Management estimated the fluctuation scenarios of the rates CDI and TJLP as at December 31, 2018. The rates used for the probable scenario were the rates prevailing at the end of the reporting year. For purposes of this analysis, the rates used for the probable scenario were the rates prevailing at the end of December 2018 and 2017. The probable rates were then depreciated by 25% and 50%, and used as benchmark for the possible and remote scenarios. 2018 Interest rate scenarios Probable scenario Possible scenario Remote scenario CDI TJLP CDI TJLP CDI TJLP 6.40 6.98 8.00 8.73 9.60 10.47 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 impacts of exposure to interest rates, in the sensitivity scenarios estimated by the Company, are shown in the table below: 2018 Description Individual Probable Possible Remote CDI-indexed CDI increase 4,122,410 5,373,161 6,714,517 TJLP-indexed debt TJLP increase 4,067,506 5,011,606 6,030,280 Total assets/liabilities pegged to the interest rate 8,189,916 10,384,767 12,744,797 Total (gain) loss 2,194,851 4,554,881 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 (cash 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. At December 31, 2018, approximately 94.14% of the consolidated cash investments were made with counterparties with an AAA, AA, A, and or sovereign risk rating. The Company has 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 discharge its liabilities on maturity dates and obtain cash due to market liquidity restrictions. Management uses its resources mainly to fund capital expenditures incurred on the expansion and upgrading of the network, invest in new businesses. The Company’s management monitors the continual forecasts of the liquidity requirements to ensure that the company has sufficient cash to meet its operating needs and fund capital expenditure to modernize and expand its network. In light of the confirmation of the JR Plan, the Company’s obligations related to the contractual maturities of the financial liabilities, including interest payments on borrowings, financing, and debentures were novated and the related balances were recalculated according to the JR Plan terms and conditions, in accordance with the JR Plan stages for debt restructuring purposes. |
NET OPERATING REVENUE
NET OPERATING REVENUE | 12 Months Ended |
Dec. 31, 2018 | |
Other Income and Expenses [Abstract] | |
NET OPERATING REVENUE | 4. NET OPERATING REVENUE 2018 2017 2016 Gross operating revenue (*) 30,426,548 36,338,432 45,327,110 Deductions from gross revenue (8,366,534 ) (12,548,778 ) (19,330,687 ) Taxes (6,725,356 ) (7,707,961 ) (7,760,930 ) Discounts and other deductions (*) (1,641,178 ) (4,840,817 ) (11,569,757 ) Net operating revenue 22,060,014 23,789,654 25,996,423 (*) The Company simplified the breakdown of its bills sent to its customers. The changes in billing do not impact the taxes levied on sales and/or services or the net revenue. |
OPERATING EXPENSES
OPERATING EXPENSES | 12 Months Ended |
Dec. 31, 2018 | |
Text Block [Abstract] | |
OPERATING EXPENSES | 5. OPERATING EXPENSES 2018 2017 2016 Operating expenses by nature Third-party services (5,924,556 ) (6,221,058 ) (6,399,191 ) Depreciation and amortization (5,952,905 ) (5,881,302 ) (6,310,619 ) Rentals and Insurance (4,341,969 ) (4,162,659 ) (4,329,546 ) Personnel (2,594,464 ) (2,791,331 ) (2,852,224 ) Network maintenance service (1,104,015 ) (1,251,511 ) (1,540,320 ) Interconnection (658,068 ) (778,083 ) (1,173,475 ) Provision for contingencies (89,777 ) (143,517 ) (1,056,410 ) Provision for bad debt (i) (1,070,301 ) (691,807 ) (643,287 ) Advertising and marketing (382,091 ) (413,580 ) (448,990 ) Handset and other costs (196,347 ) (223,335 ) (284,119 ) Impairment losses (ii) — (46,534 ) (225,512 ) Taxes and other expenses (134,558 ) (345,132 ) (559,162 ) Other operating income (expenses), net (iii) (132,739 ) (1,234,477 ) (226,890 ) Total operating expenses (22,581,790 ) (24,184,326 ) (26,049,745 ) Operating expenses by function Cost of sales and/or services (15,822,732 ) (15,676,216 ) (16,741,791 ) Selling expenses (4,478,352 ) (4,399,936 ) (4,383,163 ) General and administrative expenses (2,697,865 ) (3,064,252 ) (3,687,706 ) Other operating income 2,204,134 1,985,101 1,756,100 Other operating expenses (1,773,483 ) (3,028,590 ) (2,988,067 ) Equity pick up (13,492 ) (433 ) (5,118 ) Total operating expenses by function (22,581,790 ) (24,184,326 ) (26,049,745 ) (i) In 2018, the Company reassessed the assumptions for estimate adopted for the provision for bad debt. (ii) As at December 31, 2018, no impairment was recognized. As at December 31, 2017 and 2016, the Company conducted the annual impairment test and recognized a loss on goodwill related to Africa which is being reported as held for sale, in amounting R$46,534 and R$225,512, respectively. (iii) In 2017 refers to the effects of non-recurring write-off |
FINANCIAL INCOME (EXPENSES)
FINANCIAL INCOME (EXPENSES) | 12 Months Ended |
Dec. 31, 2018 | |
Other Income and Expenses [Abstract] | |
FINANCIAL INCOME (EXPENSES) | 6. FINANCIAL INCOME (EXPENSES) 2018 2017 2016 Financial income Exchange differences on translating foreign short-term investments (trading) 1,329 (135,226 ) Interest on judicial deposits and other assets 808,764 1,049,923 615,085 Income from short-term investments 142,597 112,394 Interest on related parties loans Other income 571,884 500,260 578,452 Total 1,524,574 1,550,183 1,170,705 Financial expenses and other charges a) Borrowing and financing costs (i) Inflation and exchange losses on third-party borrowings (2,645,980 ) 4,580,177 Interest on borrowings payable to third parties (1,399,687 ) (2,177,976 ) Derivatives (5,147,958 ) Subtotal: (4,045,667 ) (2,745,757 ) b) Other charges Loss on held-for-sale 292,700 (267,008 ) (1,090,295 ) Interest on other liabilities (800,413 ) (1,641,278 ) (598,301 ) Tax on transactions and bank fees (428,872 ) (512,003 ) (679,294 ) Monetary variation to provisions for contingencies 8,076 (264,511 ) (238,428 ) Interest on taxes in installments - tax financing program (28,079 ) (27,294 ) (19,869 ) Other expenses (iii) (534,386 ) (450,147 ) (174,070 ) Subtotal: (1,490,974 ) (3,162,241 ) (2,800,257 ) Total (5,536,641 ) (3,162,241 ) (5,546,014 ) Financial expenses, net (4,012,067 ) (1,612,058 ) (4,375,309 ) (i) In 2018, contractual interest and foreign currency fluctuation result from the incurrence of R$4,045 million of Borrowings and financing expenses as a result of the settlement of many of the claims in our JR Proceedings related to the debt instruments compared to no borrowings and financing expenses during the corresponding period of 2017 due to the elimination of the borrowings and financing expenses as a result of the commencement of the JR Proceedings in June 2016. (ii) In 2018, refers to the exchange gain related to the depreciation of Brazilian real against the US dollar and loss of R$489 million / US$126 million resulting from the revision of the recoverable amount of dividends receivable from Unitel and the fair value of the cash investment in Unitel. In 2017, refers to the loss of R$129 million / US$39 million (R$789 million / US$242 million in 2016) resulting from the revision of the recoverable amount of dividends receivable from Unitel and the fair value of the cash investment in Unitel and exchange losses related to the depreciation of the Kwanza against the US dollar and the Brazilian real. (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, 2018 | |
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 for the years ended December 31, 2018 and 2017 are measured at their fair values. (a) Cash and cash equivalents 2018 2017 Cash 287,491 277,500 Cash equivalents 4,097,838 6,585,184 Total 4,385,329 6,862,684 2018 2017 Repurchase agreements 2,742,731 6,225,547 Private securities Bank certificates of deposit (CDBs) 301,632 348,318 Time deposits 154,514 1,307 Other 3,888 10,012 Cash equivalents 4,097,838 6,585,184 (b) Short-term investments 2018 2017 Private securities 213,653 114,839 Government securities 25,309 21,447 Total 238,962 136,286 Current 201,975 21,447 Non-current 36,987 114,839 The Company 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. The amounts of cash equivalents and short-term investments are basically invested through exclusive investment funds, and most of the portfolio consists of Government Securities with yield pegged to the SELIC rate. The portfolio is preferably allocated to highly liquid spot market instruments for all investments. |
TRADE ACCOUNTS RECEIVABLE, NET
TRADE ACCOUNTS RECEIVABLE, NET | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
TRADE ACCOUNTS RECEIVABLE, NET | 8. TRADE ACCOUNTS RECEIVABLE, NET 2018 2017 Billed services 6,783,022 7,478,145 Unbilled services 984,062 634,241 Mobile handsets and accessories sold 619,821 597,267 Provision for bad debt (1,870,350 ) (1,342,211 ) Total 6,516,555 7,367,442 The aging list of trade receivables is as follows: 2018 2017 Current 6,250,613 6,096,205 Past-due 672,673 919,421 Past-due 131,798 144,818 Past-due 132,562 130,633 Past-due 104,628 128,175 Over 150 days past-due 1,094,631 1,290,401 Total 8,386,905 8,709,653 The movements in the allowance for doubtful accounts were as follows: Balance in 2016 (1,084,895 ) Provision for bad debt (777,106 ) Trade receivables written off as uncollectible 519,790 Balance in 2017 (1,342,211 ) Provision for bad debt (1,216,658 ) Trade receivables written off as uncollectible 688,519 Balance in 2018 (1,870,350 ) |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2018 | |
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 benefit of R$347,139 for the year ended December 31, 2018, an income tax benefit of R$350,987 for the year ended December 31, 2017, and an income tax expenses of R$2,245,113 for the year ended December 31, 2016. Income tax (expense) benefit attributable to income from continuing operations consists of: 2018 2017 2016 Income tax and social contribution Current tax (expense) 115,706 (906,080 ) (712,814 ) Deferred tax (expense) benefit 231,433 1,257,067 (1,532,299 ) Total 347,139 350,987 (2,245,113 ) The tax rate reconciliation from continuing operation consists of the following: 2018 2017 2016 Income (loss) before taxes (i) 27,046,698 (4,378,648 ) (13,434,628 ) Income tax and social contribution Income tax and social contribution at statutory rate (34%) (9,195,877 ) 1,488,740 4,567,774 Valuation allowance (ii) (4,367,062 ) (1,134,511 ) (4,048,859 ) Effect of foreign tax rate differential (23,063 ) (12,574 ) Tax effects of nondeductible expenses (iii) (652,940 ) (92,831 ) (2,892,381 ) Tax effects of tax-exempt 14,564,537 373,321 121,546 Tax incentives (basically, operating income) (iv) 3,068 14,007 21,121 Tax amnesty program (v) (274,529 ) — Other (4,587 ) (147 ) (1,740 ) Income tax and social contribution effect on profit or loss 347,139 350,987 (2,245,113 ) (i) At December 31, 2018, 2017 and 2016 income (loss) before income taxes and income tax (expense) benefit for continuing operations is as follows: 2018 Brazil Foreign operations Total Income (loss) before income taxes 37,559,050 (10,512,352 ) 27,046,698 Income tax benefit 343,082 4,057 347,139 Current tax income (expense) 164,050 (48,344 ) 115,706 Deferred tax income benefit 179,031 52,402 (*) 231,433 (*) The amount of R$ 52,402 is related to the Tax effect of the entities classified as held-for-sale. 2017 Brazil Foreign operations Total Loss before income taxes (3,115,832 ) (1,262,816 ) (4,378,648 ) Income tax benefit 311,895 39,092 350,987 Current tax (expense) (893,031 ) (13,049 ) (906,080 ) Deferred tax income benefit 1,204,926 52,141 (*) 1,257,067 (*) The amount of R$ 52,141 is related to the Tax effect of the entities classified as held-for-sale. 2016 Brazil Foreign operations Total Loss before income taxes (12,402,406 ) (1,032,222 ) (13,434,628 ) Income tax (expense) (2,054,234 ) (190,879 ) (2,245,113 ) Current tax (expense) (521,773 ) (191,041 ) (712,814 ) Deferred tax income (expense) benefit (1,532,461 ) 162 (1,532,299 ) (ii) Refers to the increase in the valuation allowance related to the deferred tax assets in 2018, 2017, and 2016. (iii) The main tax-exempt held-for-sale (iv) These tax incentives correspond mainly to a 75% reduction in the current tax due on operating income obtained as a result of telecommunication services rendered in certain northern and northeast regions of Brazil, 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. (v) Refers to a tax position taken in prior periods that were assessed by the taxing authorities. Although the Company believed in prior periods that these positions would more-likely-than-not In order to enroll, tax payers were requested to resign their litigation rights with respect to the settled debt amount and pay at least 30% of their outstanding consolidated tax debt accrued through June 30, 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. In 2017, the Company recognized in current tax the tax debts included in the Tax Compliance Program (PRT) and in the Special Tax Compliance Program (PERT). (b) Significant components of current and deferred taxes ASSETS 2018 2017 Current recoverable taxes Recoverable income tax (IRPJ) (i) 287,472 565,725 Recoverable social contribution (CSLL) (i) 91,996 135,348 IRRF/CSLL - withholding income taxes (ii) 241,778 422,437 Total current 621,246 1,123,510 LIABILITIES 2018 2017 Current taxes payable Income tax payable 21,628 416,080 Social contribution payable 5,398 151,049 Total current 27,026 567,129 2018 2017 Deferred taxes assets and liabilities Other temporary differences (iii) 5,117,917 8,854,946 Tax loss carryforwards (iv) 13,703,530 5,752,241 Total deferred taxes assets 18,821,447 14,607,187 Other intangibles (2,121,763 ) (2,428,128 ) Pension plan assets (248,538 ) (333,899 ) Other temporary differences (v) (791,792 ) (1,073,293 ) Total deferred tax liabilities (3,162,093 ) (3,835,320 ) Valuation allowance (iii) (15,636,304 ) (11,269,242 ) Total deferred taxes, net 23,050 (497,375 ) (i) Refer mainly to prepaid income tax and social contribution that will be offset against federal taxes payable in the future. (ii) Refer to withholding income tax (IRRF) credits on cash investments, derivatives, intragroup loans, government entities, and other amounts that are used as deductions from income tax payable for the years, and social contribution withheld at source on services provided to government agencies. (iii) For the year ended December 31, 2018, total valuation allowance increased from R$11,269,242 (10,134,731 in 2016) to R$15,636,304, reflecting a net change in the valuation allowance totaling R$4,367,062 recognized for the companies that, as of December 31, 2018, 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 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 tax-paying (iv) The tax loss carryfowards in Brazil and foreign subsidiaries is approximately R$29,692,453 and R$14,432,380, and corresponding to R$10,095,435 and R$3,608,095 of deferred tax assets, respectively, which do not expire, and may be carried forward indefinitely. The Company can offset their tax loss carryforwards against taxable income up to a limit of 30% per year, pursuant to the prevailing tax law. (v) Refer mainly the tax effects of foreign exchange liabilities, monetary variations of judicial deposits and tax incentives. Movements in deferred tax assets and liabilities The table below does not consider the roll forward of the deferred tax asset from held-for-sale Balance at 2017 Recognized in Other Add-backs/ Balance at 2018 Deferred tax assets arising on: Temporary differences Provision for contingencies 4,235,797 (2,961,996 ) 1,273,801 Allowance for doubtful accounts 693,315 (214,488 ) 478,827 Profit sharing 101,993 (7,489 ) 94,504 Foreign exchange differences 1,062,308 340,885 1,403,193 Other temporary differences 839,166 41,889 (703,970 ) 177,085 License 1,922,367 (231,860 ) 1,690,507 Tax loss carryforwards Tax loss carryforwards 5,752,241 7,923,539 27,750 13,703,530 Total deferred taxes assets 14,607,187 4,890,480 (676,220 ) 18,821,447 Other intangibles (2,428,128 ) 306,365 (2,121,763 ) Pension plan assets (333,899 ) (228,283 ) 312,386 (249,796 ) Other temporary differences (1,073,293 ) (422,469 ) 705,228 (790,534 ) Total deferred tax liabilities (3,835,320 ) (344,387 ) 312,386 705,228 (3,162,093 ) Valuation allowance (11,269,242 ) (4,367,062 ) (15,636,304 ) Total net deferred tax (497,375 ) 179,031 312,386 29,008 23,050 Balance at 2016 Recognized in Other Add-backs/ Balance at 2017 Deferred tax assets arising on: Temporary differences Provision for contingencies 3,827,131 408,666 4,235,797 Allowance for doubtful accounts 654,624 38,691 693,315 Profit sharing 22,304 79,689 101,993 Foreign exchange differences 1,062,308 — 1,062,308 Other temporary differences 2,037,477 (383,604 ) 1,653,873 License 1,246,117 (138,457 ) 1,107,660 Tax loss carryforwards Tax loss carryforwards 4,956,994 1,853,701 (1,058,454 ) 5,752,241 Total deferred taxes assets 13,806,955 1,858,686 — (1,058,454 ) 14,607,187 Other intangibles (2,707,265 ) 279,137 (2,428,128 ) Pension plan assets (316,060 ) (49,996 ) 32,157 (333,899 ) Other temporary differences (1,324,904 ) 251,611 (1,073,293 ) Total deferred tax liabilities (4,348,229 ) 480,752 32,157 (3,835,320 ) Valuation allowance (10,134,731 ) (1,134,511 ) — (11,269,242 ) Total net deferred tax (676,005 ) 1,204,927 32,157 (1,058,454 ) (497,375 ) (*) This year offsets relates to the tax debts included in the Tax Compliance Program (PRT) and in the Special Tax Compliance Program (PERT), as it was possible to convert some amount of tax loss carryforwards into tax credits in order to offset part of the debts paid under the rules of such Programs, in the amount of R$1,035 million and R$21 million, respectively (Note 18). R$ 208,642 refers to the utilization of tax loss carryfowards for Income Tax and R$ 849,812 refers to utilization of tax loss carryfowards for non-income |
OTHER TAXES
OTHER TAXES | 12 Months Ended |
Dec. 31, 2018 | |
Text Block [Abstract] | |
OTHER TAXES | 10. OTHER TAXES ASSETS 2018 2017 Recoverable State VAT (ICMS) (i) 1,240,353 1,411,538 Taxes on revenue (PIS and COFINS) 215,860 244,853 Other 63,015 52,754 Total 1,519,228 1,709,145 Current 803,252 1,081,587 Non-current 715,976 627,558 LIABILITIES 2018 2017 State VAT (ICMS) (i) 556,693 610,847 ICMS Agreement No. 69/1998 34,113 22,595 Taxes on revenue (PIS and COFINS) (ii) 235,319 184,472 FUST/FUNTTEL/broadcasting fees (iii) 655,022 963,259 Other (iv) 181,437 530,153 Total 1,662,584 2,311,326 Current 1,033,868 1,443,662 Non-current 628,716 867,664 (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. (ii) Refers, basically, to the Social Integration Program Tax on Revenue (PIS) and Social Security Funding Tax on Revenue (COFINS) on revenue, financial income, and other income. The Company and its subsidiaries have filed legal proceedings to claim the right to deduct ICMS from the PIS and COFINS tax bases and the recovery of past unduly paid amounts, within the relevant statute of limitations. In March 2019, the 1 st nd non-levy The third lawsuit is still ongoing in the 2 nd The total adjusted amount of these credits at December 31, 2018, considering the three lawsuits, is approximately R$3.05 billion. The taw lawsuits on which a final decision was issued total approximately R$2.05 billion. In order to initiate the utilization of the tax credits recognized by the courts by offsetting them against federal taxes due, the Company is conducting a thorough analysis aimed at quantifying these tax credits and taking the actions necessary to secure their confirmation by the Federal Revenue Service. (iii) The Company and its subsidiaries Telemar and Oi Móvel filed lawsuits to discuss the correct calculation of the contribution to the FUST and in the course of the lawsuits made escrow deposits to suspend its collection. These discussions are also being judged by higher courts and a possible transformation of the deposited amounts into definitive payments should not occur within two (2) years (iv) Consisting primarily of monetary variation to suspended taxes and withholding tax on intragroup loans and interest on capital. |
JUDICIAL DEPOSITS
JUDICIAL DEPOSITS | 12 Months Ended |
Dec. 31, 2018 | |
Banking and Thrift [Abstract] | |
JUDICIAL DEPOSITS | 11. JUDICIAL DEPOSITS In some situations, the Company makes as ordered by courts or even at its own discretion 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 counselors, as probable, possible, or remote. As set forth by relevant legislation, judicial deposits are adjusted for inflation. 2018 2017 Civil 5,849,978 6,948,344 Tax 2,337,508 2,660,132 Labor 1,197,144 1,637,668 Subtotal 9,384,630 11,246,144 Provision for losses (i) (649,910 ) (1,933,034 ) Total 8,734,720 9,313,110 Current 1,715,934 1,023,348 Non-current 7,018,786 8,289,762 (i) This amount represents the estimated loss of balances of judicial deposits that are in the process of reconciliation with the obtained statements. |
INVESTMENTS
INVESTMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Schedule of Investments [Abstract] | |
INVESTMENTS | 12. INVESTMENTS 2018 2017 Joint venture 31,488 42,346 Investments in associates 44,124 42,115 Tax incentives, net of allowances for losses 31,876 31,579 Other investments 10,352 20,470 Total 117,840 136,510 Summary of the movements in investment balances Balance at 2016 135,652 Share of profits of subsidiaries (433 ) Associates’ share of other comprehensive income 1,949 Other (658 ) Balance at 2017 136,510 Share of profits of subsidiaries (13,492 ) Associates’ share of other comprehensive income (2,270 ) Other (2,908 ) Balance at 2018 117,840 |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | 13. PROPERTY, PLANT AND EQUIPMENT Works in Automatic Transmission Infrastructure Buildings Other assets Total Cost of PP&E (gross amount) Balance at 2016 2,413,770 19,974,446 56,720,433 27,568,591 4,311,533 5,866,031 116,854,804 Additions 4,661,570 2,060 375,050 268,931 17,906 55,614 5,381,131 Write-offs (93,922 ) (2,235 ) (19,656 ) (666,885 ) (821 ) (31,193 ) (814,712 ) Transfers (3,547,305 ) 33,016 1,875,594 1,170,165 141,666 326,864 — Balance at 2017 3,434,113 20,007,287 58,951,421 28,340,802 4,470,284 6,217,316 121,421,223 Additions 5,117,872 487 372,138 388,988 10,721 39,471 5,929,677 Write-offs (47,465 ) (1,827 ) (53,374 ) (601,842 ) (4,660 ) (3,567 ) (712,735 ) Transfers (5,152,907 ) 68,518 2,672,783 2,214,139 (15,168 ) 212,635 — Balance at 2018 3,351,613 20,074,465 61,942,968 30,342,087 4,461,177 6,465,855 126,638,165 Accumulated depreciation Balance at 2016 (18,267,700 ) (43,324,619 ) (21,665,423 ) (2,547,638 ) (4,969,592 ) (90,774,972 ) Depreciation expenses (338,003 ) (2,175,732 ) (1,158,457 ) (96,940 ) (396,589 ) (4,165,721 ) Write-offs 1,158 18,610 558,879 817 23,458 602,922 Transfers — (473 ) (625 ) (84,895 ) 85,995 2 Balance at 2017 (18,604,545 ) (45,482,214 ) (22,265,626 ) (2,728,656 ) (5,256,728 ) (94,337,769 ) Depreciation expenses (299,925 ) (2,271,906 ) (1,253,099 ) (95,679 ) (408,379 ) (4,328,988 ) Write-offs 1,834 48,582 443,347 1,542 2,085 497,390 Transfers (36 ) (151 ) (353 ) 33,568 (33,028 ) — Balance at 2018 (18,902,672 ) (47,705,689 ) (23,075,731 ) (2,789,225 ) (5,696,050 ) (98,169,367 ) Property, plant and equipment, net Balance at 2016 2,413,770 1,706,746 13,395,814 5,903,168 1,763,895 896,439 26,079,832 Balance at 2017 3,434,113 1,402,742 13,469,207 6,075,176 1,741,628 960,588 27,083,454 Balance at 2018 3,351,613 1,171,793 14,237,279 7,266,356 1,671,952 769,805 28,468,798 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 handed over to ANATEL upon the termination of the concession agreements that are not renewed. As at December 31, 2018, the residual balance of the Company’s returnable assets is R$8,218,006 and consists of assets and installations in progress, switching and transmission equipment, payphones, outside network equipment, power equipment, and systems and operation support equipment. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | 14. INTANGIBLE ASSETS Intangibles in Data processing Regulatory Other Total Cost of intangibles (gross amount) Balance at 2016 112,842 8,301,630 19,076,941 1,971,826 29,463,239 Additions 332,500 4,356 74,972 411,828 Transfers (428,295 ) 438,138 (9,843 ) Other (1,111 ) (382 ) (1,493 ) Balance at 2017 17,047 8,743,013 19,076,941 2,036,573 29,873,574 Additions 263,305 4,524 — 73,471 341,300 Transfers (253,143 ) 234,157 — 18,986 — Other (14 ) — — — (14 ) Balance at 2018 27,195 8,981,694 19,076,941 2,129,030 30,214,860 Accumulated amortization Balance at 2016 (7,148,833 ) (10,071,364 ) (1,731,983 ) (18,952,180 ) Amortization expenses (524,414 ) (1,025,438 ) (116,756 ) (1,666,608 ) Transfers 53 53 Balance at 2017 (7,673,194 ) (11,096,802 ) (1,848,739 ) (20,618,735 ) Amortization expenses (443,268 ) (1,001,234 ) (126,181 ) (1,570,683 ) Transfers — — — — Balance at 2018 (8,116,462 ) (12,098,036 ) (1,974,920 ) (22,189,418 ) Intangible assets, net Balance at 2016 112,842 1,152,797 9,005,577 239,843 10,511,059 Balance at 2017 17,047 1,069,819 7,980,139 187,834 9,254,839 Balance at 2018 27,195 865,232 6,978,905 154,110 8,025,442 Annual amortization rate (average) 20 % 10 % 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, 2018 | |
Payables and Accruals [Abstract] | |
TRADE PAYABLES | 15. TRADE PAYABLES 2018 2017 Infrastructure, network and plant maintenance materials 2,861,712 2,658,436 Services 3,397,413 3,964,912 Rental of polls and rights-of-way 191,723 399,996 ANATEL AGU 7,147,137 Other 647,856 293,478 Adjustment to present value (5,426,971 ) Liabilities subject to compromise (2,145,852 ) Total 8,818,870 5,170,970 Current 5,225,862 5,170,970 Non-current 3,593,008 Trade payables subject to the Judicial Reorganization (i) 3,794,610 246,472 Trade payables not subject to the Judicial Reorganization 5,024,260 4,924,498 Total 8,818,870 5,170,970 Certain amounts initially recorded as liabilities subject to compromise (Note 29) were adjusted and reclassified to reflect the new legal terms and conditions established by the JRP Court. |
BORROWINGS AND FINANCING
BORROWINGS AND FINANCING | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
BORROWINGS AND FINANCING | 16. BORROWINGS AND FINANCING As a result of the JRP confirmation, the borrowings and financing contracted by the Oi Group companies were novated and the related balances were recalculated according to the JRP terms and conditions, in accordance with the measures necessary for its implementation and booked as current and non-current The Company and the other Oi Group completed the financial debt restructuring with the implementation of the applicable terms and conditions provided for in the JRP. Balances of borrowings and financing as at December 31, 2018 are as follow: 2018 Contractual maturity Principal Interest Senior notes 7,068,263 Local currency Foreign currency 7,068,263 Jul 2025 Semiannual Non-qualified 326,376 Aug 2024 to Semiannual Collateralized claims 3,616,074 BNDES 3,616,074 Mar 2024 to Monthly Restructuring I 14,993,376 Local currency 8,640,054 Debentures (I) 6,788,519 Aug 2023 to Semiannual Other 1,851,535 Aug 2023 to Semiannual Foreign currency 6,353,322 Local currency Financial Institution 54,251 Jan 2019 to Monthly Overall Offer 4,332,352 Local currency 207,035 Feb 2038 to Single Foreign currency 4,125,317 Feb 2038 to Loan and debentures from subsidiaries (Note 27) Subtotal 30,390,692 Incurred debt issuance cost (12,126 ) Present value adjustment (*) (13,928,660 ) Total 16,449,906 Current 672,894 Non-current 15,777,012 (*) The financial liabilities have been adjusted to present value according to the criteria of ASC 852 as of the time at which it has reclassified each of the financial liabilities that were legally affected by the JRP from liabilities subject to compromise to borrowings and financings or trade payables. It was calculated taking into consideration the contractual flows provided for in the JRP, discounted using rates that range from 12.6% per year to 16.4% per year, depending on the maturities and currency of each instrument, the resulting discount will be amortized to financial expense over the term of the debt. Debt breakdown per currency 2018 Euro 198,931 US dollar 8,617,835 Brazilian reais 7,633,140 Total 16,449,906 Debt breakdown per index Index/rate 2018 Fixed rate 1.75% p.a. – 10.00% p.a. 8,562,117 CDI 0.75% p.a. – 1.83% p.a. 3,949,639 TJLP 2.95% p.a. + TJLP 3,614,820 TR 0% 14,430 Other 0% 308,900 Total 16,449,906 Maturity schedule of the long-term debt allocation schedule 2018 Long-term debt 2020 10,958 2021 3,953 2022 970 2023 295,155 2024 and following years 29,405,472 Total 29,716,508 Guarantees BNDES financing facilities are originally collateralized by receivables of the Company and its subsidiaries Telemar and Oi Móvel. The Company provides guarantees to its subsidiaries Telemar and Oi Móvel for such financing facilities, totaling R$2,712 million. Covenants Pursuant to a Clause 17 of Appendix 4.2.4 to the Plan, the Company and its subsidiaries are subject to certain covenants existing in some loan and financing agreements, based on certain financial ratios, including Gross debt-to-EBITDA. |
LICENSES AND CONCESSIONS PAYABL
LICENSES AND CONCESSIONS PAYABLE | 12 Months Ended |
Dec. 31, 2018 | |
Contractors [Abstract] | |
LICENSES AND CONCESSIONS PAYABLE | 17. LICENSES AND CONCESSIONS PAYABLE 2018 2017 Personal Mobile Services - SMP 1,025 4,649 STFC concessions 84,594 16,261 Total 85,619 20,910 Current 85,619 20,306 Non-current 604 Correspond 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. |
TAX FINANCING PROGRAM
TAX FINANCING PROGRAM | 12 Months Ended |
Dec. 31, 2018 | |
Text Block [Abstract] | |
TAX FINANCING PROGRAM | 18. TAX FINANCING PROGRAM The outstanding balance of the Tax Debt Refinancing Program is broken down as follows: 2018 2017 Law 11941/09 and Law 12865/2013 tax financing program 496,240 638,409 REFIS II - PAES 4,336 PRT (MP 766/2017) (i) 54,528 233,051 PERT (Law 13496/2017) (ii) 2,438 12,981 Total 553,206 888,777 Current 142,036 278,277 Non-current 411,170 610,500 The amounts of the tax refinancing program created under Law 11941/2009, Provisional Act (MP) 766/2017, and Law 13469/2017, divided into principal, fine and interest, which include the debt declared at the time the deadline to join the program (Law 11941/2009 installment plan) was reopened as provided for by Law 12865/2013 and Law 12996/2014, are broken down as follows: 2018 2017 Principal Fines Interest Total Total Tax on revenue (COFINS) 42,921 156,674 199,595 299,533 Income tax 5,873 39,094 44,967 68,285 Tax on revenue (PIS) 44,043 35,842 79,885 89,954 Social security (INSS – SAT) 1,018 1,342 2,414 4,774 8,450 Social contribution 754 323 11,426 12,503 17,339 Tax on banking transactions (CPMF) 19,014 2,142 28,976 50,132 49,268 PRT – Other Debts - RFB 26,685 2,374 25,469 54,528 227,261 PRT – Social Security - INSS 5,790 PERT – Other Debts - RFB 1,146 1,292 2,438 12,981 Other 29,150 4,433 70,801 104,384 109,916 Total 170,604 10,614 371,988 553,206 888,777 The payment schedule is as follows: 2019 142,036 2020 85,070 2021 85,070 2022 85,070 2023 85,070 2024 e 2025 70,890 Total 553,206 The tax debts, as is the case of the debts included in tax refinancing programs, are not subject to the terms of the judicial reorganization terms. (i) Tax Compliance Program (PRT) The Company elected to include and settle under said tax refinancing program, created by the Federal Government, under Provisional Act 766/2017 (PRT), the administrative proceedings with a probable likelihood of an unfavorable outcome and those where, while attributed a possible likelihood of an unfavorable outcome, the cost effectiveness of including them provided to be highly advantageous in light of the benefits offered by the program. The Company elected the payment method that allows settling 76% of the consolidated debt utilizing tax credits arising on tax loss carryforwards amounting to R$1,035 million, and paid the remaining 24% in 24 monthly installments totaling R$327 million plus SELIC interest charged as from the adherence month. All the procedures necessary for the Company joining the PRT were completed within the statutory deadline, while MP 766/2017 was still in effect. Subsequently, on June 1, 2017 the effective period of said Provisional Act ended because it was not passed into law within the relevant constitutional deadline. However, as established by the Federal Constitution, the legal relationships established and arising from actions taken while a provisional act not passed into law was effective, as in the case of the Company’s joining the PRT, continue to be governed by the former provisional act, except where the National Congress provides for otherwise, by means of a legislative decree. Note that the PRT, governed by MP 766/2017, is not equivalent to the tax installment plan established by MP 783/2017 (PERT), of May 31, 2017, because of differences in payment terms and conditions, plan scope, and access requirements. (ii) Special Tax Compliance Program (PERT) The Company elected to include in and settle through PERT only tax debts that in aggregate do not exceed the fifteen million Brazilian reais (R$15,000,000.00) ceiling set by Article 3 of Law 13496/2017. The tax debts included in said program were those being disputed at the administrative level in proceedings classified with a low likelihood of the Company winning and which, in the event of an unfavorable outcome, would result in a lawsuit—and entail all the associated costs—, the reason why the cost effectiveness of joining the program was quite positive, because of the benefits offered by PERT (especially the payment of just 5% of the debt in cash). |
PROVISION FOR CONTINGENCIES
PROVISION FOR CONTINGENCIES | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
PROVISION FOR CONTINGENCIES | 19. PROVISION FOR CONTINGENCIES 2018 2017 Labor 1,457,181 697,190 Tax 650,083 660,304 Civil (i) 2,931,456 10,941 Total provisions 5,038,720 1,368,435 Current 680,542 Non-current 4,358,178 1,368,435 (i) Includes R$157,809 related to the agreement entered into with Pharol, as described in Note 30. In compliance with the relevant Law, the provisions are adjusted for inflation on a monthly basis. The following summarizes the activity of the contingency provision: Labor Tax Civil Total Balance in 12/31/2016 543,026 576,133 9,915 1,129,074 Monetary variation (i) 162,695 99,902 1,914 264,511 Additions/(reversals) (i) 92,803 49,616 1,098 143,517 Write-offs for payment/terminations (ii) (101,334 ) (65,347 ) (1,986 ) (168,667 ) Balance in 12/31/2017 697,190 660,304 10,941 1,368,435 Monetary variation (i) 22,244 77,697 19,072 119,013 Additions/(reversals) (i) (57,200 ) (49,659 ) 133,465 26,606 Write-offs for payment/terminations (ii) (241,225 ) (38,259 ) (378,339 ) (657,823 ) Reclassification from liabilities subjected to compromise 1,036,172 3,146,317 4,182,489 Balance in 12/31/2018 1,457,181 650,083 2,931,456 5,038,720 (i) The Company has been continually monitoring its proceedings, as well as the reprocessing of the provision estimation model taking into account the new profile and history of discontinuation of lawsuits in the context of the approval and Ratification of the JRP. Accordingly, the Company reversed the provision for contingencies and the related monetary variation. (ii) This line item, basically, includes the amounts related to proceedings terminated and included in the list of the Company’s judicial reorganization creditors, which were transferred to the line item trade payables and will be paid according to the terms of the JRP. Labor The Company is a party to a large number of labor lawsuits and calculates the related provision based on a statistical methodology that takes into consideration, but not limited to, the total number of existing lawsuits, the claims make in each lawsuit, the amount claimed in each lawsuit, the history of payments made, and the technical opinion of the legal counsel. (i) Overtime - refers to the claim for payment of salary and premiums by 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 The provisions for tax lawsuits are calculated individually taking into consideration Management and the legal counsel’s risk assessment. These contingencies are not included in the Judicial Reorganization Plan. (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) 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) ANATEL – On June 30, 2016 the Company was a party to noncompliance administrative proceedings and lawsuits filed by ANATEL and the Federal Attorney General’s Office (AGU) totaling an estimate R$14.5 billion, which were included in the JRP as electable for payment as provided for in this Plan (see Note 1). On this date, R$8.4 billion in liquid proceedings and R$6.1 billion in illiquid proceedings. With regard to the proceedings included in the JRP and taking into consideration the decision that granted the judicial reorganization on February 5, 2018, the Company revised the criteria used to calculate the provision for these regulatory contingencies to start considering the estimate of discounted future cash flows associated to each one of the payment methods provided for in the JRP for this type of claims. As at December 31, 2018, this provision totals R$580 million. For the contingencies not subject to the judicial reorganization, the Company takes into consideration the opinions of outside attorneys when evaluating the outcome of the contingencies. The Company disagrees and is challenging some of the alleged noncompliance events, and is also challenging the unfairness and unreasonableness of the amount of imposed fines in light of the pinpointed noncompliance event and has kept in balance sheet the amount it deems a probable loss. The JRP prescribes in a specific clause how regulatory agencies’ claims should be addressed. It should be noted that said Plan was approved by a vast majority of creditors at the General Creditors’ Meeting and ratified by the by the 7 th No. 001068-32.2018.8.19.0000 th th (non-current) (ii) Corporate – Financial Participation Agreements: these agreements were governed by Administrative Rules 415/1972, 1181/1974, 1361/1976, 881/1990, 86/1991, and 1028/1996. When they entered into a financial participation agreement to acquired a telephone line, subscribers became holders of 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 merged by the Company, and other local carriers members of the Telebrás system, 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 for contingencies 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, (iii) the average amount of historical losses, broken down by matter in dispute, and (iv) the impacts of the payment of these contingencies in the context of the Judicial Reorganization Plan ratified on January 8, 2018. 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 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 CRT’s monthly trial balance on the date it was paid-in, Based on current information, management believes that its estimate would not be materially impacted as at December 31, 2018. There may be, however, significant changes in the items above, mainly regarding the market price of Company shares. (iii) Small claims courts - claims filed by customers for whom the individual indemnification compensation amounts do not exceed the equivalent of forty (40) minimum wages; and The Company is a party to a large number of lawsuits filed in small claims courts and calculates the related provision based on a statistical methodology that takes into consideration, but not limited to, the total number of existing lawsuits, the claims make in each lawsuit, the amount claimed in each lawsuit, the history of payments made, and the technical opinion of the legal counsel and the impacts of the Judicial Reorganization Plan. (iv) Other claims - refer to several of ongoing lawsuits discussing 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. The provisions for these contingencies are calculated individually taking into consideration Management and the legal counsel’s risk assessment. Breakdown of unrecorded contingent liabilities The table below shows a summary of the carrying amounts of the main legal matters with possible risk of loss and the amounts on December 31, 2018 and 2017. 2018 2017 Labor 770,982 53,328 Tax 27,586,094 26,175,239 Civil 1,723,110 191,819 Total 30,080,186 26,420,386 Contingent liabilities The Company is also party 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. Tax The main ongoing lawsuits have the following matters: (i) ICMS - it refers to discussions concerning the levy of this tax on certain activities and/or the provision of certain services, such as, for example, the levy of ICMS on noncore activities, supplemental services, services provided to tax-exempt (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$3,505,366 (2017 - R$3,387,630); (iii) INSS – tax assessments to add amounts to the contribution salary allegedly due by the Company, amounting approximately to R$695,249 (R$573,619 in 2017); 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$10,862,077 (R$10,483,828 in 2017). Civil The main ongoing lawsuits do not have any court decision that has been issued, and are mainly related, but not limited to, challenging of network expansion plans, compensation for pain and suffering and material damages, collection lawsuits, and bidding processes. Fenapas civil actions filed with the 5 th spin-off spin-off. 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 adjusted amount of contracted bonds and guarantee insurances, effective at December 31, 2018 corresponds to R$13,750,739 (R$14,847,243 in 2017). The commission charges on these contracts are based on market rates. |
OTHER PAYABLES
OTHER PAYABLES | 12 Months Ended |
Dec. 31, 2018 | |
Other Liabilities Disclosure [Abstract] | |
OTHER PAYABLES | 20. OTHER PAYABLES 2018 2017 Provisions for indemnities payable 676,984 607,559 Third party consignment 56,302 35,293 Provision for asset decommissioning 17,410 16,716 Other 510,865 392,832 Total 1,261,561 1,052,400 Current 629,939 469,214 Non-current 631,622 583,186 |
UNEARNED REVENUES
UNEARNED REVENUES | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
UNEARNED REVENUES | 21. UNEARNED REVENUES Refers to the 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 service installation fees that are recognized in revenue when the customers use the services. 2018 2017 Unearned revenues of the infrastructure assets 1,596,238 1,661,236 Unearned revenues of service installation fees 159,345 — Other 160,987 111,592 Total 1,916,570 1,772,828 Current 229,497 139,012 Non-current 1,687,073 1,633,816 |
SHAREHOLDERS' EQUITY (DEFICIT)
SHAREHOLDERS' EQUITY (DEFICIT) | 12 Months Ended |
Dec. 31, 2018 | |
Federal Home Loan Banks [Abstract] | |
SHAREHOLDERS' EQUITY (DEFICIT) | 22. SHAREHOLDERS’ EQUITY (DEFICIT) (a) Share capital The Capital Increase – Capitalization of Credits amounting to R$10,600,097 with the issue of 1,514,299,603 new book-entry, registered common shares without par value was ratified by the Board of Directors on July 20, 2018. The fair value of the shares issued was R$11,613,980. On October 28, 2018, the Company commenced the issuance and delivery of warrants and ADWs exercised by their holders and issued 115,913,355 common shares. The process was concluded on January 4, 2019. The Warrants that were not exercised on or prior to January 2, 2019 have been cancelled. Subscribed and paid-in Number of shares (in thousands) 2018 2017 Total capital in shares Common shares 2,298,247 668,034 Preferred shares 157,727 157,727 Total 2,455,974 825,761 Treasury shares Common shares 32,030 148,282 Preferred shares 1,812 1,812 Total 33,842 150,094 Outstanding shares Common shares 2,266,217 519,752 Preferred shares 155,915 155,915 Total outstanding shares 2,422,132 675,667 Common and preferred shareholders have different rights in relation to dividends, voting rights and in case of liquidation, as determined by the Company’s by-laws. Basic and diluted earnings (losses) per share Basic Basic earnings per share are calculated by dividing the profit attributable to the Company’s controlling shareholders, available to holders of common and preferred shares, by the weighted average number of common and preferred shares outstanding during the period. Diluted Diluted earnings per share are calculated by adjusting the weighted average number of outstanding common and preferred shares to presume the conversion of all diluted potential shares. The Company currently has no potential dilutive shares. 2018 2017 2016 Net income (loss) attributable to owners of the Company 27,369,422 (3,736,518 ) (15,502,132 ) Net income (loss) allocated to common shares – basic and diluted 24,525,692 (2,874,290 ) (11,924,904 ) Net income (loss) allocated to preferred shares – basic and diluted 2,843,730 (862,228 ) (3,577,228 ) Weighted average number of outstanding shares (in thousands of shares) Common shares – basic and diluted 1,344,686 519,752 519,752 Preferred shares – basic and diluted 155,915 155,915 155,915 Net income (loss) per share (in Reais): Common shares – basic and diluted 18.24 (5.53 ) (22.94 ) Preferred shares – basic and diluted 18.24 (5.53 ) (22.94 ) On January 16, 2019, the Company issued 1,530,457,356 common shares to holders of subscription rights. On January 21, 2019, the Company issued 91,080,933 common shares to holders of subscription rights that had requested subscriptions for excess common shares. On January 25, 2019, 1,604,268,162 New Common Shares were subscribed and paid in. This concluded the Capital Increase process, through the subscription and payment of all 3,225,806,451 New Common Shares issued as part of the Capital Increase – New Funds, representing a contribution of new funds for the Company totaling R$4,000,000,000.00. This transaction will have an impact on the earnings per share for the next fiscal year, as the current shareholders will be diluted. (a) 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 to net assets recorded that are related to the merger of TmarPart. Restructured Senior Notes convertible into equity instruments In light of the new terms, the senior notes were settled by issuing the following: We highlight below the main features of the securities that qualify as debt instrument (Note 1): • Common shares issued by Oi and currently held by PTIF; • New I Common Shares that will be due as a result of the capital increase, through the capitalization of the claims, New I Common Shares; • Subscription Warrants. For measurement purposes of the amount recognized for each of the transactions qualifiable as an equity instrument, referred to above, the Company hired an independent specialized consulting firm to estimate the fair value of the stock, using discounted cash flow valuation methodology (fair value hierarchy, Level 3), considering the following main assumptions: (i) variable discount rate: in reais (BRL) in nominal terms, according to the CAPM methodology, variable due to year-on-year Fair Value of Restructured Senior Notes New I Common Shares 10,070,116 Delivery of treasury shares 773,072 Subscription Warrants 770,792 11,613,980 In July 2018, the related new shares and treasury shares were delivered to the holders of Qualified Senior Notes, as provided for in the JRP. (b) Treasury shares Delivery of treasury shares On July 27, 2018, the Company delivered 116,251,405 common shares, previously held by PTIF, to the Qualified Bondholders, as part of the restructuring of the qualified bonds (Note 1). The carrying amount of the derecognized treasury shares R$2,727,842, recognized as a contra entry to the capital reserve. (c) Other comprehensive income The Company recognizes in this line item other comprehensive income, which includes 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. |
PROVISION FOR PENSION PLAN
PROVISION FOR PENSION PLAN | 12 Months Ended |
Dec. 31, 2018 | |
Postemployment Benefits [Abstract] | |
PROVISION FOR PENSION PLAN | 23. PROVISION FOR PENSION PLAN (a) Pension funds The Company and its subsidiaries sponsor retirement benefit plans for their employees, if they elect to be part of such plan. The table below shows the existing pension plans at December 31, 2018. Benefit plans Sponsors Manager TCSPREV Oi, Oi Móvel and BrT Multimídia FATL BrTPREV (*) Oi, Oi Móvel and BrT Multimídia FATL TelemarPrev Oi, TMAR and Oi Móvel FATL PBS-Telemar Telemar FATL PBS-TNCP Oi Móvel FATL CELPREV Oi Móvel FATL PAMEC Oi Oi PBS-A Telemar and Oi Sistel PAMA Oi and Telemar Sistel (*) Plan merged with into TCSPREV on November 30, 2018. 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. For the year ended December 31, 2018, the actuarial valuations were performed by PREVUE Consultoria. The Bylaws provide for the approval of the supplementary 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 Underfunded status 2018 2017 Financial obligations - BrTPREV plan (i) 574,725 BrTPREV plan 629,120 PAMEC plan 4,397 3,300 Total unfunded status 579,122 632,420 Reclassification to liabilities subject to compromise (Note 29). (560,046 ) Total non-current 579,122 72,374 (i) Represented by the financial obligations agreement, 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 commitment under the terms of the JRP. Overfunded status 2018 2017 TCSPREV plan 364,552 1,329,931 TelemarPrev plan 343,286 317,500 PBS – Telemar plan 50,869 53,041 Total 758,707 1,700,472 Current 4,880 1,080 Non-current 753,827 1,699,392 Characteristics of the sponsored pension plans 1) FATL FATL, close-end, Plans (i) TCSPREV and BRTPREV (Plan merged with into TCSPREV on November 30, 2018) Variable contribution pension Benefit Plan, closed to new entrants, enrolled with the CNPB under No. 2000.0028-38. On November 30, 2018, date of the actual merger, TCSPREV Benefits Plan merged the BrTPREV Benefits Plan (CNPB No. 2002,0017-74) With the recognition and registration of the merger, the Participants and Beneficiaries linked to BrTPREV automatically became Participants and Beneficiaries TCSPREV, in accordance with the categories of Beneficiaries existing on the day prior to the merger date. The monthly, mandatory Basic Contribution of the Active Participants of the TCSPREV and BrTPREV (merged plan) groups corresponds to the outcome obtained by applying a percentage that may range from 3% to 8% on the Contribution Salary (PS), pursuant to the age and option of each Participant. The Plan’s Charter provides for contribution parity by the Participants and the Sponsors. The monthly Contribution of the Fundador/Alternativo Plan Participants, previously merged with and into BrTPREV, corresponds to the sum of: (i) 3% charged on the Contribution Salary; (ii) 2% charged on the Contribution Salary that exceeds half of the highest Official Pension Scheme Contribution Salary, and (iii) 6.3% charged on the Contribution Salary that that exceeds the highest Official Pension Scheme Contribution Salary. The Plan’s Charter provides for contribution parity by the Participants and the Sponsors. In accordance with regulatory criteria, the Sponsors’ contributions, related to TCSPREV and BrTPREV Participants are automatically cancelled on the month subsequent to the month when the same Participant reaches the age of 60 years old, 10 years of Credited Services, and 10 years of Plan membership. For participants who migrated from the PBS-TCS PBS-TCS The TCSPREV and BrTPREV 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 is optional and both its amount and frequency are freely chosen by the Participant, as defined by the TCSPREV or BrTPREV Plan, provided it is not lower than one (1) UPTCS (TCSPREV Pension Unit) or one (1) UPBrT (BrT’s Pension Unit), respectively. The Sponsor does not make any counterpart contribution to the Participant’s Voluntary or Sporadic contribution. The plan is funded under the capital formation approach. (ii) PBS-Telemar Defined contribution pension Benefit Plan, closed to new entrants, enrolled with the CNPB under No. 2000.0015-56. The contributions from Active Participants of the PBS-Telemar (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 capital formation approach. (iv) PBS-TNC Defined contribution pension Benefit Plan, closed to new entrants, enrolled with the CNPB under No. 2000.0013-19. The contributions from Active Participants of the PBS-TNC The contribution of the Current Beneficiaries (only those who receive a retirement allowance) is equivalent to a percentage to be set on an annual basis in the Costing Plan, applied on the overall benefit, limited to the amount of the allowance. The plan is funded under the capital formation approach. (v) CELPREV Defined Contribution Pension Benefit Plan, enrolled with the CNPB under No. 2004.0009-29. On January 12, 2018, pursuant to Administrative Rule 22, published on the Federal Official Gazette of January 16, 2018, PREVIC approved the new text of the Plan’s Charter, which closes the number of CELPREV participants and prevents new entrants. The Participant’s Basic Regular Contribution corresponds to the product obtained by applying a percentage, 0%, 0.5%, 1%, 1.5% or 2%, depending on each participant’s option, to his or her Contribution Salary (SP). The Sponsors contribute with an amount equivalent to such contribution, less the monthly, mandatory contribution of each Sponsor required to fund risk costs (Sick Pay Benefit). The Additional Regular Contribution corresponds The Participant’s Basic Regular Contribution corresponds to the product obtained by applying a percentage ranging from 0% to 6%, in multiples of 0.5%, as elected by each participant, on the Contribution Salary exceeding 10 Plan Benchmark Units (URPs). The Sponsors contribute with an equivalent amount. The Participant’s Voluntary Contribution corresponds to a whole number percentage, freely elected by each participant, applied on the Contribution Salary. The Sponsor does not make any counterpart contribution to this contribution. The Sponsor’s Nonrecurring Contribution is voluntarily and corresponds to applying a percentage ranging from 50% to 150% of the aggregate Basic Regular and Additional Regular Contributions of the Sponsor, pursuant to consistent, non-discriminatory The Sponsor’s Special Contribution is specific for new Plan members who have joined the plan within 90 days starting March 18, 2004. The Sponsor’s monthly, mandatory Risk Contribution, required to fund the Sick Pay Benefit, corresponds to percentage of Non-migrating The plan is funded under the capital formation approach. 2) SISTEL SISTEL is a nonprofit, private welfare and pension entity, established in November 1977, which is engaged in creating and operating 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 PBS-A PBS-A (ii) 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 In October 2015, in compliance with a court order, Sistel transferred the surpluses of the PBS-A As of December 31, 2018, the PAMA plan had a surplus of R$21,542. No significant contribution in 2018, 2017 and 2016. 3) PAMEC-BrT Healthcare plan intended to provide medical care to the retirees and survivor pensioners linked to the TCSPREV Benefit Plan. This Benefit Plan is managed by FATL. The contributions for PAMEC-BrT Funded Status Changes in the actuarial obligations, fair value of assets and amounts recognized in the balance sheet 2018 2017 TCSPREV BrTPREV TelemarPrev PBS-Telemar PAMEC TCSPREV BrTPREV TelemarPrev PBS-Telemar PAMEC Projected benefit obligation at the beginning of the year 625,266 2,524,729 3,825,053 307,659 3,300 572,477 2,306,858 3,491,343 286,159 3,276 Service cost 196 74 1,870 41 — 457 102 1,545 33 — Interest cost 78,223 218,104 362,886 29,113 317 64,927 260,650 397,842 32,488 378 Benefits paid (61,605 ) (177,215 ) (272,271 ) (23,441 ) (688 ) (54,979 ) (205,879 ) (263,493 ) (23,158 ) (122 ) Participan’s contributions 2 12 — 34 — — — — 41 — Changes in actuarial assumptions (12,212 ) 60,942 247,746 14,723 1,468 42,384 162,980 197,816 12,096 (232 ) Merger plans 2,626,646 (2,626,646 ) Projected benefit obligation at the end of the year 3,256,516 — 4,165,284 328,129 4,397 625,266 2,524,711 3,825,053 307,659 3,300 2018 2017 TCSPREV BrTPREV TelemarPrev PBS-Telemar PAMEC TCSPREV BrTPREV TelemarPrev PBS-Telemar PAMEC Fair value of plan assets at the beginning of the year 1,953,967 1,895,608 4,142,553 360,700 — 1,845,367 1,806,042 3,853,595 314,203 Actual return on plan assets (187,708 ) 197,994 638,288 41,639 — 163,580 295,413 552,451 69,540 Company’s contributions 2 11 — 66 688 — 15 73 122 Participan’s contributions 2 12 — 34 — — — 41 Benefits paid (61,605 ) (177,215 ) (272,271 ) (23,441 ) (688 ) (54,979 ) (205,879 ) (263,493 ) (23,158 ) (122 ) Merger plans 1,916,410 (1,916,410 ) Fair value of plan assets at the end of the year 3,621,068 — 4,508,570 379,998 — 1,953,967 1,895,591 4,142,553 360,700 2018 2017 TCSPREV BrTPREV TelemarPrev PBS-Telemar PAMEC TCSPREV BrTPREV TelemarPrev PBS-Telemar PAMEC Underfunded (overfunded) status of plan (364,552 ) — (343,286 ) (50,869 ) 4,397 (1,328,701 ) 629,120 (317,500 ) (53,041 ) 3,300 Net periodic defined benefit pension cost for the years ended December 31, 2018, 2017 and 2016 includes the following: 2018 TCSPREV BrTPREV TelemarPrev PBS-Telemar Net service cost 196 74 1,870 41 Interest cost 78,222 218,104 362,887 29,114 Expected return on plan assets (195,301 ) (161,415 ) (394,097 ) (34,332 ) Amortization of net actuarial losses (gains) 32,823 Amortization of prior year service costs (gains) (5,636 ) 1,552 Net periodic pension cost (benefit) (122,519 ) 58,315 3,483 (5,177 ) 2017 TCSPREV BrTPREV TelemarPrev PBS-Telemar Net service cost 457 102 1,545 32 Interest cost 64,927 260,650 397,842 32.488 Expected return on plan assets (220,246 ) (210,579 ) (440,696 ) (35,817 ) Amortization of net actuarial losses (gains) 16,482 Amortization of prior year service costs (gains) (5,636 ) 1,552 Net periodic pension cost (benefit) (160,498 ) 51,724 (24,828 ) (3,297 ) 2016 TCSPREV BrTPREV TelemarPrev PBS-Telemar PAMEC Net service cost 551 138 2,042 24 Interest cost 62,214 249,319 350,701 30,475 330 Expected return on plan assets (193,747 ) (206,407 ) (413,965 ) (34,872 ) Amortization of net actuarial losses (gains) 4,380 Amortization of prior year service costs (gains) (5,636 ) 1,552 Amortization of initial transition obligation (1,051 ) Net periodic pension cost (benefit) (136,618 ) 44,603 (57,894 ) (4,373 ) 330 The net periodic pension cost expected to be recognized in 2019 are as follows: 2019 TCSPREV TelemarPrev PBS-Telemar PAMEC Net service cost 265 1,484 32 Interest cost 287,492 464 370,526 29,117 Expected return on plan assets (271,132 ) (388,996 ) (33,471 ) Amortization of net actuarial losses (gains) 23,466 Amortization of prior year service costs (gains) 46,728 Net periodic pension cost (benefit) 63,353 464 6,480 (4,322 ) The following actuarial assumptions were used to determine the actuarial present value of the Company’s projected benefit obligation: 2018 BrTPREV TelemarPrev and and TCSPREV PAMEC PBS-Telemar Discount rate for determining projected benefit obligations 9.20 % 9.20 % 9.20 % Expected long-term rate of return on plan assets 9.20 % 9.20 % 9.20 % Annual salary increases By Sponsor By Sponsor By Sponsor Rate of compensation increase 4,00 % 4,00 % 4,00 % Inflation rate assumption used in the above 4,00 % 4,00 % 4,00 % 2017 BrTPREV TelemarPrev and and TCSPREV PAMEC PBS-Telemar Discount rate for determining projected benefit obligations 9.83 % 9.83 % 9.83 % Expected long-term rate of return on plan assets 9.83 % 9.83 % 9.83 % Annual salary increases By Sponsor By Sponsor By Sponsor Rate of compensation increase 4,30 % 4,30 % 4,30 % Inflation rate assumption used in the above 4,30 % 4,30 % 4,30 % Investment policy of the plans The investment policies and strategies for the two single-employer benefit pension plans PBS-Telemar 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, 2018 consists mainly of the following portfolio: 93% in debt securities, 4% in equity of Brazilian companies and 3% in real estate and other assets. PBS-Telemar The investment policies and strategies for 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 % 17.00 % 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 at December 31, 2018 is as follows: ASSET SEGMENT TCSPREV PBS- Telemar TelemarPrev Fixed income 86.17 % 90.48 % 92.51 % Variable income 2.90 % 1.30 % 1.61 % Equity securities 9.23 % 6.65 % 4.21 % Real estate 0.43 % 0.38 % 0.67 % Investments abroad 0.85 % 0.92 % 0.79 % Loans to participants 0.42 % 0.26 % 0.21 % Total 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 PBS-Telemar TelemarPrev 2019 263,210 23,288 275,663 2020 259,437 24,127 283,101 2021 266,985 24,964 294,351 2022 274,169 25,811 305,905 2023 281,150 26,688 317,588 2024 until 2028 1,501,637 145,953 1,773,564 (b) Employee profit sharing In the year ended December 31, 2018, 2017 and 2016 the Company and its subsidiaries recognized provisions for employee profit sharing based on individual and corporate goal attainment estimates totaling R$265,753, R$309,744 and R$74,211, respectively. (c) Share-based compensation The Long-term Incentive Program (2015-2017), approved by the Company’s Board of Directors on March 13, 2015, sought a greater alignment with the Company’s management cycle and business priorities. The Program consisted of the payment of gross cash reward, in accordance with the 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. The beneficiaries are not entitled to receiving Company shares since the Program does not provide for the transfer of shares to its beneficiaries. The last installment of this program, referring to 2017, was paid in January 2018. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | 24. SEGMENT INFORMATION The Company’s management 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: 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 Management 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 small, medium-sized, No single customer represent more than 10% of revenues neither 10% of receivables, Telecommunications in Brazil In preparing the financial information 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, 2018, 2017 and 2016 is as follows: 2018 2017 2016 Residential 8,401,599 9,170,835 9,376,266 Personal mobility 7,250,462 7,644,515 7,848,610 SMEs/Corporate 5,980,807 6,485,898 7,606,598 Other services and businesses 226,985 255,692 332,078 Net operating revenue 21,859,853 23,556,940 25,163,552 Operating expenses Depreciation and amortization (5,881,861 ) (5,803,487 ) (6,128,402 ) Interconnection (653,867 ) (771,212 ) (1,141,786 ) Personnel (2,554,375 ) (2,749,038 ) (2,750,323 ) Third-party services (5,833,570 ) (6,149,189 ) (6,243,623 ) Network maintenance services (1,102,809 ) (1,235,760 ) (1,501,701 ) Handset and other costs (185,436 ) (214,102 ) (252,265 ) Advertising and publicity (379,676 ) (410,495 ) (427,463 ) Rentals and Insurance (4,335,892 ) (4,152,521 ) (4,284,672 ) Provisions/reversals (89,631 ) (143,517 ) (1,056,436 ) Allowance for doubtful accounts (1,062,712 ) (740,575 ) (622,527 ) Impairment losses (225,512 ) Taxes and other expenses (201,296 ) (277,372 ) (399,123 ) Other operating income (expenses), net (17,610 ) (1,234,477 ) (132,211 ) OPERATING INCOME (LOSS) BEFORE FINANCIAL INCOME (EXPENSES) AND TAXES (438,882 ) (324,805 ) (2,492 ) Reorganization items, net 31,580,541 (2,371,919 ) (9,005,998 ) FINANCIAL INCOME (EXPENSES) Financial income 1,042,865 1,331,699 944,611 Financial expenses (5,068,382 ) (2,075,430 ) (4,539,997 ) PRETAX INCOME 27,116,142 (3,440,455 ) (12,603,876 ) Income tax and social contribution 429,495 (1,498,216 ) (87,379 ) INCOME (LOSS) FROM CONTINUING OPERATIONS 27,545,637 (4,938,671 ) (12,691,255 ) Reconciliation of revenue and income (loss) and information per geographic market In the years ended December 31, 2018, 2017 and 2016, the reconciliation of the revenue of the segment Telecommunications in Brazil and total consolidated revenue is as follows: 2018 2017 2016 Net operating revenue Revenue related to the reportable segment 21,859,853 23,556,940 25,163,552 Revenue related to other businesses 200,161 232,714 832,871 Consolidated net operating revenue 22,060,014 23,789,654 25,996,423 In the years ended December 31, 2018, 2017 and 2016, the reconciliation between the profit (loss) before taxes of the segment telecommunications in Brazil and the consolidated profit (loss) before taxes is as follows: 2018 2017 2016 Profit (loss) before taxes Telecommunications in Brazil 27,116,142 (3,440,455 ) (12,603,876 ) Other businesses (69,444 ) (938,193 ) (830,753 ) Consolidated income before taxes 27,046,698 (4,378,648 ) (13,434,629 ) Total assets, liabilities and property, plant and equipment and intangible assets per geographic market at December 31, 2018 and 2017 are as follows: 2018 Total assets Total Property, Intangible Capital Brazil 62,324,414 42,015,131 28,360,030 7,977,841 5,211,774 Other, primarily Africa 4,923,187 526,870 108,768 47,601 34,467 2017 Total assets Total Property, Intangible Capital Brazil 66,311,553 80,316,703 26,934,278 9,206,776 4,258,545 Other, primarily Africa 4,675,216 354,127 149,176 48,063 57,947 No single customer accounts for more than 10% of consolidated revenue. |
RELATED-PARTY TRANSACTIONS
RELATED-PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
RELATED-PARTY TRANSACTIONS | 25. RELATED-PARTY TRANSACTIONS Transactions with joint venture, associates, and unconsolidated entities 2018 2017 Accounts receivable and other assets 6,359 5,929 Other entities 6,359 5,929 2018 2017 Accounts payable and other liabilities 74,210 67,654 Hispamar 66,704 62,094 Other entities 7,506 5,560 2018 2017 Revenue Revenue from services rendered 347 119 Other entities 347 119 Financial income 430 Other entities 430 2018 2017 Costs/expenses Operating costs and expenses (236,087 ) (215,079 ) Hispamar (207,271 ) (185,223 ) Other entities (28,816 ) (29,856 ) Financial expenses (167 ) Hispamar (158 ) Other entities (9 ) The balances and transactions with jointly controlled entities, 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 lease of their infrastructure. Compensation of key management personnel As at December 31, 2018, the compensation of the officers responsible for the planning, management and control of the Company’s activities, including the compensation of the directors and executive officers, totaled R$81,244 (R$49,688 in 2016). The ratification of the JRP by the Court, after its voting and approval by the creditors at the General Creditors’ Meeting entailed the payment special, one-off, |
HELD-FOR-SALE ASSETS
HELD-FOR-SALE ASSETS | 12 Months Ended |
Dec. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
HELD-FOR-SALE ASSETS | 26. HELD-FOR-SALE 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 at the time 75% of Africatel’s share capital, and/or dispose of its assets. On February 27, 2019, the Company was notified of the final decision issued by the Arbitration Court under the arbitration proceeding filed against the other Unitel shareholders. The Arbitration Court judged that the other Unitel shareholders had violated several provisions of Unitel’s Shareholders’ Agreement, which resulted in a significant decrease of PT Ventures’ stake in Unitel. The Court also judged that the other Unitel shareholders failed to ensure, after November 2012, that PT Ventures received the same amount of foreign currency-denominated dividends as the other foreign Unitel shareholder. As a result, the Court sentenced the other Unitel shareholders to paid to PT Ventures, jointly and severally, US$339.4 million plus interest (calculated as from February 20, 2019 and equivalent to the 12 months US dollar LIBOR plus two percentage points), corresponding to the loss of the equity interest amount of PT Ventures, and US$314.8 million plus interest (simple interest of 7% as from the different dates when such amounts should have been received) related to dividends not received plus the net reimbursement of the proceeding’s costs of approximately US$12 million. The Court overruled all the retrial requests filed by the other Unitel shareholders. The decision results in a reaffirmation of PT Ventures’ rights as shareholder of 25% Unitel’s capital, as prescribed by the Shareholders’ Agreement. PT Ventures retains all its rights provided for in the Shareholders’ Agreement, including the right to appoint the majority of Unitel’s Board of Directors’ members and the right to receive Unitel’s past and future dividends. The group of assets and liabilities of the African operations are stated at the lower of their carrying amounts and their fair values less costs to sell, and are consolidated in the statement of profit or loss since May 5, 2014. The main components of the assets held sale and liabilities associated to assets held for sale of the African operations are as follows: 2018 2017 Held-for-sale 4,923,187 4,675,216 Cash, cash equivalents and short-term investments 82,639 156,128 Accounts receivable 108,343 123,109 Dividends receivable (i) 2,566,935 2,012,146 Held-for-sale 1,843,778 1,965,972 Other assets 145,709 123,865 Deferred Income Tax 54,540 Investments 19,414 42,217 Property, plant and equipment 108,768 149,176 Intangible assets 47,601 48,063 Liabilities directly associated to assets held for sale 526,871 354,127 Borrowings and financing 188 260 Trade payables 52,064 34,407 Provisions for pension plans 366 Other liabilities 474,619 319,094 Non-controlling 243,490 293,456 Total held for sale assets, net of the corresponding liabilities 4,152,826 4,027,633 (i) This caption refers to the estimated recoverable amount of dividends and correspondent interests receivable from Unitel. As of December 31, 2018 gross amount of unpaid dividends by Unitel to PT Ventures totaled US$821 million and refers to the distribution of accumulated earnings in 2009 and the distribution of profits for fiscal years 2011, 2012, 2013, 2014 and 2017. In order to estimate the present value of the recoverable amount of unpaid dividends the Company takes into account (1) its legal advisors’ opinion regarding the outcome of the law suits filed in a Angolan’s Court and Paris’ ICC to collect this amounts from Unitel, (2) the liquidity position of Unitel as of December 31, 2017, (3) the decision of Unitel to accrue interests on the delayed payments and (4) a weight average cost of capital and an interest rate for accrual of interests; (ii) Refers mainly to the fair value of the indirect interest financial investment of 25% of Unitel’s share capital, classified as held for sale. As at December 31, 2018 the estimated fair value of the investment in Unitel was R$1,760 million (R$1,920 million at December 31, 2017). The fair value of this investment is computed by the Company using a discounted cash-flow methodology, which includes (1) cash flows forecasts for a seven-year period, (2) a 1.5% growth rate to extrapolate the cash flows projections (1.5% in 2017), (3) exchange rate forecasts of Angolan Kwanza and (4) a weight average cost of capital of 17.6% (17.1% in 2017), which was computed based on financial market information and on the assessment of the management regarding the business environment and relationship with the others shareholders and Unitel itself. The Company monitors and periodically updates the main assumptions used in the fair value measurement considering the changes occurred in financial market conditions and the impacts of news events related to the investment, notably the lawsuits filed against Unitel and its shareholders in Angolan Courts and ICC Paris. (iii) Represented mainly by the Samba Luxco’s 14% stake in Africatel and, consequently, in its net assets. In the first quarter of 2017, the transactions provided for in the contractual instruments entered into with Samba Luxco, which reduced its stake in Africatel, while Africatel transferred to Samba Luxco its entire stake in MTC. In December 2018, annual impairment tests were conducted based on the internal valuation made, including cash flows forecasts for a five-year period, the choice of a growth rate to extrapolate the cash flows projections, and definition of an appropriate discount rate, calculated based on the weight average cost of capital of from 15.3% to 21.2%, taking into consideration Africans business environment. |
OTHER INFORMATION
OTHER INFORMATION | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
OTHER INFORMATION | 27. OTHER INFORMATION In December 2018, we became aware that the Penalty Proceedings Authority and CVM’s Specialized Federal Attorney had issued Punitive Administrative Proceedings Reports proposing that certain executives, directors, and shareholders be held accountable for the alleged violations of the Brazilian Corporate Law (Law 6404/1976) in connection with the facts related to the restructuring between Oi and Pharol (former Portugal Telecom) announced in October 2013 and the public offer for distribution of Oi shares completed in May 2014. The Company is not a party to these proceedings. As for the mentioned executives, if they are considered accountable in these Punitive Administrative Proceedings, they will be subject to a penalty that can range from a warning to interdiction, for a period of up to 20 years, to act as member of a board of directors or executive committee of publicly-held corporations in Brazil. |
REORGANIZATION ITEMS, NET
REORGANIZATION ITEMS, NET | 12 Months Ended |
Dec. 31, 2018 | |
Reorganizations [Abstract] | |
REORGANIZATION ITEMS, NET | 28. REORGANIZATION ITEMS, NET Transactions and events directly associated with the reorganization are required, under the guidance of ASC 852 Reorganizations, to be separately disclosed and distinguished from those of the ongoing operations of the business. The Company used the classification “Reorganization items, net” on the consolidated statements of operations to reflect expenses, gains and losses that are the direct result of the reorganization of its business. 2018 2017 2016 Gain on restructuring of Qualified Bonds 12,881,478 Adjustment to present value – Borrowings and financing 13,928,661 Adjustment to present value – Anatel (AGU) and other payables 5,577,234 Anatel provision for contingencies (1,568,798 ) (6,604,718 ) Other provision for contingencies (a) (347,437 ) (1,146,458 ) (2,349,898 ) Income from short-term investments 174,281 713,276 201,533 Professional fees (b) (633,676 ) (369,938 ) (252,915 ) Total reorganization items, net 31,580,541 (2,371,918 ) (9,005,998 ) (a) These amounts are the result of the adjustment to record contingent liabilities to their allowed claim amount which is difference than their carrying amount prior to the JR Proceedings. (b) During the year ended December 31, 2018, 2017 and 2016 the Company incurred in R$634 million, R$370 million and R$253 million related to professional advisors who are assisting with the bankruptcy process, respectively. |
LIABILITIES SUBJECT TO COMPROMI
LIABILITIES SUBJECT TO COMPROMISE | 12 Months Ended |
Dec. 31, 2018 | |
Text Block [Abstract] | |
LIABILITIES SUBJECT TO COMPROMISE | 29. LIABILITIES SUBJECT TO COMPROMISE As a result of the judicial reorganization proceedings in Brazil and other international jurisdictions (which are considered to be similar in all substantive respects to Chapter 11) prepetition liabilities, as shown below were classified as subject to compromise based on the assessment of these obligations following the guidance of ASC 852 Reorganizations 2018 2017 Borrowings and financing — 49,129,546 Derivative financial instrument — 104,694 Trade payables — 2,139,312 Provision for civil contingencies - Anatel — 9,333,795 Provison fo pension plan — 560,046 Other — 43,334 Provision for labor contingencies — 899,226 Provision for civil - other claims — 2,929,275 Liabilities subject to compromise (*) — 65,139,228 (*) The total amount of prepetition liabilities subjected to compromise differs from the R$63,960,008 amount of the Creditors List prepared by the Company and filed on May 29, 2017. Per ASC 852, prepetition liabilities subject to compromise included the best estimate, as per the criteria set forth in ASC 450, of contingencies/claims subject to compromise and that in accordance with the Brazilian Law were not included in the Creditor’s List. Recognition of the effects of the ratification of the Judicial Reorganization Plan As a result of the approval of JRP at the GCM meeting held on December 19 and 20, 2017 and its subsequent ratification by the Judicial Reorganization Court on January 8, 2018, and published on the Official Gazette on February 5, 2018, the Company’s management, based on the terms and conditions of the JRP, recorded the effects caused by the restructuring/novation of the prepetition liabilities subject to the Judicial Reorganization in the consolidated financial statements for year ended December 31, 2018. The movements in the restructured prepetition liabilities and the accounting adjustments made for initial recognition of the terms and conditions set forth by the approved and ratified JRP, including the effects on the fair value of these liabilities pursuant to the criteria of ASC 820, and applicable GAAP, are as follow: 12/31/2017 Reclassifications Mediations Haircut (i) Equity (ii) Present value Financial 12/31/2018 Liabilities subject to compromise Bondholders 32,314,638 (32,314,638 ) — — — — — — BNDES 3,326,952 (3,326,952 ) — — — — — — Other Borrowings and financing 13,487,957 (13,487,957 ) — — — — — — Derivative financial instrument 104,694 (104,694 ) — — — — — — Trade payables 2,139,312 (2,139,312 ) — — — — — — Provision for civil contingencies - Anatel 9,333,795 (9,333,795 ) — — — — — — Provison for pension plan 560,046 (560,046 ) — — — — — — Other 43,333 (43,333 ) — — — — — — Provision for labor contingencies 899,226 (1,036,172 ) 136,946 — — — — — Provision for civil - other claims 2,929,275 (2,218,538 ) (710,737 ) — — — — — Total - Liabilities subject to compromise 65,139,228 (64,565,437 ) (573,791 ) — — — — — Bondholders — 32,314,638 (161,600 ) (11,054,800 ) (11,613,980 ) (4,807,262 ) 2,035,699 6,712,695 BNDES – Borrowings and financing — 3,326,952 — — — — 289,122 3,616,074 Other Borrowings and financing — 13,592,651 50,375 — — (9,121,399 ) 1,599,510 6,121,137 Anatel (AGU) and other trade payables — 10,588,661 445,077 (1,826,678 ) — (5,577,234 ) 164,784 3,794,610 Provison for labor, civil and Anatel contingencies — 4,182,489 56,975 — — — 149,173 4,388,637 Provison for pension plan — 560,046 — — — — 14,679 574,725 Total - Liabilities not subject to compromise — 64,565,437 390,827 (12,881,478 ) (11,613,980 ) (19,505,895 ) 4,252,967 25,207,878 (i) Represent gains on restructuring of borrowings and financings, trade payables owing to ANATEL-AGU (ii) Represent the fair value of shares issued in partial settlement of the Senior Notes (Note 22). (iii) The financial liabilities have been adjusted to present value according to the criteria of ASC 852 as of the time at which it has reclassified each of the financial liabilities that were legally affected by the JRP from liabilities subject to compromise to borrowings and financings or trade payables. It was calculated taking into consideration the contractual flows provided for in the JRP, discounted using rates that range from 12.6% per year to 16.4% per year, depending on the maturities and currency of each instrument. (iv) Represent the contractual interest and foreign currency fluctuation calculated after completed the financial debt restructuring and other claims restructuring in the terms and conditions provided in the JRP. Under the Judicial Reorganization proceedings, claims are classified in one of four classes and the treatment of claims under the JRP is differentiated for each of these classes: • Class I – labor-related claims; • Class II – secured claims; • Class III – unsecured claims, statutorily or generally privileged claims, and subordinated claims; and • Class IV – claims held by “small companies” under Brazilian law. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 30. SUBSEQUENT EVENTS Market arbitration chamber proceeding On February 28, 2018, one of the Company’s shareholders, Bratel filed a petition with the Market Arbitration Chamber ( Câmara de Arbitragem do Mercado árbitro de apoio On January 8, 2019, the Company and its subsidiaries Telemar and PT Participações and Pharol and its wholly-owned subsidiary Bratel entered into a settlement agreement for the termination of all court and off-court The terms and conditions of the settlement agreement, approved by both groups’ boards of directors, as summarized below: I. Terms and conditions to be met by the Company: a) Payment of €25 million to Pharol; b) Delivery to Pharol of 33.8 million Company shares held in treasury; c) The Company shall assume all the costs on court guarantees related to Pharol’s lawsuits in Portugal, as per the assumed obligation; d) In the event of the sale of the Company’s stake in Unitel, the Company shall deposit in a Pharol guarantee account an amount to cover possible unfavorable outcome in tax contingencies the likelihood of which is probable, as per the assumed obligations. II. Terms and conditions to be met by Pharol a) Use of at least €25 million to make a subscription in the Company’s Capital Increase – New Funds, provided for in the Company’s JRP; b) Attend and vote yes in any general shareholders’ meeting of the Company held to approve or confirm any action or measure provided for in the JRP; c) Keep aligned with the Company and support the implementation of the Company’s JRP, as approved and ratified at all court levels; d) Authorize the use by the Company of any amount returned by Portugal’s Tax Authority beginning March 24, 2015 related to the cost of guarantees and tax contingencies for purposes of the provisions of Paragraph 1, “c” and “d”, above. As at December 31, 2018, items a) and b) of the terms and conditions to be met by the Company were recognized in its liabilities, Provisions for civil contingencies, amounting to R$157,809, pursuant to ASC 855. Completion of the JRP Stages As Described in Note 1, on January 8, 2018, the Judicial Reorganization Court issued a decision that ratified the JRP and granted the judicial reorganization to the Oi Companies, which was published on February 5, 2018. On July 31, 2018, the restructuring of the financial debt, including the first capital increase provided for in the JRP (Capital Increase – Claim Capitalization) was completed with the implementation of the applicable terms and conditions, provided for in the JRP. On January 25, 2019 the Company completed the second capital increase provided for in the JRP (Capital Increase - New Funds), with the issue of 3,225,806,451 book-entry, registered common shares, without par value, including new common shares represented by ADSs, pursuant to the JRP and the subscription and commitment agreement entered into by the Company, its subsidiaries, and the Backstop Investors. Capital increase Exercise of subscription warrants and ADWs On October 28, 2018, the Company commenced the issuance and delivery of all exercised warrants and ADWs to its holders. The process was concluded on January 4, 2019. All warrants that were not exercised on or prior to January 2, 2019 have been cancelled. Preferential offer and completion of the Capital Increase – New Funds, pursuant to the commitment agreement As contemplated by Section 6 of the JRP, on November 13, 2018 the Company commenced a preemptive offering of common shares that was registered with the SEC under the Securities Act under which holders of common shares and preferred shares, including the ADS Depositary and The Bank of New York Mellon, as depositary of the Preferred ADS program, received transferable rights for each common share or preferred share held as of November 19, 2018. The subscription rights expired on January 4, 2019. On January 16, 2019, the Company issued 1,530,457,356 common shares to holders of subscription rights that had exercised those subscription rights with respect to the initial common shares. On January 21, 2019, the Company issued 91,080,933 common shares to holders of subscription rights that had requested subscriptions for excess common shares. The proceeds of these subscriptions were R$2,011 million. On January 25, 2019, the Company issued 1,604,268,162 common shares, representing the total number of common shares that were offered in the preemptive offering less the total number of initial common shares and excess common shares, to the Backstop Investors in a private placement under the terms of the commitment agreement for the aggregate amount of R$1,989 million. In addition, under the terms of the commitment agreement, on that date the Company issued 272,148,705 common shares in a private placement to the Backstop Investors and paid US$13 million to the Backstop Investors as compensation for their commitments under the commitment agreement. Buyback of Oi preferred shares At the meeting held in February 2019, the Board of Directors approved the buyback by Oi of up to 1,800,000 preferred shares in order to ensure the compliance with the obligation assumed by the Company to transfer own shares held in treasury to shareholder Bratel, wholly-owned subsidiary of Pharol, in the context of the agreement entered into by the two companies on January 8, 2019. The acquisition was made by investing part of the balance available in the Company’s capital reserve, through transactions conducted on B3’s over-the-counter Arbitration Decision – Unitel On February 27, 2019, the Company was notified of the final decision issued by the Arbitration Court under the arbitration proceeding filed against the other Unitel’s shareholders. The Arbitration Court judged that the other Unitel shareholders had violated several provisions of Unitel’s Shareholders’ Agreement, among other matters. This Court sentenced them to pay PT Ventures approximately US$653 million, plus interest, as compensation for damages. New Unitel Board of Directors At the General Shareholders’ Meeting of Unitel held on March 19, 2019 a new Board of Directors was elected consisting of five members, including two appointed by PT Ventures, one of whom will hold the position of Unitel’s General Director. Capital Increase – Dutch Companies Pursuant to the JRP approved on December 19 and 20, 2017, the debts of the JR Debtors of the group represented by the bonds were consolidated at Oi S.A.. In addition, as part of the payment of the bondholders’ claims, shares of the parent company (Oi S.A.) were delivered, consisting of new shares or existing shares held by PTIF. As a result, in order to correctly reflect these movements in accounting, it was necessary to enter into loan agreements on July 31, 2018, between Oi S.A. and Oi Coop, and between Oi S.A. and PTIF. These agreements provided for the possibility of paying and settling he total amount due through a capital increase, which was undertaken by Oi S.A. on January 31, 2019, amounting to €665,639,602.32 at Oi Coop and €1,100,259.843.00 at PTIF. |
CONDENSED COMBINED AND CONSOLID
CONDENSED COMBINED AND CONSOLIDATED DEBTOR IN-POSSESSION FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
CONDENSED COMBINED AND CONSOLIDATED DEBTOR IN-POSSESSION FINANCIAL INFORMATION | 31. CONDENSED COMBINED AND CONSOLIDATED DEBTOR IN-POSSESSION The financial statements below represent the condensed combined financial statements of the Debtors. The nonfiling entities are accounted for as nonconsolidated subsidiaries in these financial statements and, as such, their net loss is included using the equity method of accounting. Intercompany balances among the Debtors amounting to R$45.0 billion in 2018 (R$50.1 billion in 2017) related mainly with loans granted and have been eliminated in the financial statements presented below. Intercompany balances among the Debtors and the nonfiling entities have not been eliminated. 12/31/2018 12/31/2017 Current assets Cash and cash equivalents 4,233,558 6,690,900 Short-term investments 201,975 14,605 Trade accounts receivable 7,224,720 6,590,543 Inventories 177,973 137,575 Related parts 431,276 949,851 Recoverable taxes 1,304,991 1,818,242 Judicial Deposits 1,700,428 1,000,519 Pension plan assets 4,824 1,072 Dividends and interest on capital 14,512 529,934 Other assets 1,845,235 1,546,295 Total current assets 17,139,492 19,279,536 Non-current Long-term investments 36,987 114,839 Pension plan assets 23,050 Other taxes 714,653 626,057 Judicial Deposits 6,837,701 8,110,179 Investments 4,335,863 5,852,604 Property, plant and equipment, net 27,965,455 26,561,160 Intangible assets 7,978,956 9,185,107 Pension plan assets 753,827 1,598,792 Other assets 772,363 372,142 Total non-current assets 49,418,855 52,420,878 Total assets 66,558,347 71,700,415 Current liabilities Trade payables 6,108,115 6,697,217 Loans and financing 672,894 530,051 Payroll, related taxes and benefits 504,152 575,673 Current income taxes payable 925,590 1,334,859 Tax financing program 141,897 271,503 Provision for Contingencies 677,229 Dividends and interest on capital 6,168 6,222 Licenses and concessions payable 85,619 20,306 Other payables 956,770 1,146,780 Total current liabilities 10, 078 , 434 10,582,610 Non-Current liabilities Related parts 227,764 1,116,169 Loans and financing 15,785,558 Trade payables 3,736,117 Other taxes 623,917 867,657 Deferred taxes 497,375 Tax financing program 410,500 599,047 Provisions for Contingencies 3,857,871 617,103 Liability for pensions benefits 579,122 10,433 Licenses and concessions payable 604 Unearned revenues 1,531,464 1,596,462 Advances from customers 9,097 9,964 Other payables 766,730 641,253 Total non-current liabilities 27,528,140 5,956,067 Total liabilities not subject to compromise 37,606,574 16,538,677 Liabilities subject to compromise 65,139,227 Total liabilities 37,606,574 81,677,904 Shareholders’ equity (deficit) Total share capital 32,038,471 21,438,374 Share issued costs (377,429 ) (377,429 ) Capital reserves 11,532,995 13,242,374 Treasury shares (2,803,250 ) (5,531,092 ) Other comprehensive income (207,886 ) (241,780 ) Accumulated losses (11,231,129 ) (38,507,937 ) Total shareholders’ equity (deficit) 28,951,773 (9,977,489 ) Total liabilities and shareholders’ equity 66,558,347 71,700,415 Intercompany transactions among the Debtors amounting to R$3.06 billion in 2018 (R$5.64 billion in 2017) related mainly with interests and interconnection charges and have been eliminated in the financial statements presented below. Intercompany transactions among the Debtors and the nonfiling entities have not been eliminated. 12/31/2018 12/31/2017 Net operating revenue 21,036,018 20,429,388 Cost of sales and services (10,998,010 ) (15,573,190 ) Gross profit 10,038,008 4,856,197 Operating (expenses) income Selling expenses (4,834,472 ) (4,077,876 ) General and administrative expenses (2,235,870 ) (2,438,107 ) Other operating income (expenses), net (4,529,992 ) 118,609 Equity pickup 570,975 (138,999 ) Reorganization items, net 31,580,541 (2,371,919 ) Income (l oss ) before financial and taxes 30,589,190 (4,052,094 ) Financial expenses, net (3,949,716 ) (566,679 ) Income (loss) before income taxes 26,639,474 (4,618,772 ) Income tax (current and deferred) 562,205 884,602 Net income ( loss ) for the year 27,201,679 (3,734,170 ) |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of presentation and going concern assumption | Basis of presentation and going concern assumption These consolidated financial statements have been prepared according to United States Generally Accepted Accounting Principles (“U.S. GAAP”), which have been prepared under the assumption that the Company will continue as a going concern. In August 2014, the FASB issued an accounting standard update that requires management to assess whether there are conditions or events, considered in aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the financial statements are issued. If substantial doubt exists, additional disclosures are required. This update was effective for the Company’s annual periods starting ended December 31, 2016. The Company’s assessment of our ability to continue as a going concern is further discussed below. The retention of a large amount of funds in court deposits arising from discussions within the regulatory, labor, tax, and civil scope, with immediate impact on the liquidity of Oi Group, as well as with the imposition of high administrative fines, particularly by ANATEL, has contributed to the worsening financial situation in prior years. Additionally, the change in the standards of consumption of telecommunication services, due to the technological evolution, worsened this scenario of financial difficulties even more. With the mass supply of mobile telephony, cable TV and Internet services, the attractiveness of fixed telephony services have been reduced, resulting in a decrease in the base of subscribers of Oi Group in this segment. The financial statements for the year ended December 31, 2018, has been prepared assuming that the Company will continue as a going concern and in compliance with the legal requirements applicable to a judicial reorganization. The judicial reorganization is aimed at ensuring the continuation of the Oi Companies as going concerns. The likelihood that the Oi Companies will continue as going concerns increased with the approval of the JRP by a vast majority of creditors, at the General Creditors’ Meeting held on December 20, 2017, and approval that was ratified by the Judicial Reorganization Court on January 8, 2018. This ratification decision was issued on February 5, 2018 and, as a result, there was the novation of the involved borrowings and financing and the related balances recalculated pursuant to the terms and conditions of the Judicial Reorganization Plan, in accordance with the actions needed for its implementation. On July 27, 2018, the Company completed the Capital Increase – Claim Capitalization, through the formalization of the capitalization of part of the Unsecure Claims of the Qualified Bondholders, as provided for by the JRP and approved at the Board of Directors’ meeting held on March 5, 2018. The new shares issued were delivered to Company’s shareholders who exercised their preemptive rights and the holders of the Unsecure Claims of the Qualified Bondholders, through the formalization of the capitalization of their claims. Finally, on January 25, 2019, the Company completed the capital increase provided for by the JRP through the issue of 3,225,806,451 common shares for an aggregate subscription amount of R$4,000,000. The company believes that it has sufficient funds to continue as a going concern and discharge its obligations in the coming twelve months. The continuity of the Company as a going concern is ultimately depending on the successful outcome of the judicial reorganization and the realization of other forecasts of the Oi Companies. The Company has been successfully discharging the obligations set forth in the judicial reorganization proceedings and so far there have been no indications in this regard, we emphasize that these conditions and circumstances are herein described because of their own nature indicating the existence of uncertainty that may affect the success of the judicial reorganization and that it may cast doubts as to the Oi Companies’ ability to continue as going concerns. |
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 The estimate of the expected amount of the allowed claim under contingencies, following ASC 852 Reorganizations |
Allowance for doubtful accounts | Allowance for doubtful accounts The Company review its estimates of allowance for doubtful accounts considering the incurred loss model, including the effects of probable losses on accounts receivable taking into account the measures implemented to restrict the provision of services to and collect late payments from customers. |
Condensed Consolidated Financial Statements | Consolidated Financial Statements The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries, including the ones under bankruptcy in foreign jurisdictions (Oi Holanda and Portugal Telecom International Finance B.V) which were under the Company´s control as of December 31, 2018. 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. The assets and liabilities related to the operations in Africa are stated in a single line item of the balance sheet as held-for-sale The table below shows the equity interests held in the capital of the Company’s subsidiaries: Companies related to the continuing operations Company Core business Home country Direct 2018 Indirect 2018 Direct 2017 Indirect 2017 Oi Holanda Raising funds in the international market The Netherlands 100 % 100 % Portugal Telecom International Finance B.V Raising funds in the international market The Netherlands 100 % 100 % CVTEL, BV Investment management The Netherlands 100 % 100 % Carrigans Finance S.à.r.l. Investment management Luxembourg 100 % 100 % Copart 5 Property investments Brazil 100 % 100 % Rio Alto Gestão de Créditos e Participações S.A. (“Rio Alto”) Receivables portfolio management and interests in other entities Brazil 100 % 100 % Oi Serviços Financeiros S.A. (“Oi Serviços Financeiros”) Financial services Brazil 99.87 % 0.13 % 99.87 % 0.13 % Bryophyta SP Participações Ltda. Property investments Brazil 99.80 % 0.20 % 99.80 % 0.20 % Telemar Fixed telephony – Region I Brazil 100 % 100 % Oi Móvel Mobile telephony – Regions I, II, and III Brazil 100 % 100 % Paggo Empreendimentos S.A. Payment and credit systems Brazil 100 % 100 % Paggo Acquirer Gestão de Meios de Pagamentos Ltda. Payment and credit systems Brazil 100 % 100 % Paggo Administradora Ltda. (“Paggo Administradora”) Payment and credit systems Brazil 100 % 100 % Serede – Serviços de Rede S.A. (“Serede”) Network services Brazil 17.51 % 82.49 % 18.57 % 81.43 % Brasil Telecom Comunicação Multimídia Ltda. (“BrT Multimídia”) Data traffic Brazil 100 % 100 % Copart 4 Property investments Brazil 100 % 100 % Dommo Empreendimentos Imobiliários Ltda. Purchase and sale of real estate Brazil 100 % 100 % Brasil Telecom Call Center S.A. (“BrT Call Center”) Call center and telemarketing services Brazil 100 % 100 % BrT Card Serviços Financeiros Ltda. (“BrT Card”) Financial services Brazil 100 % 100 % Pointer Networks S.A. (“Pointer”) Wi-Fi Brazil 100 % 100 % Pointer Peru S.A.C Wi-Fi Peru 100 % 100 % VEX Venezuela C.A Wi-Fi Venezuela 100 % 100 % VEX USA Inc. Wi-Fi United States of America 100 % 100 % VEX Ukraine LLC Wi-Fi Ukraine 40 % 40 % Companies classified as assets held for sale Company Core business Home Direct 2018 Indirect 2018 Direct 2017 Indirect 2017 PT Participações, SGPS, S.A. (“PT Participações”) Management of equity investments Portugal 100 % 100 % Oi Investimentos Internacionais S.A. (“Oi Investimentos”) Business consulting and management services, preparation of projects and economic studies, and investment management Portugal 100 % 100 % Africatel GmbH & Co.KG. Investment management Germany 100 % 100 % Africatel GmbH Investment management Germany 100 % 100 % Africatel Holdings, BV Investment management The Netherlands 86 % 86 % PT Ventures, SGPS, S.A. Management of equity interests in the context of international investments Portugal 86 % 86 % Directel - Listas Telefónicas Internacionais, Lda. (“Directel”) Telephone directory publishing and operation of related databases, in international operations Portugal 86 % 86 % TPT - Telecomunicações Publicas de Timor, S.A. (“TPT”) Provision of telecommunications, multimedia and IT services, and purchase and sale of related products in Timor Portugal 76.14 % 76.14 % Directel Cabo Verde – Serviços de Comunicação, Lda. Telephone directory publishing and operation of related databases in Cape Verde Cape Verde 51.60 % 51.60 % Kenya Postel Directories, Ltd. Production, publishing and distribution of telephone directories and other publications Kenya 51.60 % 51.60 % Elta - Empresa de Listas Telefónicas de Angola, Lda. Telephone directory publishing Angola 47.30 % 47.30 % Timor Telecom, S.A. Telecommunications services concessionaire in Timor Timor 44 % 44 % CST – Companhia Santomense de Telecomunicações, S.A.R.L. Operation of fixed and mobile telecommunication public services in Sao Tomé and Principe Sao Tomé 43.86 % 43.86 % LTM - Listas Telefónicas de Moçambique, Lda. Management, publishing, operation and sale of telecommunications subscriber and classified ads directories Mozambique 43 % 43 % The equity interests in joint arrangements and interests in associates are measured using the equity method and are as follows: Company Core business Home Direct 2018 Indirect 2018 Direct 2017 Indirect 2017 Companhia AIX de Participações (“AIX”) Data traffic Brazil 50 % 50 % Paggo Soluções e Meios de Pagamento S.A. (“Paggo Soluções”) Financial company Brazil 50 % 50 % Gamecorp S.A. (“Gamecorp”) Pay TV service, except programmers Brazil 29.90 % 29.90 % Hispamar Satélites S.A. (“Hispamar”) Satellite operation Brazil 19.04 % 19.04 % |
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. 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 translated at the prevailing rate 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. At December 31, 2018 and 2017, the foreign currency-denominated assets and liabilities were translated into Brazilian Reais using mainly the following foreign exchange rates: Closing rate Average rate Currency 2018 2017 2016 2018 2017 2016 Euro 4.4390 3.9693 3.4384 4.3094 3.6089 3.8543 US dollar 3.8748 3.3080 3.2591 3.6558 3.1925 3.4833 Cape Verdean escudo 0.0403 0.0360 0.0313 0.0391 0.0327 0.0352 Sao Tomean dobra 0.000185 0.000162 0.000140 0.000177 0.000149 0.000160 Kenyan shilling 0.0381 0.0321 0.0318 0.0361 0.0309 0.0343 Namibian dollar 0.2698 0.2687 0.2325 0.2764 0.2401 0.2369 Mozambican metical 0.0627 0.0565 0.0450 0.0601 0.0499 0.0579 Angolan kwanza 0.0126 0.0200 0.0197 0.0147 0.0193 0.0214 |
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, defined by the Company as the Board of Executive Officers (“Comitê de Gestão”). 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. There were no business combinations for the years presented. |
Investment Securities | Investment Securities Investment securities at December 31, 2018 and 2017 consist of short-term and long-term investments classified as trading and an investment at Unitel and CVT are classified as available-for-sale. available-for-sale available-for-sale A decline in the market value of any available-for-sale year-end, |
Cash and cash equivalents | Cash and cash equivalents This caption includes cash and cash fund, banks, and highly liquid short-term investments (usually maturing within less than three months), immediately convertible into a known cash amount, and subject to an immaterial risk of change in value, which are stated at fair value at the end of the reporting period and which do not exceed their market value, and whose classification is determined as shown below. |
Cash investments | Cash investments Cash investments are classified according to their purpose as: (i) trading securities; (ii) held to maturity; and (iii) available for sale. Trading security investments are measured at fair value and their effects are recognized in profit or loss. Held-to-maturity Available-for-sale available-for-sale |
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 |
Non-current assets held-for-sale and discontinued operations | Non-current Long-lived assets are classified as held-for-sale if its carrying amount is will be recovered principally through a sale transaction rather than through continuing use and if meet they the held-for-sale criteria. For this to be the case, the disposal must be available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets, and its sale must be probable. The results of discontinued operations are reported in one line item 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, including any gain or loss recognized as adjustment of the carrying amount to fair value less cost to sell. |
Property, plant and equipment | Property, plant and equipment Property and equipment consists of transmission equipment, trunking and switching stations, metallic and fiber-optic cable networks and lines, underground ducts, posts and towers, data communication equipment, network systems and infrastructure and motor-generator groups. 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. Costs of major replacements and improvements are capitalized. Repair and maintenance expenditures that do not enhance or extend the asset’s useful life are charged to operating expenses as incurred. Depreciation is calculated on a straight-line basis, based on the estimated useful lives of the assets. The Company reviews the useful lives annually. |
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. Regulatory licenses acquired in a business combination are amortized over the STFC concession period. The regulatory licenses for the operation of the mobile telephony services are recognized at cost of acquisition and amortized over the effective period of each licenses. |
Long-lived assets | Long-lived assets Long-lived assets include assets that do not have indefinite lives, such as property, plant, and equipment, and purchased intangible assets subject to amortization. They are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If any indicators of impairment are present, it is performed a test for recoverability. The carrying value of a long-lived asset or asset group is not recoverable if it exceeds the sum of the undiscounted cash flows expected to be generated from the use and eventual disposition of the asset or asset group. If the undiscounted cash flows do not exceed the asset or asset group’s carrying amount, then an impairment loss is recorded, measured as the amount by which the carrying amount of a long-lived asset or asset group exceeds its fair value. |
Provision for Contingencies | Provision for contingencies Liabilities for loss contingencies arising from claims, assessment, litigation, fines and penalties are recorded when a present obligation as a result of past events exists, it is probable that a loss will occur and a reliable estimate of the obligation can be made. These liabilities do not include estimates of legal fees and other directly related costs to be incurred, and it takes into consideration the opinion of the management and its in-house |
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. Private pension plans and other postretirement benefits sponsored by the Company and its subsidiaries for the benefit of their employees are managed by two foundations. Contributions are determined based on actuarial calculations, when applicable, and charged to profit or loss on the accrual basis 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 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 |
Revenue recognition | Revenue recognition Effective January 1, 2018 the Company adopted Accounting Standards Update (“ASU”) 2014-09, 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. |
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. They also include banking fees and costs, financial intermediation costs on the collection of trade receivables, and other financial transactions. |
Income taxes | Income taxes Income taxes are recorded under the asset and liability method. Deferred taxes assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their tax basis and for tax loss carryforwards. Deferred tax asset is reduced by a valuation allowance if, based on the weight of evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized. 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 of benefit that is greater than 50 percent likely of being realized upon settlement. 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. In Brazil all audit periods prior to 2013 are closed for federal examination purposes. As of December 31, 2018 and 2017 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. |
Recent Accounting Pronouncements Adopted in 2018 | Recent Accounting Pronouncements Adopted in 2018 On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09, ASC 606 establishes a new five-step model that to account for revenue from contracts with costumers. Pursuant to ASC 606, revenue is recognized in an amount that reflects the consideration that an entity expects to be entitled to in exchange from the transfer of goods or services to a customer. The new revenue standard supersedes all the revenue recognition requirements in effect until December 31, 2017 pursuant to U.S. GAAP. Management determined the following impacts from adopting the new standard on January 1, 2018: Sales of handheld devices at a discount The Company offers its customers, who have acquired a given service package or entered into certain mobility contracts, handheld devices at a discount. Since the equipment (cellphone) is not a key condition for the provision of the service and there is no customization by the Company to offer the service using a given device, the Company considers such sale a separate performance obligation. Pursuant to ASC 606, the discount should be allocated to the performance obligations arising on the sale of plans and in a mobility contract and the revenue from the sale of handheld devices should increase due to the recognition of the revenue from the sale of cellphones at the time the control over the good is transferred to the customer, while the service revenue should be reduced throughout the transfer of the promised service. The total revenue earned throughout the entire service agreement will not change and there will be no change either in the revenue process from customers and the Company’s cash flows. The Company did not identify the significant financial impact on the sale of cellphones at a discount because the discounts amount is immaterial compared to the Company’s revenue as a whole. Revenue from registration/service installation fees The registration/installation fee collected from customers at the time a contract is nonrefundable and refers to the activity the Company is required to undertake when entering into a contract or a comparable activity required to fulfill such contract, while such activity does not entail the transfer of a good or the service promised to the customer. The fee is an advance payment for future goods or services and, therefore, should be recognized as revenue when such goods or services are supplied. For purposes of complying with ASC 606, considering that such fees are a separate performance obligation, revenue must be recognized together with the revenue of said service provision, i.e., it should be deferred and recognized in profit or loss throughout the contract period. As at January 1, 2018, the Company and its subsidiaries recognized a contractual liability as a contra entry to accumulated losses, which generated the deferral of the revenue from registration/installation fee according to contract duration (12 months), amounting to R$138 million, net of taxes. Recognition of costs incurred on the performance of a contract The Company must recognize as an asset the incremental costs incurred to obtain a contract with a customer that are expected to be recovered, and must recognize an impairment loss in profit or loss as the carrying amount of the recognized assets exceeds the remaining amount of the consideration the Company expects to receive in exchange for the goods and services to which the asset refers. The Company must recognize in assets certain costs, substantially commissions on sales, which are currently recognized directly in profit or loss and recognize them on a systematic basis, consistent with the transfer of the goods and services to which the asset refers to the customer. As at January 1, 2018, the Company and its subsidiaries recognized a contractual asset as a contra entry to accumulated losses, which generated the deferral of the costs incurred over the performance contract that were recognized in profit or loss based on the transfer of the goods and services to each customer (churn), amounting to R$793 million, net of taxes. The Company adopted ASC 606, taking into account the modified retrospective application permitted by the respective standards. Accordingly, we present below the consolidated results for the years ended December 31, 2018, less the effects recognized as a result of this application, compared with December 31, 2017. 12/31/2018 ASU ASC 606 12/31/2018 12/31/2017 Net operating revenue 22,060,014 15,588 22,075,602 23,789,654 Cost of sales and/or services (15,822,732 ) (15,822,732 ) (15,676,216 ) Gross profit 6,237,282 15,588 6,252,870 8,113,438 Operating income (expenses) Selling expenses (4,478,352 ) (119,214 ) (4,597,566 ) (4,399,936 ) General and administrative expenses (2,697,865 ) (2,697,865 ) (3,064,252 ) Other operating income (expenses), net 417,159 417,159 (1,043,922 ) Reorganization items, net 31,580,541 31,580,541 (2,371,918 ) Income (loss) before financial and taxes 31,058,765 (103,626 ) 30,955,139 (2,766,590 ) Financial expenses, net (4,012,067 ) (4,012,067 ) (1,612,058 ) Income (loss) before income taxes 27,046,698 (103,626 ) 26,943,072 (4,378,648 ) Income tax (current and deferred) 347,139 35,233 382,372 350,987 Net income (loss) for the year 27,393,837 (68,393 ) 27,325,444 (4,027,661 ) Recognition and Measurement of Financial Assets and Financial Liabilities - In January 2016, the FASB issued ASU 2016-01, |
New Accounting Standards | New Accounting Standards Leases - In February 2016, the FASB issued ASU 2016-02 2016-02 on-balance 2016-02 At the lease commencement date, the lessee shall recognize a liability related to the lease payments (i.e., a lease liability) and a lease asset that represents the right to use the underlying asset during the lease term (i.e., a right-of-use right-of-use There is no significant change in the lessor’s recognition based on ASC 842 regarding the current accounting. The lessors shall continue to classify all leases pursuant to the same classification principle, differentiating between two types of leases: operating and finance leases. ASC 842 also requires that both lessees and lessors make disclosures more comprehensive than the previous standard. ASC 842 is effective for annual periods beginning on or after January 1, 2019. The lessee can elect to adopt the standard using the full retrospective approach or a modified retrospective approach. The standard’s transition provisions allow certain exemptions. During the year ended 2018, the Company and its subsidiaries assessed the potential impacts on its financial statements arising from the first-time adoption of ASC 842. This valuation was segregated into different stages, such as: i) Inventory-taking of lease agreements; ii) Transition approach; iii) Measurement of the opening liability and the opening asset; iv) Valuation of the discount rate and estimated term; v) Impacts on first-time adoption. Transition The Company plans to adopt ASC 842 pursuant to the modified retrospective approach (i.e., beginning January 1, 2019, taking into account the right-of-use right-of-use. The Company will elect the package of practical expedients permitted under the transition guidance, which does not require reassessment of prior conclusions related to contracts containing a lease, lease classification and initial direct lease costs. As an accounting policy election, the company will exclude short-term leases (term of 12 months or less) from the balance sheet presentation and will account for non-lease Impacts On January 1, 2019, the Company’s management estimates that the changes introduced by ASC 842 will have material impacts to be recognized as a right-of-use The impacts refer basically to the lease agreements of towers, properties, stores, vehicles, and sites. In June 2016, the FASB issued ASU 2016-13, 2018-19, 2016-13. In January 2016, the FASB issued ASU 2016-01, 2016-01 2016-01 2016-01 |
BASIS OF PRESENTATION (Tables)
BASIS OF PRESENTATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Principal to be Repaid per Month | • Principal shall be repaid in 108 monthly installments, as described in the table below: Months Percentage of the amount to be 0 a 72 nd 0.0% 73 rd nd 0.33% 133 rd th 1.67% 180 th 1.71% |
Summary of Discounted Percentage on Payment of Unsecured Creditors | Unsecured Creditors with Judicial Deposits: Claim Amount Interval Discount % Up to R$1,000.00 0% R$1,000.01 to R$5,000.00 15% R$5,000.01 to R$10,000.00 20% R$10,000.01 to R$150,000.00 30% Over R$150,000.00 50% |
Schedule of Differences Between Accounting Policies and Practices Adopted In IFRS | The financial statements of the Company are prepared in accordance with accounting policies generally accepted in the United States of America (“U.S. GAAP”). Differences between these accounting policies and practices adopted in International Financial Reporting Standard - IFRS, where applicable to Oi, are summarized below: Reconciliation 12/31/2018 Equity Net income U nder U.S.GAAP 29,199,496 27,393,83 7 Impairment of long-lived assets (a) (1,226,125) (141,418) Business combinations prior to January 1, 2009 (b) 44,981 4,122 Pension plans and other post-retirement benefits (c) (689,574) (115,080) Capitalization of interest, net of amortization (d) 60,928 (1,780) Provision for onerous contracts (e) (4,493,895) (4,493,895) Settlement of judicial reorganization (f) (1,331,016) Deferred income tax (g) 3,300,785 U nder IFRS 22,895,811 24,615,555 |
Schedule of Judicial Reorganization Adjustments to Net Income | The following is a summary of the Judicial Reorganization adjustments to net income for the year ended December 31, 2018: Judicial reorganization 12/31/18 Settlement for lesser amounts of prepetition obligations and present value recognition under U.S. GAAP (6,527,238 ) Gain on reversal of interest and foreign currency on loans and financings under IFRS 5,196,222 (1,331,016 ) |
Restructuring Option One | |
Schedule of Principal Repayment Percentage per Six-month Period | • Principal shall be repaid in 24 semiannual, successive installments, as shown in the table below: Six-month Percentage of the amount to be six-month 0 to 10 th 0.0% 11 th th 2.0% 21 st rd 5.7% 34 th 5.9% |
Restructuring Option Two | |
Schedule of Principal Repayment Percentage per Six-month Period | • Principal shall be repaid in 24 semiannual, successive installments, as shown in the table below: Six-month Percentage of the amount to be six-month 0 to 10 th 0.0% 11 th th 2.0% 21 st rd 5.7% 34 th 5.9% |
Unqualified Bonds | Restructuring Option Three | |
Schedule of Principal Repayment Percentage per Six-month Period | • Principal shall be equivalent to 50% of the unqualified bondholders’ claims, capped at US$250,000,000, and shall be repaid in twelve (12) semiannual, successive installments, as shown in the table below: Six-month percentage of the amount to be six-month 0 to 12 th 0.0% 13 th th 4.0% 19 th rd 12.66% 24 th 12.70% |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Equity Interest Held in Capital of Company's Subsidiaries | The table below shows the equity interests held in the capital of the Company’s subsidiaries: Companies related to the continuing operations Company Core business Home country Direct 2018 Indirect 2018 Direct 2017 Indirect 2017 Oi Holanda Raising funds in the international market The Netherlands 100 % 100 % Portugal Telecom Internacional Finance B.V Raising funds in the international market The Netherlands 100 % 100 % CVTEL, BV Investment management The Netherlands 100 % 100 % Carrigans Finance S.à.r.l. Investment management Luxembourg 100 % 100 % Copart 5 Property investments Brazil 100 % 100 % Rio Alto Gestão de Créditos e Participações S.A. (“Rio Alto”) Receivables portfolio management and interests in other entities Brazil 100 % 100 % Oi Serviços Financeiros S.A. (“Oi Serviços Financeiros”) Financial services Brazil 99.87 % 0.13 % 99.87 % 0.13 % Bryophyta SP Participações Ltda. Property investments Brazil 99.80 % 0.20 % 99.80 % 0.20 % Telemar Fixed telephony – Region I Brazil 100 % 100 % Oi Móvel Mobile telephony – Regions I, II, and III Brazil 100 % 100 % Paggo Empreendimentos S.A. Payment and credit systems Brazil 100 % 100 % Paggo Acquirer Gestão de Meios de Pagamentos Ltda. Payment and credit systems Brazil 100 % 100 % Paggo Administradora Ltda. (“Paggo Administradora”) Payment and credit systems Brazil 100 % 100 % Serede – Serviços de Rede S.A. (“Serede”) Network services Brazil 17.51 % 82.49 % 18.57 % 81.43 % Brasil Telecom Comunicação Multimídia Ltda. (“BrT Multimídia”) Data traffic Brazil 100 % 100 % Copart 4 Property investments Brazil 100 % 100 % Dommo Empreendimentos Imobiliários Ltda. Purchase and sale of real estate Brazil 100 % 100 % Brasil Telecom Call Center S.A. (“BrT Call Center”) Call center and telemarketing services Brazil 100 % 100 % BrT Card Serviços Financeiros Ltda. (“BrT Card”) Financial services Brazil 100 % 100 % Pointer Networks S.A. (“Pointer”) Wi-Fi Brazil 100 % 100 % Pointer Peru S.A.C Wi-Fi Peru 100 % 100 % VEX Venezuela C.A Wi-Fi Venezuela 100 % 100 % VEX USA Inc. Wi-Fi United States of America 100 % 100 % VEX Ukraine LLC Wi-Fi Ukraine 40 % 40 % Companies classified as assets held for sale Company Core business Home Direct 2018 Indirect 2018 Direct 2017 Indirect 2017 PT Participações, SGPS, S.A. (“PT Participações”) Management of equity investments Portugal 100 % 100 % Oi Investimentos Internacionais S.A. (“Oi Investimentos”) Business consulting and management services, preparation of projects and economic studies, and investment management Portugal 100 % 100 % Africatel GmbH & Co.KG. Investment management Germany 100 % 100 % Africatel GmbH Investment management Germany 100 % 100 % Africatel Holdings, BV Investment management The Netherlands 86 % 86 % PT Ventures, SGPS, S.A. Management of equity interests in the context of international investments Portugal 86 % 86 % Directel - Listas Telefónicas Internacionais, Lda. (“Directel”) Telephone directory publishing and operation of related databases, in international operations Portugal 86 % 86 % TPT - Telecomunicações Publicas de Timor, S.A. (“TPT”) Provision of telecommunications, multimedia and IT services, and purchase and sale of related products in Timor Portugal 76.14 % 76.14 % Directel Cabo Verde – Serviços de Comunicação, Lda. Telephone directory publishing and operation of related databases in Cape Verde Cape Verde 51.60 % 51.60 % Kenya Postel Directories, Ltd. Production, publishing and distribution of telephone directories and other publications Kenya 51.60 % 51.60 % Elta - Empresa de Listas Telefónicas de Angola, Lda. Telephone directory publishing Angola 47.30 % 47.30 % Timor Telecom, S.A. Telecommunications services concessionaire in Timor Timor 44 % 44 % CST – Companhia Santomense de Telecomunicações, S.A.R.L. Operation of fixed and mobile telecommunication public services in Sao Tomé and Principe Sao Tomé 43.86 % 43.86 % LTM - Listas Telefónicas de Moçambique, Lda. Management, publishing, operation and sale of telecommunications subscriber and classified ads directories Mozambique 43 % 43 % |
Schedule of Equity Interests In Joint Arrangements And Interests In Associates | The equity interests in joint arrangements and interests in associates are measured using the equity method and are as follows: Company Core business Home Direct 2018 Indirect 2018 Direct 2017 Indirect 2017 Companhia AIX de Participações (“AIX”) Data traffic Brazil 50 % 50 % Paggo Soluções e Meios de Pagamento S.A. (“Paggo Soluções”) Financial company Brazil 50 % 50 % Gamecorp S.A. (“Gamecorp”) Pay TV service, except programmers Brazil 29.90 % 29.90 % Hispamar Satélites S.A. (“Hispamar”) Satellite operation Brazil 19.04 % 19.04 % |
Foreign Exchange Rates | At December 31, 2018 and 2017, the foreign currency-denominated assets and liabilities were translated into Brazilian Reais using mainly the following foreign exchange rates: Closing rate Average rate Currency 2018 2017 2016 2018 2017 2016 Euro 4.4390 3.9693 3.4384 4.3094 3.6089 3.8543 US dollar 3.8748 3.3080 3.2591 3.6558 3.1925 3.4833 Cape Verdean escudo 0.0403 0.0360 0.0313 0.0391 0.0327 0.0352 Sao Tomean dobra 0.000185 0.000162 0.000140 0.000177 0.000149 0.000160 Kenyan shilling 0.0381 0.0321 0.0318 0.0361 0.0309 0.0343 Namibian dollar 0.2698 0.2687 0.2325 0.2764 0.2401 0.2369 Mozambican metical 0.0627 0.0565 0.0450 0.0601 0.0499 0.0579 Angolan kwanza 0.0126 0.0200 0.0197 0.0147 0.0193 0.0214 |
Summary of Reconciliation of Statement of Operations ASC 606 Adjustments | The Company adopted ASC 606, taking into account the modified retrospective application permitted by the respective standards. Accordingly, we present below the consolidated results for the years ended December 31, 2018, less the effects recognized as a result of this application, compared with December 31, 2017. 12/31/2018 ASU ASC 606 12/31/2018 12/31/2017 Net operating revenue 22,060,014 15,588 22,075,602 23,789,654 Cost of sales and/or services (15,822,732 ) (15,822,732 ) (15,676,216 ) Gross profit 6,237,282 15,588 6,252,870 8,113,438 Operating income (expenses) Selling expenses (4,478,352 ) (119,214 ) (4,597,566 ) (4,399,936 ) General and administrative expenses (2,697,865 ) (2,697,865 ) (3,064,252 ) Other operating income (expenses), net 417,159 417,159 (1,043,922 ) Reorganization items, net 31,580,541 31,580,541 (2,371,918 ) Income (loss) before financial and taxes 31,058,765 (103,626 ) 30,955,139 (2,766,590 ) Financial expenses, net (4,012,067 ) (4,012,067 ) (1,612,058 ) Income (loss) before income taxes 27,046,698 (103,626 ) 26,943,072 (4,378,648 ) Income tax (current and deferred) 347,139 35,233 382,372 350,987 Net income (loss) for the year 27,393,837 (68,393 ) 27,325,444 (4,027,661 ) |
FINANCIAL INSTRUMENTS AND RIS_2
FINANCIAL INSTRUMENTS AND RISK ANALYSIS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Financial Assets and Financial Liabilities Carried At Fair Value Excluding Liabilities Subjected to Compromise | The table below summarizes the financial assets and financial liabilities carried at fair value at December 31, 2018 and 2017, excluding Liabilities subjected to compromise (note 28). Accounting 2018 2017 Carrying Fair value Carrying Fair value Assets Cash and banks Fair value 287,491 287,491 277,500 277,500 Cash equivalents Fair value 4,097,838 4,097,838 6,585,184 6,585,184 Short-term investments Fair value 238,962 238,962 136,286 136,286 Accounts receivable (i) Amortized cost 6,516,555 6,516,555 7,367,442 7,367,442 Available-for-sale Fair value 1,843,778 1,843,778 1,965,972 1,965,972 Dividends receivable Amortized cost 2,566,935 2,566,935 2,012,146 2,012,146 Liabilities Trade payables (i) Amortized cost 8,818,870 8,818,870 5,170,970 5,170,970 Borrowings and financing (ii) (iv) Amortized cost 7,140,960 7,140,960 54,251 54,251 Public debentures (iv) 3,103,106 3,103,106 Senior notes 6,205,840 6,937,764 Dividends and interest on capital Amortized cost 6,168 6,168 6,222 6,222 Licenses and concessions payable (iii) Amortized cost 85,619 85,619 20,910 20,910 Tax refinancing program (iii) Amortized cost 553,206 553,206 888,777 888,777 (i) The balances of accounts receivables and trade payables have near terms and, therefore, they are not adjusted to fair value. Under the terms and conditions of the Plan, suppliers claiming up to R$150,000, would receive their claims within up to 20 business days, after the date they elect this payment option, which ended on February 26, 2018. As for suppliers claiming more than R$150,000, in turn, would receive the remaining balance in four annual installments, which were adjusted to present 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. (iv) As a result of the approved Judicial Reorganization Plan, borrowings and financing were novated and their balances recalculated pursuant to the existing terms and conditions, in accordance with the plan’s stages for debt restructuring purposes. The present value adjustment recognized on the balance sheet with respect to each financial liability is amortized on a straight-line basis over the term of that financial liability as a financial expense. |
Schedule of Fair Value Measurement Hierachy | There were no transfers between levels during December 31, 2018 and 2017. Fair value Fair value Fair value Assets Cash Level 1 287,491 277,500 Cash equivalents Level 2 4,097,838 6,585,184 Short-term investments Level 2 238,962 136,286 Held-for-sale Level 3 1,843,778 1,965,972 |
Schedule of Financial Assets | Foreign currency-denominated financial assets and financial liabilities are presented in the balance sheet as follows (includes intragroup balances): 2018 2017 Carrying Fair value Carrying Fair Financial assets Cash 70,116 70,116 82,482 82,482 Cash equivalents 154,514 154,514 1,307 1,307 Short-term investments 662 662 Financial liabilities Borrowings and financing 8,816,766 9,548,690 (*) (*) (*) In light of the filing of the judicial reorganization request on June 20, 2016 the Company’s foreign currency-denominated financial liabilities are part of the list of payables subject to renegotiation. These assets and liabilities are presented in the balance sheet as follows: 2018 2017 Carrying amount Fair value Carrying Fair value Financial assets Cash equivalents 3,943,324 3,943,324 6,583,877 6,583,877 Short-term investments 238,962 238,962 135,624 135,624 Financial liabilities Borrowings and financing 7,633,140 7,633,140 |
Schedule of Exchange Rates Used for Foreign Currency Translation | The probable rates were then depreciated by 25% and 50% and used as benchmark for the possible and remote scenarios, respectively. Rate Rate Description 2018 Depreciation 2017 Depreciation Probable scenario US dollar 3.8748 0 % 3.3080 0 % Euro 4.4390 0 % 3.9693 0 % Possible scenario US dollar 4.8435 25 % 4.1350 25 % Euro 5.5488 25 % 4.9616 25 % Remote scenario US dollar 5.8122 50 % 4.9620 50 % Euro 6.6585 50 % 5.9540 50 % |
Impact of Foreign Exchange Exposure | The impacts of foreign exchange exposure, in the sensitivity scenarios estimated by the Company, are shown in the table below: 2018 Description Individual risk Probable Possible Remote US dollar debt Dollar appreciation 15,216,581 19,020,726 22,824,872 US dollar cash Dollar depreciation (154,852 ) (193,566 ) (232,279 ) Euro debt Euro appreciation 2,656,697 3,320,871 3,985,045 Euro cash Euro depreciation (69,777 ) (87,221 ) (104,666 ) Present value adjustment Dollar/euro depreciation (9,046,285 ) (11,307,855 ) (13,569,427 ) Total assets/liabilities indexed to exchange fluctuation 8,602,364 10,752,955 12,903,545 Total (gain) loss 2,150,591 4,301,181 |
Schedule of Exchange Rates Used for Interest Rate Contracts | Interest rate fluctuation risk sensitivity analysis Management believes that the most material risk related to interest rate fluctuations arises from its liabilities pegged to the TJLP and primarily the CDI. This risk is associated to an increase in those rates. It is worth mentioning that the TJLP rate remained stable at 7.0% per year from April 1, 2017 to until December 31, 2017. Beginning January 1, 2018, the TJLP was being successively reduced: 6.75% per year up to March 2018, 6.6% per year from April to June 2018, 6.56% from July to September 2018, and increased again from October to December 2018, to 6.98% per year. At the end of the quarter, however, the National Monetary Council decided to increase this rate again to 7.03% per year, effective for January-March 2019. Management estimated the fluctuation scenarios of the rates CDI and TJLP as at December 31, 2018. The rates used for the probable scenario were the rates prevailing at the end of the reporting year. For purposes of this analysis, the rates used for the probable scenario were the rates prevailing at the end of December 2018 and 2017. The probable rates were then depreciated by 25% and 50%, and used as benchmark for the possible and remote scenarios. 2018 Interest rate scenarios Probable scenario Possible scenario Remote scenario CDI TJLP CDI TJLP CDI TJLP 6.40 6.98 8.00 8.73 9.60 10.47 |
Impact of Interest Rate Exposure | The impacts of exposure to interest rates, in the sensitivity scenarios estimated by the Company, are shown in the table below: 2018 Description Individual Probable Possible Remote CDI-indexed CDI increase 4,122,410 5,373,161 6,714,517 TJLP-indexed debt TJLP increase 4,067,506 5,011,606 6,030,280 Total assets/liabilities pegged to the interest rate 8,189,916 10,384,767 12,744,797 Total (gain) loss 2,194,851 4,554,881 |
NET OPERATING REVENUE (Tables)
NET OPERATING REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Income and Expenses [Abstract] | |
Schedule of Net Operating Revenue | 2018 2017 2016 Gross operating revenue (*) 30,426,548 36,338,432 45,327,110 Deductions from gross revenue (8,366,534 ) (12,548,778 ) (19,330,687 ) Taxes (6,725,356 ) (7,707,961 ) (7,760,930 ) Discounts and other deductions (*) (1,641,178 ) (4,840,817 ) (11,569,757 ) Net operating revenue 22,060,014 23,789,654 25,996,423 (*) The Company simplified the breakdown of its bills sent to its customers. The changes in billing do not impact the taxes levied on sales and/or services or the net revenue. |
OPERATING EXPENSES (Tables)
OPERATING EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Text Block [Abstract] | |
Summary of Operating Expenses | 2018 2017 2016 Operating expenses by nature Third-party services (5,924,556 ) (6,221,058 ) (6,399,191 ) Depreciation and amortization (5,952,905 ) (5,881,302 ) (6,310,619 ) Rentals and Insurance (4,341,969 ) (4,162,659 ) (4,329,546 ) Personnel (2,594,464 ) (2,791,331 ) (2,852,224 ) Network maintenance service (1,104,015 ) (1,251,511 ) (1,540,320 ) Interconnection (658,068 ) (778,083 ) (1,173,475 ) Provision for contingencies (89,777 ) (143,517 ) (1,056,410 ) Provision for bad debt (i) (1,070,301 ) (691,807 ) (643,287 ) Advertising and marketing (382,091 ) (413,580 ) (448,990 ) Handset and other costs (196,347 ) (223,335 ) (284,119 ) Impairment losses (ii) — (46,534 ) (225,512 ) Taxes and other expenses (134,558 ) (345,132 ) (559,162 ) Other operating income (expenses), net (iii) (132,739 ) (1,234,477 ) (226,890 ) Total operating expenses (22,581,790 ) (24,184,326 ) (26,049,745 ) Operating expenses by function Cost of sales and/or services (15,822,732 ) (15,676,216 ) (16,741,791 ) Selling expenses (4,478,352 ) (4,399,936 ) (4,383,163 ) General and administrative expenses (2,697,865 ) (3,064,252 ) (3,687,706 ) Other operating income 2,204,134 1,985,101 1,756,100 Other operating expenses (1,773,483 ) (3,028,590 ) (2,988,067 ) Equity pick up (13,492 ) (433 ) (5,118 ) Total operating expenses by function (22,581,790 ) (24,184,326 ) (26,049,745 ) (i) In 2018, the Company reassessed the assumptions for estimate adopted for the provision for bad debt. (ii) As at December 31, 2018, no impairment was recognized. As at December 31, 2017 and 2016, the Company conducted the annual impairment test and recognized a loss on goodwill related to Africa which is being reported as held for sale, in amounting R$46,534 and R$225,512, respectively. (iii) In 2017 refers to the effects of non-recurring write-off |
FINANCIAL INCOME (EXPENSES) (Ta
FINANCIAL INCOME (EXPENSES) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Income and Expenses [Abstract] | |
Schedule of Other Nonoperating Income (Expense) | 2018 2017 2016 Financial income Exchange differences on translating foreign short-term investments (trading) 1,329 (135,226 ) Interest on judicial deposits and other assets 808,764 1,049,923 615,085 Income from short-term investments 142,597 112,394 Interest on related parties loans Other income 571,884 500,260 578,452 Total 1,524,574 1,550,183 1,170,705 Financial expenses and other charges a) Borrowing and financing costs (i) Inflation and exchange losses on third-party borrowings (2,645,980 ) 4,580,177 Interest on borrowings payable to third parties (1,399,687 ) (2,177,976 ) Derivatives (5,147,958 ) Subtotal: (4,045,667 ) (2,745,757 ) b) Other charges Loss on held-for-sale 292,700 (267,008 ) (1,090,295 ) Interest on other liabilities (800,413 ) (1,641,278 ) (598,301 ) Tax on transactions and bank fees (428,872 ) (512,003 ) (679,294 ) Monetary variation to provisions for contingencies 8,076 (264,511 ) (238,428 ) Interest on taxes in installments - tax financing program (28,079 ) (27,294 ) (19,869 ) Other expenses (iii) (534,386 ) (450,147 ) (174,070 ) Subtotal: (1,490,974 ) (3,162,241 ) (2,800,257 ) Total (5,536,641 ) (3,162,241 ) (5,546,014 ) Financial expenses, net (4,012,067 ) (1,612,058 ) (4,375,309 ) (i) In 2018, contractual interest and foreign currency fluctuation result from the incurrence of R$4,045 million of Borrowings and financing expenses as a result of the settlement of many of the claims in our JR Proceedings related to the debt instruments compared to no borrowings and financing expenses during the corresponding period of 2017 due to the elimination of the borrowings and financing expenses as a result of the commencement of the JR Proceedings in June 2016. (ii) In 2018, refers to the exchange gain related to the depreciation of Brazilian real against the US dollar and loss of R$489 million / US$126 million resulting from the revision of the recoverable amount of dividends receivable from Unitel and the fair value of the cash investment in Unitel. In 2017, refers to the loss of R$129 million / US$39 million (R$789 million / US$242 million in 2016) resulting from the revision of the recoverable amount of dividends receivable from Unitel and the fair value of the cash investment in Unitel and exchange losses related to the depreciation of the Kwanza against the US dollar and the Brazilian real. (iii) Represented mainly by financial fees and commissions. |
CASH, CASH EQUIVALENTS AND SH_2
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Cash and Cash Equivalents | (a) Cash and cash equivalents 2018 2017 Cash 287,491 277,500 Cash equivalents 4,097,838 6,585,184 Total 4,385,329 6,862,684 2018 2017 Repurchase agreements 2,742,731 6,225,547 Private securities Bank certificates of deposit (CDBs) 301,632 348,318 Time deposits 154,514 1,307 Other 3,888 10,012 Cash equivalents 4,097,838 6,585,184 (b) Short-term investments 2018 2017 Private securities 213,653 114,839 Government securities 25,309 21,447 Total 238,962 136,286 Current 201,975 21,447 Non-current 36,987 114,839 |
TRADE ACCOUNTS RECEIVABLE, NET
TRADE ACCOUNTS RECEIVABLE, NET (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Schedule of Financing Receivables | 2018 2017 Billed services 6,783,022 7,478,145 Unbilled services 984,062 634,241 Mobile handsets and accessories sold 619,821 597,267 Provision for bad debt (1,870,350 ) (1,342,211 ) Total 6,516,555 7,367,442 |
List of Past Due Financing Receivables | The aging list of trade receivables is as follows: 2018 2017 Current 6,250,613 6,096,205 Past-due 672,673 919,421 Past-due 131,798 144,818 Past-due 132,562 130,633 Past-due 104,628 128,175 Over 150 days past-due 1,094,631 1,290,401 Total 8,386,905 8,709,653 |
Schedule of Aging Accounts Receivable | The movements in the allowance for doubtful accounts were as follows: Balance in 2016 (1,084,895 ) Provision for bad debt (777,106 ) Trade receivables written off as uncollectible 519,790 Balance in 2017 (1,342,211 ) Provision for bad debt (1,216,658 ) Trade receivables written off as uncollectible 688,519 Balance in 2018 (1,870,350 ) |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Summary of Income Tax Expense Attributable to Income From Continuing Operation | Income tax (expense) benefit attributable to income from continuing operations consists of: 2018 2017 2016 Income tax and social contribution Current tax (expense) 115,706 (906,080 ) (712,814 ) Deferred tax (expense) benefit 231,433 1,257,067 (1,532,299 ) Total 347,139 350,987 (2,245,113 ) |
Summary of Tax Rate Reconciliation From Continuing Operation | The tax rate reconciliation from continuing operation consists of the following: 2018 2017 2016 Income (loss) before taxes (i) 27,046,698 (4,378,648 ) (13,434,628 ) Income tax and social contribution Income tax and social contribution at statutory rate (34%) (9,195,877 ) 1,488,740 4,567,774 Valuation allowance (ii) (4,367,062 ) (1,134,511 ) (4,048,859 ) Effect of foreign tax rate differential (23,063 ) (12,574 ) Tax effects of nondeductible expenses (iii) (652,940 ) (92,831 ) (2,892,381 ) Tax effects of tax-exempt 14,564,537 373,321 121,546 Tax incentives (basically, operating income) (iv) 3,068 14,007 21,121 Tax amnesty program (v) (274,529 ) — Other (4,587 ) (147 ) (1,740 ) Income tax and social contribution effect on profit or loss 347,139 350,987 (2,245,113 ) (i) At December 31, 2018, 2017 and 2016 income (loss) before income taxes and income tax (expense) benefit for continuing operations is as follows: 2018 Brazil Foreign operations Total Income (loss) before income taxes 37,559,050 (10,512,352 ) 27,046,698 Income tax benefit 343,082 4,057 347,139 Current tax income (expense) 164,050 (48,344 ) 115,706 Deferred tax income benefit 179,031 52,402 (*) 231,433 (*) The amount of R$ 52,402 is related to the Tax effect of the entities classified as held-for-sale. 2017 Brazil Foreign operations Total Loss before income taxes (3,115,832 ) (1,262,816 ) (4,378,648 ) Income tax benefit 311,895 39,092 350,987 Current tax (expense) (893,031 ) (13,049 ) (906,080 ) Deferred tax income benefit 1,204,926 52,141 (*) 1,257,067 (*) The amount of R$ 52,141 is related to the Tax effect of the entities classified as held-for-sale. 2016 Brazil Foreign operations Total Loss before income taxes (12,402,406 ) (1,032,222 ) (13,434,628 ) Income tax (expense) (2,054,234 ) (190,879 ) (2,245,113 ) Current tax (expense) (521,773 ) (191,041 ) (712,814 ) Deferred tax income (expense) benefit (1,532,461 ) 162 (1,532,299 ) (ii) Refers to the increase in the valuation allowance related to the deferred tax assets in 2018, 2017, and 2016. (iii) The main tax-exempt held-for-sale (iv) These tax incentives correspond mainly to a 75% reduction in the current tax due on operating income obtained as a result of telecommunication services rendered in certain northern and northeast regions of Brazil, 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. (v) Refers to a tax position taken in prior periods that were assessed by the taxing authorities. Although the Company believed in prior periods that these positions would more-likely-than-not |
Summary of Significant Components of Current and Deferred Taxes | (b) Significant components of current and deferred taxes ASSETS 2018 2017 Current recoverable taxes Recoverable income tax (IRPJ) (i) 287,472 565,725 Recoverable social contribution (CSLL) (i) 91,996 135,348 IRRF/CSLL - withholding income taxes (ii) 241,778 422,437 Total current 621,246 1,123,510 LIABILITIES 2018 2017 Current taxes payable Income tax payable 21,628 416,080 Social contribution payable 5,398 151,049 Total current 27,026 567,129 2018 2017 Deferred taxes assets and liabilities Other temporary differences (iii) 5,117,917 8,854,946 Tax loss carryforwards (iv) 13,703,530 5,752,241 Total deferred taxes assets 18,821,447 14,607,187 Other intangibles (2,121,763 ) (2,428,128 ) Pension plan assets (249,796 ) (333,899 ) Other temporary diferences (v) (790,534 ) (1,073,293 ) Total deferred tax liabilities (3,162,093 ) (3,835,320 ) Valuation allowance (iii) (15,636,304 ) (11,269,242 ) Total deferred taxes, net 23,050 (497,375 ) (i) Refer mainly to prepaid income tax and social contribution that will be offset against federal taxes payable in the future. (ii) Refer to withholding income tax (IRRF) credits on cash investments, derivatives, intragroup loans, government entities, and other amounts that are used as deductions from income tax payable for the years, and social contribution withheld at source on services provided to government agencies. (iii) For the year ended December 31, 2018, total valuation allowance increased from R$11,269,242 (10,134,731 in 2016) to R$15,636,304, reflecting a net change in the valuation allowance totaling R$4,367,062 recognized for the companies that, as of December 31, 2018, 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 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 tax-paying (iv) The tax loss carryfowards in Brazil and foreign subsidiaries is approximately R$29,692,453 and R$14,432,380, and corresponding to R$10,095,435 and R$3,608,095 of deferred tax assets, respectively, which do not expire, and may be carried forward indefinitely. The Company can offset their tax loss carryforwards against taxable income up to a limit of 30% per year, pursuant to the prevailing tax law. (v) Refer mainly the tax effects of foreign exchange liabilities, monetary variations of judicial deposits and tax incentives. |
Summary of Movements in Deferred Income Tax | Movements in deferred tax assets and liabilities The table below does not consider the roll forward of the deferred tax asset from held-for-sale Balance at 2017 Recognized in Other Add-backs/ Balance at 2018 Deferred tax assets arising on: Temporary differences Provision for contingencies 4,235,797 (2,961,996 ) 1,273,801 Allowance for doubtful accounts 693,315 (214,488 ) 478,827 Profit sharing 101,993 (7,489 ) 94,504 Foreign exchange differences 1,062,308 340,885 1,403,193 Other temporary differences 1,107,660 41,889 (972,464 ) 177,085 License 1,653,873 (231,860 ) 268,494 1,690,507 Tax loss carryforwards Tax loss carryforwards 5,752,241 7,923,539 27,750 13,703,530 Total deferred taxes assets 14,607,187 4,890,480 (676,220 ) 18,821,447 Other intangibles (2,428,128 ) 306,365 (2,121,763 ) Pension plan assets (333,899 ) (228,283 ) 312,386 (249,796 ) Other temporary differences (1,073,293 ) (422,469 ) 705,228 (790,534 ) Total deferred tax liabilities (3,835,320 ) (344,387 ) 312,386 705,228 (3,162,093 ) Valuation allowance (11,269,242 ) (4,367,062 ) (15,636,304 ) Total net deferred tax (497,375 ) 179,031 312,386 29,008 23,050 Balance at 2016 Recognized in Other Add-backs/ Balance at 2017 Deferred tax assets arising on: Temporary differences Provision for contingencies 3,827,131 408,666 4,235,797 Allowance for doubtful accounts 654,624 38,691 693,315 Profit sharing 22,304 79,689 101,993 Foreign exchange differences 1,062,308 — 1,062,308 Other temporary differences 2,037,477 (383,604 ) 1,653,873 License 1,246,117 (138,457 ) 1,107,660 Tax loss carryforwards Tax loss carryforwards 4,956,994 1,853,701 (1,058,454 ) 5,752,241 Total deferred taxes assets 13,806,955 1,858,686 — (1,058,454 ) 14,607,187 Other intangibles (2,707,265 ) 279,137 (2,428,128 ) Pension plan assets (316,060 ) (49,996 ) 32,157 (333,899 ) Other temporary differences (1,324,904 ) 251,611 (1,073,293 ) Total deferred tax liabilities (4,348,229 ) 480,752 32,157 (3,835,320 ) Valuation allowance (10,134,731 ) (1,134,511 ) — (11,269,242 ) Total net deferred tax (676,005 ) 1,204,927 32,157 (1,058,454 ) (497,375 ) (*) This year offsets relates to the tax debts included in the Tax Compliance Program (PRT) and in the Special Tax Compliance Program (PERT), as it was possible to convert some amount of tax loss carryforwards into tax credits in order to offset part of the debts paid under the rules of such Programs, in the amount of R$1,035 million and R$21 million, respectively (Note 18). R$ 208,642 refers to the utilization of tax loss carryfowards for Income Tax and R$ 849,812 refers to utilization of tax loss carryfowards for non-income |
OTHER TAXES (Tables)
OTHER TAXES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Text Block [Abstract] | |
Other Liabilities | ASSETS 2018 2017 Recoverable State VAT (ICMS) (i) 1,240,353 1,411,538 Taxes on revenue (PIS and COFINS) 215,860 244,853 Other 63,015 52,754 Total 1,519,228 1,709,145 Current 803,252 1,081,587 Non-current 715,976 627,558 LIABILITIES 2018 2017 State VAT (ICMS) (i) 556,693 610,847 ICMS Agreement No. 69/1998 34,113 22,595 Taxes on revenue (PIS and COFINS) (ii) 235,319 184,472 FUST/FUNTTEL/broadcasting fees (iii) 655,022 963,259 Other (iv) 181,437 530,153 Total 1,662,584 2,311,326 Current 1,033,868 1,443,662 Non-current 628,716 867,664 (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. (ii) Refers, basically, to the Social Integration Program Tax on Revenue (PIS) and Social Security Funding Tax on Revenue (COFINS) on revenue, financial income, and other income. The Company and its subsidiaries have filed legal proceedings to claim the right to deduct ICMS from the PIS and COFINS tax bases and the recovery of past unduly paid amounts, within the relevant statute of limitations. In March 2019, the 1 st nd non-levy The third lawsuit is still ongoing in the 2 nd The total adjusted amount of these credits at December 31, 2018, considering the three lawsuits, is approximately R$3.05 billion. The taw lawsuits on which a final decision was issued total approximately R$2.05 billion. In order to initiate the utilization of the tax credits recognized by the courts by offsetting them against federal taxes due, the Company is conducting a thorough analysis aimed at quantifying these tax credits and taking the actions necessary to secure their confirmation by the Federal Revenue Service. (iii) The Company and its subsidiaries Telemar and Oi Móvel filed lawsuits to discuss the correct calculation of the contribution to the FUST and in the course of the lawsuits made escrow deposits to suspend its collection. These discussions are also being judged by higher courts and a possible transformation of the deposited amounts into definitive payments should not occur within two (2) years (iv) Consisting primarily of monetary variation to suspended taxes and withholding tax on intragroup loans and interest on capital. |
JUDICIAL DEPOSITS (Tables)
JUDICIAL DEPOSITS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Banking and Thrift [Abstract] | |
Judicial deposits transactions | As set forth by relevant legislation, judicial deposits are adjusted for inflation. 2018 2017 Civil 5,849,978 6,948,344 Tax 2,337,508 2,660,132 Labor 1,197,144 1,637,668 Subtotal 9,384,630 11,246,144 Provision for losses (i) (649,910 ) (1,933,034 ) Total 8,734,720 9,313,110 Current 1,715,934 1,023,348 Non-current 7,018,786 8,289,762 (i) This amount represents the estimated loss of balances of judicial deposits which are in the process of reconciliation with the obtained statements. |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Schedule of Investments [Abstract] | |
Investments | 2018 2017 Joint venture 31,488 42,346 Investments in associates 44,124 42,115 Tax incentives, net of allowances for losses 31,876 31,579 Other investments 10,352 20,470 Total 117,840 136,510 |
Summary of the movements in investment balances | Summary of the movements in investment balances Balance at 2016 135,652 Share of profits of subsidiaries (433 ) Associates’ share of other comprehensive income 1,949 Other (658 ) Balance at 2017 136,510 Share of profits of subsidiaries (13,492 ) Associates’ share of other comprehensive income (2,270 ) Other (2,908 ) Balance at 2018 117,840 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant And Equipment | Works in Automatic Transmission Infrastructure Buildings Other assets Total Cost of PP&E (gross amount) Balance at 2016 2,413,770 19,974,446 56,720,433 27,568,591 4,311,533 5,866,031 116,854,804 Additions 4,661,570 2,060 375,050 268,931 17,906 55,614 5,381,131 Write-offs (93,922 ) (2,235 ) (19,656 ) (666,885 ) (821 ) (31,193 ) (814,712 ) Transfers (3,547,305 ) 33,016 1,875,594 1,170,165 141,666 326,864 — Balance at 2017 3,434,113 20,007,287 58,951,421 28,340,802 4,470,284 6,217,316 121,421,223 Additions 5,117,872 487 372,138 388,988 10,721 39,471 5,929,677 Write-offs (47,465 ) (1,827 ) (53,374 ) (601,842 ) (4,660 ) (3,567 ) (712,735 ) Transfers (5,152,907 ) 68,518 2,672,783 2,214,139 (15,168 ) 212,635 — Balance at 2018 3,351,613 20,074,465 61,942,968 30,342,087 4,461,177 6,465,855 126,638,165 Accumulated depreciation Balance at 2016 (18,267,700 ) (43,324,619 ) (21,665,423 ) (2,547,638 ) (4,969,592 ) (90,774,972 ) Depreciation expenses (338,003 ) (2,175,732 ) (1,158,457 ) (96,940 ) (396,589 ) (4,165,721 ) Write-offs 1,158 18,610 558,879 817 23,458 602,922 Transfers — (473 ) (625 ) (84,895 ) 85,995 2 Balance at 2017 (18,604,545 ) (45,482,214 ) (22,265,626 ) (2,728,656 ) (5,256,728 ) (94,337,769 ) Depreciation expenses (299,925 ) (2,271,906 ) (1,253,099 ) (95,679 ) (408,379 ) (4,328,988 ) Write-offs 1,834 48,582 443,347 1,542 2,085 497,390 Transfers (36 ) (151 ) (353 ) 33,568 (33,028 ) — Balance at 2018 (18,902,672 ) (47,705,689 ) (23,075,731 ) (2,789,225 ) (5,696,050 ) (98,169,367 ) Property, plant and equipment, net Balance at 2016 2,413,770 1,706,746 13,395,814 5,903,168 1,763,895 896,439 26,079,832 Balance at 2017 3,434,113 1,402,742 13,469,207 6,075,176 1,741,628 960,588 27,083,454 Balance at 2018 3,351,613 1,171,793 14,237,279 7,266,356 1,671,952 769,805 28,468,798 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, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangibles in Data processing Regulatory Other Total Cost of intangibles (gross amount) Balance at 2016 112,842 8,301,630 19,076,941 1,971,826 29,463,239 Additions 332,500 4,356 74,972 411,828 Transfers (428,295 ) 438,138 (9,843 ) Other (1,111 ) (382 ) (1,493 ) Balance at 2017 17,047 8,743,013 19,076,941 2,036,573 29,873,574 Additions 263,305 4,524 — 73,471 341,300 Transfers (253,143 ) 234,157 — 18,986 — Other (14 ) — — — (14 ) Balance at 2018 27,195 8,981,694 19,076,941 2,129,030 30,214,860 Accumulated amortization Balance at 2016 (7,148,833 ) (10,071,364 ) (1,731,983 ) (18,952,180 ) Amortization expenses (524,414 ) (1,025,438 ) (116,756 ) (1,666,608 ) Transfers 53 53 Balance at 2017 (7,673,194 ) (11,096,802 ) (1,848,739 ) (20,618,735 ) Amortization expenses (443,268 ) (1,001,234 ) (126,181 ) (1,570,683 ) Transfers — — — — Balance at 2018 (8,116,462 ) (12,098,036 ) (1,974,920 ) (22,189,418 ) Intangible assets, net Balance at 2016 112,842 1,152,797 9,005,577 239,843 10,511,059 Balance at 2017 17,047 1,069,819 7,980,139 187,834 9,254,839 Balance at 2018 27,195 865,232 6,978,905 154,110 8,025,442 Annual amortization rate (average) 20 % 10 % 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, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Trade Payabe | 2018 2017 Infrastructure, network and plant maintenance materials 2,861,712 2,658,436 Services 3,397,413 3,964,912 Rental of polls and rights-of-way 191,723 399,996 ANATEL AGU 7,147,137 Other 647,856 293,478 Adjustment to present value (5,426,971 ) Liabilities subject to compromise (2,145,852 ) Total 8,818,870 5,170,970 Current 5,225,862 5,170,970 Non-current 3,593,008 Trade payables subject to the Judicial Reorganization (i) 3,794,610 246,472 Trade payables not subject to the Judicial Reorganization 5,024,260 4,924,498 Total 8,818,870 5,170,970 Certain amounts initially recorded as liabilities subject to compromise (Note 29) were adjusted and reclassified to reflect the new legal terms and conditions established by the JRP Court. |
BORROWINGS AND FINANCING (Table
BORROWINGS AND FINANCING (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Non Current Liabilities | Balances of borrowings and financing as at December 31, 2018 are as follow: 2018 Contractual maturity Principal Interest Senior notes 7,068,263 Local currency Foreign currency 7,068,263 Jul 2025 Semiannual Non-qualified 326,376 Aug 2024 to Semiannual Collateralized claims 3,616,074 BNDES 3,616,074 Mar 2024 to Monthly Restructuring I 14,993,376 Local currency 8,640,054 Debentures (I) 6,788,519 Aug 2023 to Semiannual Other 1,851,535 Aug 2023 to Semiannual Foreign currency 6,353,322 Local currency Financial Institution 54,251 Jan 2019 to Monthly Overall Offer 4,332,352 Local currency 207,035 Feb 2038 to Single Foreign currency 4,125,317 Feb 2038 to Loan and debentures from subsidiaries (Note 27) Subtotal 30,390,692 Incurred debt issuance cost (12,126 ) Present value adjustment (*) (13,928,660 ) Total 16,449,906 Current 672,894 Non-current 15,777,012 (*) The financial liabilities have been adjusted to present value according to the criteria of ASC 852 as of the time at which it has reclassified each of the financial liabilities that were legally affected by the JRP from liabilities subject to compromise to borrowings and financings or trade payables. It was calculated taking into consideration the contractual flows provided for in the JRP, discounted using rates that range from 12.6% per year to 16.4% per year, depending on the maturities and currency of each instrument, the resulting discount will be amortized to financial expense over the term of the debt. |
Schedule of debt | Debt breakdown per currency 2018 Euro 198,931 US dollar 8,617,835 Brazilian reais 7,633,140 Total 16,449,906 Debt breakdown per index Index/rate 2018 Fixed rate 1.75% p.a. – 10.00% p.a. 8,562,117 CDI 0.75% p.a. – 1.83% p.a. 3,949,639 TJLP 2.95% p.a. + TJLP 3,614,820 TR 0% 14,430 Other 0% 308,900 Total 16,449,906 |
Long-term debt maturity | Maturity schedule of the long-term debt allocation schedule 2018 Long-term debt 2020 10,958 2021 3,953 2022 970 2023 295,155 2024 and following years 29,405,472 Total 29,716,508 |
LICENSES AND CONCESSIONS PAYA_2
LICENSES AND CONCESSIONS PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Contractors [Abstract] | |
Schedule of Licenses and Concessions Payable | 2018 2017 Personal Mobile Services - SMP 1,025 4,649 STFC concessions 84,594 16,261 Total 85,619 20,910 Current 85,619 20,306 Non-current 604 |
TAX FINANCING PROGRAM (Tables)
TAX FINANCING PROGRAM (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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: 2018 2017 Law 11941/09 and Law 12865/2013 tax financing program 496,240 638,409 REFIS II - PAES 4,336 PRT (MP 766/2017) (i) 54,528 233,051 PERT (Law 13496/2017) (ii) 2,438 12,981 Total 553,206 888,777 Current 142,036 278,277 Non-current 411,170 610,500 |
Schedule of Components of Tax Debt Refinancing Program | The amounts of the tax refinancing program created under Law 11941/2009, Provisional Act (MP) 766/2017, and Law 13469/2017, divided into principal, fine and interest, which include the debt declared at the time the deadline to join the program (Law 11941/2009 installment plan) was reopened as provided for by Law 12865/2013 and Law 12996/2014, are broken down as follows: 2018 2017 Principal Fines Interest Total Total Tax on revenue (COFINS) 42,921 156,674 199,595 299,533 Income tax 5,873 39,094 44,967 68,285 Tax on revenue (PIS) 44,043 35,842 79,885 89,954 Social security (INSS – SAT) 1,018 1,342 2,414 4,774 8,450 Social contribution 754 323 11,426 12,503 17,339 Tax on banking transactions (CPMF) 19,014 2,142 28,976 50,132 49,268 PRT – Other Debts - RFB 26,685 2,374 25,469 54,528 227,261 PRT – Social Security - INSS 5,790 PERT – Other Debts - RFB 1,146 1,292 2,438 12,981 Other 29,150 4,433 70,801 104,384 109,916 Total 170,604 10,614 371,988 553,206 888,777 |
Schedule of Future Payment of Tax Financing Program | The payment schedule is as follows: 2019 142,036 2020 85,070 2021 85,070 2022 85,070 2023 85,070 2024 e 2025 70,890 Total 553,206 |
PROVISION FOR CONTINGENCIES (Ta
PROVISION FOR CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Contingencies Broken Down | 2018 2017 Labor 1,457,181 697,190 Tax 650,083 660,304 Civil (i) 2,931,456 10,941 Total provisions 5,038,720 1,368,435 Current 680,542 Non-current 4,358,178 1,368,435 |
Summary of Activity of Contingency Provision | The following summarizes the activity of the contingency provision: Labor Tax Civil Total Balance in 12/31/2016 543,026 576,133 9,915 1,129,074 Monetary variation (i) 162,695 99,902 1,914 264,511 Additions/(reversals) (i) 92,803 49,616 1,098 143,517 Write-offs for payment/terminations (ii) (101,334 ) (65,347 ) (1,986 ) (168,667 ) Balance in 12/31/2017 697,190 660,304 10,941 1,368,435 Monetary variation (i) 22,244 77,697 19,072 119,013 Additions/(reversals) (i) (57,200 ) (49,659 ) 133,465 26,606 Write-offs for payment/terminations (ii) (241,225 ) (38,259 ) (378,339 ) (657,823 ) Reclassification from liabilities subjected to compromise 1,036,172 3,146,317 4,182,489 Balance in 12/31/2018 1,457,181 650,083 2,931,456 5,038,720 (i) The Company has been continually monitoring its proceedings, as well as the reprocessing of the provision estimation model taking into account the new profile and history of discontinuation of lawsuits in the context of the approval and Ratification of the JRP. Accordingly, the Company reversed the provision for contingencies and the related monetary variation. (ii) This line item, basically, includes the amounts related to proceedings terminated and included in the list of the Company’s judicial reorganization creditors, which were transferred to the line item trade payables and will be paid according to the terms of the JRP. |
Summary of Breakdown of Contingent Liabilities with Possible Unfavorable Outcome, Not recognized in Accounting | The table below shows a summary of the carrying amounts of the main legal matters with possible risk of loss and the amounts on December 31, 2018 and 2017. 2018 2017 Labor 770,982 53,328 Tax 27,586,094 26,175,239 Civil 1,723,110 191,819 Total 30,080,186 26,420,386 |
OTHER PAYABLES (Tables)
OTHER PAYABLES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Other Payables | 2018 2017 Provisions for indemnities payable 676,984 607,559 Third party consignment 56,302 35,293 Provision for asset decommissioning 17,410 16,716 Other 510,865 392,832 Total 1,261,561 1,052,400 Current 629,939 469,214 Non-current 631,622 583,186 |
UNEARNED REVENUES (Tables)
UNEARNED REVENUES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Unearned revenue | 2018 2017 Unearned revenues of the infrastructure assets 1,596,238 1,661,236 Unearned revenues of service installation fees 159,345 — Other 160,987 111,592 Total 1,916,570 1,772,828 Current 229,497 139,012 Non-current 1,687,073 1,633,816 |
SHAREHOLDERS' EQUITY (DEFICIT)
SHAREHOLDERS' EQUITY (DEFICIT) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Federal Home Loan Banks [Abstract] | |
Share Capital | Subscribed and paid-in Number of shares (in thousands) 2018 2017 Total capital in shares Common shares 2,298,247 668,034 Preferred shares 157,727 157,727 Total 2,455,974 825,761 Treasury shares Common shares 32,030 148,282 Preferred shares 1,812 1,812 Total 33,842 150,094 Outstanding shares Common shares 2,266,217 519,752 Preferred shares 155,915 155,915 Total outstanding shares 2,422,132 675,667 |
Summary of Calculations of Basic and Diluted Loss Per Share | The Company currently has no potential dilutive shares. 2018 2017 2016 Net income (loss) attributable to owners of the Company 27,369,422 (3,736,518 ) (15,502,132 ) Net income (loss) allocated to common shares – basic and diluted 24,525,692 (2,874,290 ) (11,924,904 ) Net income (loss) allocated to preferred shares – basic and diluted 2,843,730 (862,228 ) (3,577,228 ) Weighted average number of outstanding shares (in thousands of shares) Common shares – basic and diluted 1,344,686 519,752 519,752 Preferred shares – basic and diluted 155,915 155,915 155,915 Net income (loss) per share (in Reais): Common shares – basic and diluted 18.24 (5.53 ) (22.94 ) Preferred shares – basic and diluted 18.24 (5.53 ) (22.94 ) |
Summary of Fair Value of Restructured Senior Notes | Fair Value of Restructured Senior Notes New I Common Shares 10,070,116 Delivery of treasury shares 773,072 Subscription Warrants 770,792 11,613,980 |
PROVISION FOR PENSION PLAN (Tab
PROVISION FOR PENSION PLAN (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018. Benefit plans Sponsors Manager TCSPREV Oi, Oi Móvel and BrT Multimídia FATL BrTPREV (*) Oi, Oi Móvel and BrT Multimídia FATL TelemarPrev Oi, TMAR and Oi Móvel FATL PBS-Telemar Telemar FATL PBS-TNCP Oi Móvel FATL CELPREV Oi Móvel FATL PAMEC Oi Oi PBS-A Telemar and Oi Sistel PAMA Oi and Telemar Sistel (*) Plan merged with into TCSPREV on November 30, 2018. Sistel – Fundação Sistel de Seguridade Social FATL – Fundação Atlântico de Seguridade Social |
Summary of of Breakdown Pension Assets and Liabilities | Underfunded status 2018 2017 Financial obligations - BrTPREV plan (i) 574,725 BrTPREV plan 629,120 PAMEC plan 4,397 3,300 Total unfunded status 579,122 632,420 Reclassification to liabilities subject to compromise (Note 29). (560,046 ) Total non-current 579,122 72,374 (i) Represented by the financial obligations agreement, 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 commitment under the terms of the JRP. Overfunded status 2018 2017 TCSPREV plan 364,552 1,329,931 TelemarPrev plan 343,286 317,500 PBS – Telemar plan 50,869 53,041 Total 758,707 1,700,472 Current 4,880 1,080 Non-current 753,827 1,699,392 |
Schedule of Change in Projected Benefit Obligation | Changes in the actuarial obligations, fair value of assets and amounts recognized in the balance sheet 2018 2017 TCSPREV BrTPREV TelemarPrev PBS-Telemar PAMEC TCSPREV BrTPREV TelemarPrev PBS-Telemar PAMEC Projected benefit obligation at the beginning of the year 625,266 2,524,729 3,825,053 307,659 3,300 572,477 2,306,858 3,491,343 286,159 3,276 Service cost 196 74 1,870 41 — 457 102 1,545 33 — Interest cost 78,223 218,104 362,886 29,113 317 64,927 260,650 397,842 32,488 378 Benefits paid (61,605 ) (177,215 ) (272,271 ) (23,441 ) (688 ) (54,979 ) (205,879 ) (263,493 ) (23,158 ) (122 ) Participan’s contributions 2 12 — 34 — — — — 41 — Changes in actuarial assumptions (12,212 ) 60,942 247,746 14,723 1,468 42,384 162,980 197,816 12,096 (232 ) Merger plans 2,626,646 (2,626,646 ) Projected benefit obligation at the end of the year 3,256,516 — 4,165,284 328,129 4,397 625,266 2,524,711 3,825,053 307,659 3,300 2018 2017 TCSPREV BrTPREV TelemarPrev PBS-Telemar PAMEC TCSPREV BrTPREV TelemarPrev PBS-Telemar PAMEC Fair value of plan assets at the beginning of the year 1,953,967 1,895,608 4,142,553 360,700 — 1,845,367 1,806,042 3,853,595 314,203 Actual return on plan assets (187,708 ) 197,994 638,288 41,639 — 163,580 295,413 552,451 69,540 Company’s contributions 2 11 — 66 688 — 15 73 122 Participan’s contributions 2 12 — 34 — — — 41 Benefits paid (61,605 ) (177,215 ) (272,271 ) (23,441 ) (688 ) (54,979 ) (205,879 ) (263,493 ) (23,158 ) (122 ) Merger plans 1,916,410 (1,916,410 ) Fair value of plan assets at the end of the year 3,621,068 — 4,508,570 379,998 — 1,953,967 1,895,591 4,142,553 360,700 2018 2017 TCSPREV BrTPREV TelemarPrev PBS-Telemar PAMEC TCSPREV BrTPREV TelemarPrev PBS-Telemar PAMEC Underfunded (overfunded) status of plan (364,552 ) — (343,286 ) (50,869 ) 4,397 (1,328,701 ) 629,120 (317,500 ) (53,041 ) 3,300 |
Schedule of Net Periodic Defined Beneift Pension Cost | Net periodic defined benefit pension cost for the years ended December 31, 2018, 2017 and 2016 includes the following: 2018 TCSPREV BrTPREV TelemarPrev PBS-Telemar Net service cost 196 74 1,870 41 Interest cost 78,222 218,104 362,887 29,114 Expected return on plan assets (195,301 ) (161,415 ) (394,097 ) (34,332 ) Amortization of net actuarial losses (gains) 32,823 Amortization of prior year service costs (gains) (5,636 ) 1,552 Net periodic pension cost (benefit) (122,519 ) 58,315 3,483 (5,177 ) 2017 TCSPREV BrTPREV TelemarPrev PBS-Telemar Net service cost 457 102 1,545 32 Interest cost 64,927 260,650 397,842 32.488 Expected return on plan assets (220,246 ) (210,579 ) (440,696 ) (35,817 ) Amortization of net actuarial losses (gains) 16,482 Amortization of prior year service costs (gains) (5,636 ) 1,552 Net periodic pension cost (benefit) (160,498 ) 51,724 (24,828 ) (3,297 ) 2016 TCSPREV BrTPREV TelemarPrev PBS-Telemar PAMEC Net service cost 551 138 2,042 24 Interest cost 62,214 249,319 350,701 30,475 330 Expected return on plan assets (193,747 ) (206,407 ) (413,965 ) (34,872 ) Amortization of net actuarial losses (gains) 4,380 Amortization of prior year service costs (gains) (5,636 ) 1,552 Amortization of initial transition obligation (1,051 ) Net periodic pension cost (benefit) (136,618 ) 44,603 (57,894 ) (4,373 ) 330 The net periodic pension cost expected to be recognized in 2019 are as follows: 2019 TCSPREV TelemarPrev PBS-Telemar PAMEC Net service cost 265 1,484 32 Interest cost 287,492 464 370,526 29,117 Expected return on plan assets (271,132 ) (388,996 ) (33,471 ) Amortization of net actuarial losses (gains) 23,466 Amortization of prior year service costs (gains) 46,728 Net periodic pension cost (benefit) 63,353 464 6,480 (4,322 ) |
Summary of Acuarial Assumption | The following actuarial assumptions were used to determine the actuarial present value of the Company’s projected benefit obligation: 2018 BrTPREV TelemarPrev and and TCSPREV PAMEC PBS-Telemar Discount rate for determining projected benefit obligations 9.20 % 9.20 % 9.20 % Expected long-term rate of return on plan assets 9.20 % 9.20 % 9.20 % Annual salary increases By Sponsor By Sponsor By Sponsor Rate of compensation increase 4,00 % 4,00 % 4,00 % Inflation rate assumption used in the above 4,00 % 4,00 % 4,00 % 2017 BrTPREV TelemarPrev and and TCSPREV PAMEC PBS-Telemar Discount rate for determining projected benefit obligations 9.83 % 9.83 % 9.83 % Expected long-term rate of return on plan assets 9.83 % 9.83 % 9.83 % Annual salary increases By Sponsor By Sponsor By Sponsor Rate of compensation increase 4,30 % 4,30 % 4,30 % Inflation rate assumption used in the above 4,30 % 4,30 % 4,30 % |
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 % 17.00 % 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 at December 31, 2018 is as follows: ASSET SEGMENT TCSPREV PBS- Telemar TelemarPrev Fixed income 86.17 % 90.48 % 92.51 % Variable income 2.90 % 1.30 % 1.61 % Equity securities 9.23 % 6.65 % 4.21 % Real estate 0.43 % 0.38 % 0.67 % Investments abroad 0.85 % 0.92 % 0.79 % Loans to participants 0.42 % 0.26 % 0.21 % Total 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 PBS-Telemar TelemarPrev 2019 263,210 23,288 275,663 2020 259,437 24,127 283,101 2021 266,985 24,964 294,351 2022 274,169 25,811 305,905 2023 281,150 26,688 317,588 2024 until 2028 1,501,637 145,953 1,773,564 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Report Information | In preparing the financial information 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, 2018, 2017 and 2016 is as follows: 2018 2017 2016 Residential 8,401,599 9,170,835 9,376,266 Personal mobility 7,250,462 7,644,515 7,848,610 SMEs/Corporate 5,980,807 6,485,898 7,606,598 Other services and businesses 226,985 255,692 332,078 Net operating revenue 21,859,853 23,556,940 25,163,552 Operating expenses Depreciation and amortization (5,881,861 ) (5,803,487 ) (6,128,402 ) Interconnection (653,867 ) (771,212 ) (1,141,786 ) Personnel (2,554,375 ) (2,749,038 ) (2,750,323 ) Third-party services (5,833,570 ) (6,149,189 ) (6,243,623 ) Network maintenance services (1,102,809 ) (1,235,760 ) (1,501,701 ) Handset and other costs (185,436 ) (214,102 ) (252,265 ) Advertising and publicity (379,676 ) (410,495 ) (427,463 ) Rentals and Insurance (4,335,892 ) (4,152,521 ) (4,284,672 ) Provisions/reversals (89,631 ) (143,517 ) (1,056,436 ) Allowance for doubtful accounts (1,062,712 ) (740,575 ) (622,527 ) Impairment losses (225,512 ) Taxes and other expenses (201,296 ) (277,372 ) (399,123 ) Other operating income (expenses), net (17,610 ) (1,234,477 ) (132,211 ) OPERATING INCOME (LOSS) BEFORE FINANCIAL INCOME (EXPENSES) AND TAXES (438,882 ) (324,805 ) (2,492 ) Reorganization items, net 31,580,541 (2,371,919 ) (9,005,998 ) FINANCIAL INCOME (EXPENSES) Financial income 1,042,865 1,331,699 944,611 Financial expenses (5,068,382 ) (2,075,430 ) (4,539,997 ) PRETAX INCOME 27,116,142 (3,440,455 ) (12,603,876 ) Income tax and social contribution 429,495 (1,498,216 ) (87,379 ) INCOME (LOSS) FROM CONTINUING OPERATIONS 27,545,637 (4,938,671 ) (12,691,255 ) |
Reconciliation of Revenue of the segment and Total Consolidated Revenue Information | In the years ended December 31, 2018, 2017 and 2016, the reconciliation of the revenue of the segment Telecommunications in Brazil and total consolidated revenue is as follows: 2018 2017 2016 Net operating revenue Revenue related to the reportable segment 21,859,853 23,556,940 25,163,552 Revenue related to other businesses 200,161 232,714 832,871 Consolidated net operating revenue 22,060,014 23,789,654 25,996,423 |
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, 2018, 2017 and 2016, the reconciliation between the profit (loss) before taxes of the segment telecommunications in Brazil and the consolidated profit (loss) before taxes is as follows: 2018 2017 2016 Profit (loss) before taxes Telecommunications in Brazil 27,116,142 (3,440,455 ) (12,603,876 ) Other businesses (69,444 ) (938,193 ) (830,753 ) Consolidated income before taxes 27,046,698 (4,378,648 ) (13,434,629 ) |
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 at December 31, 2018 and 2017 are as follows: 2018 Total assets Total Property, Intangible Capital Brazil 62,324,414 42,015,131 28,360,030 7,977,841 5,211,774 Other, primarily Africa 4,923,187 526,870 108,768 47,601 34,467 2017 Total assets Total Property, Intangible Capital Brazil 66,311,553 80,316,703 26,934,278 9,206,776 4,258,545 Other, primarily Africa 4,675,216 354,127 149,176 48,063 57,947 |
RELATED-PARTY TRANSACTIONS (Tab
RELATED-PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Transactions with Joint Venture, Associates, and Unconsolidated Entities | Transactions with joint venture, associates, and unconsolidated entities 2018 2017 Accounts receivable and other assets 6,359 5,929 Other entities 6,359 5,929 2018 2017 Accounts payable and other liabilities 74,210 67,654 Hispamar 66,704 62,094 Other entities 7,506 5,560 2018 2017 Revenue Revenue from services rendered 347 119 Other entities 347 119 Financial income 430 Other entities 430 2018 2017 Costs/expenses Operating costs and expenses (236,087 ) (215,079 ) Hispamar (207,271 ) (185,223 ) Other entities (28,816 ) (29,856 ) Financial expenses (167 ) Hispamar (158 ) Other entities (9 ) |
HELD-FOR-SALE ASSETS (Tables)
HELD-FOR-SALE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Assets Held for Sale and Liabilities Associated to Assets Held for Sale | The main components of the assets held sale and liabilities associated to assets held for sale of the African operations are as follows: 2018 2017 Held-for-sale 4,923,187 4,675,216 Cash, cash equivalents and short-term investments 82,639 156,128 Accounts receivable 108,343 123,109 Dividends receivable (i) 2,566,935 2,012,146 Held-for-sale 1,843,778 1,965,972 Other assets 145,709 123,865 Deferred Income Tax 54,540 Investments 19,414 42,217 Property, plant and equipment 108,768 149,176 Intangible assets 47,601 48,063 Liabilities directly associated to assets held for sale 526,871 354,127 Borrowings and financing 188 260 Trade payables 52,064 34,407 Provisions for pension plans 366 Other liabilities 474,619 319,094 Non-controlling 243,490 293,456 Total held for sale assets, net of the corresponding liabilities 4,152,826 4,027,633 (i) This caption refers to the estimated recoverable amount of dividends and correspondent interests receivable from Unitel. As of December 31, 2018 gross amount of unpaid dividends by Unitel to PT Ventures totaled US$821 million and refers to the distribution of accumulated earnings in 2009 and the distribution of profits for fiscal years 2011, 2012, 2013, 2014 and 2017. In order to estimate the present value of the recoverable amount of unpaid dividends the Company takes into account (1) its legal advisors’ opinion regarding the outcome of the law suits filed in a Angolan’s Court and Paris’ ICC to collect this amounts from Unitel, (2) the liquidity position of Unitel as of December 31, 2017, (3) the decision of Unitel to accrue interests on the delayed payments and (4) a weight average cost of capital and an interest rate for accrual of interests; (ii) Refers mainly to the fair value of the indirect interest financial investment of 25% of Unitel’s share capital, classified as held for sale. As at December 31, 2018 the estimated fair value of the investment in Unitel was R$1,760 million (R$1,920 million at December 31, 2017). The fair value of this investment is computed by the Company using a discounted cash-flow methodology, which includes (1) cash flows forecasts for a seven-year period, (2) a 1.5% growth rate to extrapolate the cash flows projections (1.5% in 2017), (3) exchange rate forecasts of Angolan Kwanza and (4) a weight average cost of capital of 17.6% (17.1% in 2017), which was computed based on financial market information and on the assessment of the management regarding the business environment and relationship with the others shareholders and Unitel itself. The Company monitors and periodically updates the main assumptions used in the fair value measurement considering the changes occurred in financial market conditions and the impacts of news events related to the investment, notably the lawsuits filed against Unitel and its shareholders in Angolan Courts and ICC Paris. (iii) Represented mainly by the Samba Luxco’s 14% stake in Africatel and, consequently, in its net assets. In the first quarter of 2017, the transactions provided for in the contractual instruments entered into with Samba Luxco, which reduced its stake in Africatel, while Africatel transferred to Samba Luxco its entire stake in MTC. |
REORGANIZATION ITEMS, NET (Tabl
REORGANIZATION ITEMS, NET (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Reorganizations [Abstract] | |
Summary of Reorganization Items, Net | The Company used the classification “Reorganization items, net” on the consolidated statements of operations to reflect expenses, gains and losses that are the direct result of the reorganization of its business. 2018 2017 2016 Gain on restructuring of Qualified Bonds 12,881,478 Adjustment to present value – Borrowings and financing 13,928,661 Adjustment to present value – Anatel (AGU) and other payables 5,577,234 Anatel provision for contingencies (1,568,798 ) (6,604,718 ) Other provision for contingencies (a) (347,437 ) (1,146,458 ) (2,349,898 ) Income from short-term investments 174,281 713,276 201,533 Professional fees (b) (633,676 ) (369,938 ) (252,915 ) Total reorganization items, net 31,580,541 (2,371,918 ) (9,005,998 ) (a) These amounts are the result of the adjustment to record contingent liabilities to their allowed claim amount which is difference than their carrying amount prior to the JR Proceedings. (b) During the year ended December 31, 2018, 2017 and 2016 the Company incurred in R$634 million, R$370 million and R$253 million related to professional advisors who are assisting with the bankruptcy process, respectively. |
LIABILITIES SUBJECT TO COMPRO_2
LIABILITIES SUBJECT TO COMPROMISE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Text Block [Abstract] | |
Summary of Prepetition Liabilities Subject to Compromise | other events. The following table reflects prepetition liabilities subject to compromise as at December 31, 2018 and 2017: 2018 2017 Borrowings and financing — 49,129,546 Derivative financial instrument — 104,694 Trade payables — 2,139,312 Provision for civil contingencies - Anatel — 9,333,795 Provison fo pension plan — 560,046 Other — 43,334 Provision for labor contingencies — 899,226 Provision for civil - other claims — 2,929,275 Liabilities subject to compromise (*) — 65,139,228 (*) The total amount of prepetition liabilities subjected to compromise differs from the R$63,960,008 amount of the Creditors List prepared by the Company and filed on May 29, 2017. Per ASC 852, prepetition liabilities subject to compromise included the best estimate, as per the criteria set forth in ASC 450, of contingencies/claims subject to compromise and that in accordance with the Brazilian Law were not included in the Creditor’s List. |
Schedule of Accounting Adjustments in Restructured Prepetition Liabilities | The movements in the restructured prepetition liabilities and the accounting adjustments made for initial recognition of the terms and conditions set forth by the approved and ratified JRP, including the effects on the fair value of these liabilities pursuant to the criteria of ASC 820, and applicable GAAP, are as follow: 12/31/2017 Reclassifications Mediations Haircut (i) Equity (ii) Present value Financial 12/31/2018 Liabilities subject to compromise Bondholders 32,314,638 (32,314,638 ) — — — — — — BNDES 3,326,952 (3,326,952 ) — — — — — — Other Borrowings and financing 13,487,957 (13,487,957 ) — — — — — — Derivative financial instrument 104,694 (104,694 ) — — — — — — Trade payables 2,139,312 (2,139,312 ) — — — — — — Provision for civil contingencies - Anatel 9,333,795 (9,333,795 ) — — — — — — Provison for pension plan 560,046 (560,046 ) — — — — — — Other 43,333 (43,333 ) — — — — — — Provision for labor contingencies 899,226 (1,036,172 ) 136,946 — — — — — Provision for civil - other claims 2,929,275 (2,218,538 ) (710,737 ) — — — — — Total - Liabilities subject to compromise 65,139,228 (64,565,437 ) (573,791 ) — — — — — Bondholders — 32,314,638 (161,600 ) (11,054,800 ) (11,613,980 ) (4,807,262 ) 2,035,699 6,712,695 BNDES – Borrowings and financing — 3,326,952 — — — — 289,122 3,616,074 Other Borrowings and financing — 13,592,651 50,375 — — (9,121,399 ) 1,599,510 6,121,137 Anatel (AGU) and other trade payables — 10,588,661 445,077 (1,826,678 ) — (5,577,234 ) 164,784 3,794,610 Provison for labor, civil and Anatel contingencies — 4,182,489 56,975 — — — 149,173 4,388,637 Provison for pension plan — 560,046 — — — — 14,679 574,725 Total - Liabilities not subject to compromise — 64,565,437 390,827 (12,881,478 ) (11,613,980 ) (19,505,895 ) 4,252,967 25,207,878 (i) Represent gains on restructuring of borrowings and financings, trade payables owing to ANATEL-AGU (ii) Represent the fair value of shares issued in partial settlement of the Senior Notes (Note 22). (iii) The financial liabilities have been adjusted to present value according to the criteria of ASC 852 as of the time at which it has reclassified each of the financial liabilities that were legally affected by the JRP from liabilities subject to compromise to borrowings and financings or trade payables. It was calculated taking into consideration the contractual flows provided for in the JRP, discounted using rates that range from 12.6% per year to 16.4% per year, depending on the maturities and currency of each instrument. (iv) Represent the contractual interest and foreign currency fluctuation calculated after completed the financial debt restructuring and other claims restructuring in the terms and conditions provided in the JRP. |
CONDENSED COMBINED AND CONSOL_2
CONDENSED COMBINED AND CONSOLIDATED DEBTOR IN-POSSESSION FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Condensed Combined Consolidated Debtor-In-Possession Financial Information | 12/31/2018 12/31/2017 Current assets Cash and cash equivalents 4,233,558 6,690,900 Short-term investments 201,975 14,605 Trade accounts receivable 7,224,720 6,590,543 Inventories 177,973 137,575 Related parts 431,276 949,851 Recoverable taxes 1,304,991 1,818,242 Judicial Deposits 1,700,428 1,000,519 Pension plan assets 4,824 1,072 Dividends and interest on capital 14,512 529,934 Other assets 1,845,235 1,546,295 Total current assets 17,139,492 19,279,536 Non-current Long-term investments 36,987 114,839 Pension plan assets 23,050 Other taxes 714,653 626,057 Judicial Deposits 6,837,701 8,110,179 Investments 4,335,863 5,852,604 Property, plant and equipment, net 27,965,455 26,561,160 Intangible assets 7,978,956 9,185,107 Pension plan assets 753,827 1,598,792 Other assets 772,363 372,142 Total non-current assets 49,418,855 52,420,878 Total assets 66,558,347 71,700,415 Current liabilities Trade payables 6,108,115 6,697,217 Loans and financing 672,894 530,051 Payroll, related taxes and benefits 504,152 575,673 Current income taxes payable 925,590 1,334,859 Tax financing program 141,897 271,503 Provision for Contingencies 677,229 Dividends and interest on capital 6,168 6,222 Licenses and concessions payable 85,619 20,306 Other payables 956,770 1,146,780 Total current liabilities 10, 078 , 434 10,582,610 Non-Current liabilities Related parts 227,764 1,116,169 Loans and financing 15,785,558 Trade payables 3,736,117 Other taxes 623,917 867,657 Deferred taxes 497,375 Tax financing program 410,500 599,047 Provisions for Contingencies 3,857,871 617,103 Liability for pensions benefits 579,122 10,433 Licenses and concessions payable 604 Unearned revenues 1,531,464 1,596,462 Advances from customers 9,097 9,964 Other payables 766,730 641,253 Total non-current liabilities 27,528,140 5,956,067 Total liabilities not subject to compromise 37,606,574 16,538,677 Liabilities subject to compromise 65,139,227 Total liabilities 37,606,574 81,677,904 Shareholders’ equity (deficit) Total share capital 32,038,471 21,438,374 Share issued costs (377,429 ) (377,429 ) Capital reserves 11,532,995 13,242,374 Treasury shares (2,803,250 ) (5,531,092 ) Other comprehensive income (207,886 ) (241,780 ) Accumulated losses (11,231,129 ) (38,507,937 ) Total shareholders’ equity (deficit) 28,951,773 (9,977,489 ) Total liabilities and shareholders’ equity 66,558,347 71,700,415 Intercompany transactions among the Debtors amounting to R$3.06 billion in 2018 (R$5.64 billion in 2017) related mainly with interests and interconnection charges and have been eliminated in the financial statements presented below. Intercompany transactions among the Debtors and the nonfiling entities have not been eliminated. 12/31/2018 12/31/2017 Net operating revenue 21,036,018 20,429,388 Cost of sales and services (10,998,010 ) (15,573,190 ) Gross profit 10,038,008 4,856,197 Operating (expenses) income Selling expenses (4,834,472 ) (4,077,876 ) General and administrative expenses (2,235,870 ) (2,438,107 ) Other operating income (expenses), net (4,529,992 ) 118,609 Equity pickup 570,975 (138,999 ) Reorganization items, net 31,580,541 (2,371,919 ) Income (l oss ) before financial and taxes 30,589,190 (4,052,094 ) Financial expenses, net (3,949,716 ) (566,679 ) Income (loss) before income taxes 26,639,474 (4,618,772 ) Income tax (current and deferred) 562,205 884,602 Net income ( loss ) for the year 27,201,679 (3,734,170 ) |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Detail) | Jan. 28, 2019BRL (R$)R$ / sharesshares | Jan. 25, 2019BRL (R$)shares | Jan. 25, 2019USD ($)shares | Jan. 21, 2019BRL (R$)R$ / sharesshares | Jan. 11, 2019BRL (R$)R$ / sharesshares | Jan. 04, 2019shares | Jul. 28, 2018USD ($)shares | Jul. 20, 2018BRL (R$)R$ / sharesshares | Aug. 29, 2017BRL (R$)CreditFacility | Feb. 26, 2016BRL (R$) | Jun. 30, 2016BRL (R$) | Dec. 31, 2018BRL (R$)InstallmentR$ / sharesshares | Dec. 31, 2018BRL (R$)sharesInstallmentR$ / shares | Dec. 31, 2018USD ($)sharesInstallment | Dec. 31, 2017BRL (R$)shares | Dec. 31, 2016BRL (R$) | Dec. 31, 2018USD ($)Installmentshares | Oct. 26, 2018BRL (R$)R$ / sharesshares | Jun. 23, 2017BRL (R$) |
General Information Disclosures [Line Items] | |||||||||||||||||||
Common stock issued per share | R$ / shares | R$ 7.00 | R$ 1.24 | |||||||||||||||||
Common stock subscription, share | 68,263 | ||||||||||||||||||
Warrant rights exercised by shareholders | 5,197 | ||||||||||||||||||
Capitalization Of claims | $ 10,600,097,221 | R$ 10600097000 | |||||||||||||||||
Common stock issued | 1,514,299,603 | 1,514,299,603 | 115,913,355 | ||||||||||||||||
Capital authorized | 2,298,247,000 | 2,298,247,000 | 2,298,247,000 | 3,225,806,451 | |||||||||||||||
Capital Increase-New Funds | R$ | R$ 4000000000 | ||||||||||||||||||
Capital increase due to issued shares | R$ | R$ 11613980000 | R$ 4000000000 | |||||||||||||||||
Common shares issues | 2,266,217,000 | 2,266,217,000 | 519,752,000 | 2,266,217,000 | |||||||||||||||
Preferred shares issued | 155,915,000 | 155,915,000 | 155,915,000 | 155,915,000 | |||||||||||||||
Labor claims, description | Labor claims shall be paid in five (5) equal monthly installments, with a 180-day grace period after the Court Ratification of the Plan. Labor claims not yet acknowledged shall be paid in five (5) equal monthly installments, with a six-month grace period after a final, unappealable court on the amount due decision is issued. | Labor claims shall be paid in five (5) equal monthly installments, with a 180-day grace period after the Court Ratification of the Plan. Labor claims not yet acknowledged shall be paid in five (5) equal monthly installments, with a six-month grace period after a final, unappealable court on the amount due decision is issued. | |||||||||||||||||
Pension fund claims, description | Payable in six (6) annual, equal installments, with a five-year grace period as from the Court Ratification of the Plan. | Payable in six (6) annual, equal installments, with a five-year grace period as from the Court Ratification of the Plan. | |||||||||||||||||
Interest/inflation adjustment, description | Interest/inflation adjustment: five-year grace period for interest. National Consumer Price Index (INPC) + 5.5% per year, levied as from the Court Ratification of the Plan, annually accrued during the grace period and payable annually, as from the sixth year, together with the principal installments. | Interest/inflation adjustment: five-year grace period for interest. National Consumer Price Index (INPC) + 5.5% per year, levied as from the Court Ratification of the Plan, annually accrued during the grace period and payable annually, as from the sixth year, together with the principal installments. | |||||||||||||||||
Grace period for principal | 72 months | 72 months | |||||||||||||||||
Grace period on interest | 4 years | 4 years | |||||||||||||||||
Interest rate spread | 2.94637% | 2.94637% | |||||||||||||||||
Linear payment to Unsecured Creditors | R$ | R$ 1000000 | ||||||||||||||||||
Period which linear payment should made | 20 days | 20 days | |||||||||||||||||
Description of linear payment to unsecured creditors | Unsecured Creditors and MEs/EPPs with claims above R$1,000 can elect to receive their claims in a single installment, providing that they agree to receive only R$1,000 as the full payment of their claims an related costs, payable within 20 business days after the end of the period to elect the payment option. | Unsecured Creditors and MEs/EPPs with claims above R$1,000 can elect to receive their claims in a single installment, providing that they agree to receive only R$1,000 as the full payment of their claims an related costs, payable within 20 business days after the end of the period to elect the payment option. | |||||||||||||||||
Grace period for the principal debt | 6 years | 6 years | |||||||||||||||||
Debt instrument interest rate | 6.00% | 6.00% | 6.00% | ||||||||||||||||
Period of commencement of interest accrual | 78 months | 78 months | |||||||||||||||||
Exchange ratios threshold | $ | $ 664,573.98 | ||||||||||||||||||
Maximum claims payment amount | R$ | R$ 150000000 | ||||||||||||||||||
Maximum number of business days for claims payment | 20 days | ||||||||||||||||||
Related party claims principal repayment period starts | 20 years | 20 years | |||||||||||||||||
Number of installments for claims principal repayment | Installment | 5 | 5 | |||||||||||||||||
TR for real-denominated intragroup claims | 0.50% | 0.50% | |||||||||||||||||
Percentage of net revenue from sale of assets transferred to cash sweep | 100.00% | 100.00% | |||||||||||||||||
Threshold amount of net revenue from sale of assets transferred to cash sweep | $ | $ 200,000,000 | ||||||||||||||||||
Percentage of cash balance that exceeds the minimum cash balance | 70.00% | 70.00% | |||||||||||||||||
Threshold percentage of minimum cash balance | 25.00% | 25.00% | |||||||||||||||||
Threshold minimum cash balance | R$ | R$ 5000000000 | R$ 5000000000 | |||||||||||||||||
Impairment loss | R$ | 0 | R$ 46534000 | R$ 225512000 | ||||||||||||||||
Provision for impairment loss | R$ | R$ 1226125000 | (1,226,125,000) | |||||||||||||||||
Impairment Depreciation and amortization | R$ | 291,807,000 | ||||||||||||||||||
Depreciation and amortization | R$ | 150,389,000 | ||||||||||||||||||
Contract agreement cost | R$ | R$ 4493895000 | ||||||||||||||||||
Subsequent Event | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Common stock subscription, share | 1,604,268,162 | 1,604,268,162 | 1,604,268,162 | ||||||||||||||||
Common stock issued | 3,225,806,451 | 3,225,806,451 | 3,225,806,451 | 91,322,933 | 1,530,457,356 | 275,985 | |||||||||||||
Issue shares price | R$ / shares | R$ 1.24 | R$ 1.24 | |||||||||||||||||
Proceeds from issuance of common shares | R$ | R$ 4000000000.00 | R$ 4000000000.00 | R$ 113000000 | R$ 1897767121.44 | |||||||||||||||
Excess new common shares distribution | 91,322,933 | ||||||||||||||||||
Compensation for commitments under the Commitment Agreement | $ | $ 13,000,000 | ||||||||||||||||||
Subsequent Event | Commitment Agreement [Member] | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Common stock subscription, share | 1,604,268,162 | ||||||||||||||||||
Contributed Capital to Committed Capital Ratio | 84.40% | ||||||||||||||||||
Commitment shares issue | 272,148,705 | ||||||||||||||||||
Increase in paid-in capital | R$ | 32,538,937,370 | ||||||||||||||||||
Capital increase due to issued shares | R$ | 32,038,471,375 | ||||||||||||||||||
Additional paid in capital | R$ | R$ 500465995 | ||||||||||||||||||
Shares issued | 5,954,205,001 | ||||||||||||||||||
Common shares issues | 5,796,477,760 | ||||||||||||||||||
Preferred shares issued | 157,727,241 | ||||||||||||||||||
American Depositary Share [Member] | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Warrant exercised | 22,798,378 | 22,798,378 | 22,798,378 | ||||||||||||||||
American Depositary Share [Member] | Subsequent Event | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Common stock issued | 49,156,560 | 856,519,080 | |||||||||||||||||
Warrant exercised | 55,197 | ||||||||||||||||||
American Depositary Share [Member] | Subsequent Event | Commitment Agreement [Member] | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Issue shares price | R$ / shares | R$ 1.24 | ||||||||||||||||||
Holders of Common Shares and Preferred Shares | Subsequent Event | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Common stock issued | 673,938,276 | ||||||||||||||||||
Private Placement | Subsequent Event | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Common stock issued | 272,148,705 | 272,148,705 | |||||||||||||||||
Compensation for commitments under the Commitment Agreement | $ | $ 13,000,000 | ||||||||||||||||||
Shares | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Commitment fee, percentage | 10.00% | 10.00% | 10.00% | ||||||||||||||||
BRAZIL | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Impairment loss | R$ | R$ 1234000000 | R$ 227000000 | |||||||||||||||||
Creditors Settlement Program | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Prepayment of claim amount | R$ | R$ 50000000 | ||||||||||||||||||
Prepayment of claim amount percentage if OI creditors accepts | 90.00% | ||||||||||||||||||
Prepayment of claim amount remaining percentage | 10.00% | ||||||||||||||||||
Number of creditors joined | CreditFacility | 35,000 | ||||||||||||||||||
Payment for settlement | R$ | R$ 360000000 | ||||||||||||||||||
Creditors Settlement Program | BRAZIL | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Number of creditors joined | CreditFacility | 30,000 | ||||||||||||||||||
Creditors Settlement Program | PORTUGAL | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Number of creditors joined | CreditFacility | 5,000 | ||||||||||||||||||
National Telecommunications Agency | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Lawsuits value | R$ | R$ 14500000000 | ||||||||||||||||||
First Installment | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Payment of nontax pre-petition claims percentage | 0.16% | 0.16% | |||||||||||||||||
Second Installment | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Payment of nontax pre-petition claims percentage | 0.33% | 0.33% | |||||||||||||||||
Third Installment | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Payment of nontax pre-petition claims percentage | 0.50% | 0.50% | |||||||||||||||||
Fourth Installment | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Payment of nontax pre-petition claims percentage | 0.66% | 0.66% | |||||||||||||||||
US dollar | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Commitment fee, percentage | 8.00% | 8.00% | 8.00% | ||||||||||||||||
Interest | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Discounts applied | 50.00% | 50.00% | |||||||||||||||||
Principal | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Discounts applied | 50.00% | 50.00% | |||||||||||||||||
PTIF | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Common shares issues | 9,137 | 9,137 | 9,137 | ||||||||||||||||
Notes issued | $ | $ 145,262 | ||||||||||||||||||
Notes face value | $ | $ 130,000 | ||||||||||||||||||
Notes issued, premium | $ | $ 15,262 | ||||||||||||||||||
Number of shares issued | 825,760,902 | 825,760,902 | |||||||||||||||||
Insurance Claims | Unqualified Bonds | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Principal as percentage of unqualified bondholders' claims | 50.00% | 50.00% | |||||||||||||||||
Number of semiannual successive installments | Installment | 12 | 12 | 12 | ||||||||||||||||
Debt Instrument Frequency Of Periodic Payment | Semiannual | Semiannual | |||||||||||||||||
Restructuring Option One | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Grace period for principal | 60 months | 60 months | |||||||||||||||||
Repayment to unsecured creditors | R$ 10000000000 | $ 1,150,000,000 | |||||||||||||||||
Number of semiannual installments | Installment | 24 | 24 | 24 | ||||||||||||||||
Restructuring Option One | Brazilian reais | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Principal as percentage of unqualified bondholders' claims | 80.00% | 80.00% | |||||||||||||||||
Restructuring Option One | US dollar | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Principal as percentage of unqualified bondholders' claims | 1.75% | 1.75% | |||||||||||||||||
Restructuring Option Two | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Grace period for principal | 60 months | 60 months | |||||||||||||||||
Repayment to unsecured creditors | $ | $ 850,000,000 | ||||||||||||||||||
Number of semiannual installments | Installment | 24 | 24 | 24 | ||||||||||||||||
Principal as percentage of unqualified bondholders' claims | 1.25% | 1.25% | |||||||||||||||||
Restructuring Option Two | Semiannual Payment at Grace Period | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Principal as percentage of unqualified bondholders' claims | 10.00% | 10.00% | |||||||||||||||||
Restructuring Option Two | Annual Payment at Grace Period | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Principal as percentage of unqualified bondholders' claims | 90.00% | 90.00% | |||||||||||||||||
Restructuring Option Two | Semiannual Payment After Grace Period | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Principal as percentage of unqualified bondholders' claims | 100.00% | 100.00% | |||||||||||||||||
Subscription Warrants | PTIF | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Warrants issued | 9,155 | 9,155 | |||||||||||||||||
New I Common Shares | PTIF | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Common shares issues | 119,017 | 119,017 | 119,017 | ||||||||||||||||
New I Common Shares | Subscription Warrants | PTIF | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Warrants issued | 135,081,089 | 135,081,089 | |||||||||||||||||
Maximum | Insurance Claims | Unqualified Bonds | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Policyholders' benefits | $ | $ 500,000,000 | ||||||||||||||||||
Principal repayment cap | $ | 250,000,000 | ||||||||||||||||||
Maximum | Insurance Claims | Unqualified Bonds | Bond Holders | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Policyholders' benefits | $ | 750,000 | ||||||||||||||||||
Maximum | New I Common Shares | PTIF | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Issue shares price | R$ / shares | R$ 7 | R$ 7 | |||||||||||||||||
Proceeds from issuance of common shares | R$ | R$ 12292379141 | ||||||||||||||||||
Common shares issues | 1,756,054,163 | 1,756,054,163 | 1,756,054,163 | ||||||||||||||||
Minimum | Bond Holders | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Threshold for offer | $ | $ 750,000 | ||||||||||||||||||
Minimum | New I Common Shares | PTIF | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Issue shares price | R$ / shares | R$ 6.70 | R$ 6.70 | |||||||||||||||||
Proceeds from issuance of common shares | R$ | R$ 11765562892.1 | ||||||||||||||||||
RJ Debtors | Maximum | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Net debt-to-EBITDA ratio | 2.00% | 2.00% | |||||||||||||||||
Notes Payable | PTIF | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Notes face value | $ | $ 1,000 | ||||||||||||||||||
Maturity term | 7 years | 7 years | |||||||||||||||||
Principal repayments period | 84 years | 84 years | |||||||||||||||||
Interest payment description | 10% per year, paid semiannually; or During the first three (3) years as from the plan’s ratification, 12% interest paid semiannually, of which 8% of the annual interest paid is in cash semiannually and 4% compounded semiannually and paid in the 36thmonth after the issue date of the New Notes, and beginning in the 4th year when annual 10% interest in being charged, paid semiannually. | 10% per year, paid semiannually; or During the first three (3) years as from the plan’s ratification, 12% interest paid semiannually, of which 8% of the annual interest paid is in cash semiannually and 4% compounded semiannually and paid in the 36thmonth after the issue date of the New Notes, and beginning in the 4th year when annual 10% interest in being charged, paid semiannually. | |||||||||||||||||
Notes Payable | Maximum | PTIF | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Note par value | R$ 6300000000 | R$ 6300000000 | $ 1,918,100,167 | ||||||||||||||||
General Payment Method | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Grace period for principal | 20 years | 20 years | |||||||||||||||||
Principal as percentage of unqualified bondholders' claims | 15.00% | 15.00% | |||||||||||||||||
Number of annual repayment installments | Installment | 5 | 5 | |||||||||||||||||
Maximum claims payment amount | R$ | R$ 150000000 | ||||||||||||||||||
Maximum number of business days for claims payment | 20 days | 20 days | |||||||||||||||||
Percentage of discount for claims | 10.00% | 10.00% | |||||||||||||||||
Claims payment description | If these suppliers have claims in excess of R$150,000, they shall receive the outstanding amount minus a 10% discount in four (4) equal annual, successive installments, plus (i) TR + 0.5% in the case of real-denominated claims and (ii) 0.5% per year in the case of US dollar- or euro-denominated claims. | If these suppliers have claims in excess of R$150,000, they shall receive the outstanding amount minus a 10% discount in four (4) equal annual, successive installments, plus (i) TR + 0.5% in the case of real-denominated claims and (ii) 0.5% per year in the case of US dollar- or euro-denominated claims. | |||||||||||||||||
General Payment Method | Maximum | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Payment amount | R$ | R$ 70000000000 | ||||||||||||||||||
Judicial Reorganization Plan | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Qualified bondholder credits, Description | Under the JRP, the Qualified Recovery with respect to each US$1,000 of Qualified Bondholder Credits consisted of approximately,US$195.61 aggregate principal amount of New Notes;38.57 Common ADSs representing 192.83 Common Shares for a total of 1,514,299,603 shares valued at $10,600,097,221 in partial settlement of the bonds; 2.75 ADWs; and US$0.01 in cash. | Under the JRP, the Qualified Recovery with respect to each US$1,000 of Qualified Bondholder Credits consisted of approximately,US$195.61 aggregate principal amount of New Notes;38.57 Common ADSs representing 192.83 Common Shares for a total of 1,514,299,603 shares valued at $10,600,097,221 in partial settlement of the bonds; 2.75 ADWs; and US$0.01 in cash. | |||||||||||||||||
Judicial Reorganization Plan | New II Common Shares | |||||||||||||||||||
General Information Disclosures [Line Items] | |||||||||||||||||||
Common stock, value, outstanding | R$ | R$ 3000000000 | R$ 3000000000 |
Summary of Principal to be Repa
Summary of Principal to be Repaid per Month (Detail) | 12 Months Ended |
Dec. 31, 2018 | |
0 a 72nd | |
Percentage Of Principal Amount To Be Repaid [Line Items] | |
Percentage of the amount to be repaid per month | 0.00% |
73rd to 132nd | |
Percentage Of Principal Amount To Be Repaid [Line Items] | |
Percentage of the amount to be repaid per month | 0.33% |
133rd to 179th | |
Percentage Of Principal Amount To Be Repaid [Line Items] | |
Percentage of the amount to be repaid per month | 1.67% |
180th | |
Percentage Of Principal Amount To Be Repaid [Line Items] | |
Percentage of the amount to be repaid per month | 1.71% |
Summary of Discounted Percentag
Summary of Discounted Percentage on Payment of Unsecured Creditors (Detail) | 12 Months Ended |
Dec. 31, 2018 | |
Up to R$1,000.00 | |
Discounted Percentage On Payment Of Unsecured Creditors [Line Items] | |
Discount % | 0.00% |
R$1,000.01 to R$5,000.00 | |
Discounted Percentage On Payment Of Unsecured Creditors [Line Items] | |
Discount % | 15.00% |
R$5,000.01 to R$10,000.00 | |
Discounted Percentage On Payment Of Unsecured Creditors [Line Items] | |
Discount % | 20.00% |
R$10,000.01 to R$150,000.00 | |
Discounted Percentage On Payment Of Unsecured Creditors [Line Items] | |
Discount % | 30.00% |
Over R$150,000.00 | |
Discounted Percentage On Payment Of Unsecured Creditors [Line Items] | |
Discount % | 50.00% |
Schedule of Principal Repayment
Schedule of Principal Repayment Percentage per Six-month Period (Detail) | 12 Months Ended |
Dec. 31, 2018 | |
Restructuring Option Three | 0 to 12th | Unqualified Bonds | |
Schedule of Principal Repayment Percentage [Line Items] | |
Percentage of the amount to be repaid per six-month period | 0.00% |
Restructuring Option Three | 13th to 18th | Unqualified Bonds | |
Schedule of Principal Repayment Percentage [Line Items] | |
Percentage of the amount to be repaid per six-month period | 4.00% |
Restructuring Option Three | 19th to 23rd | Unqualified Bonds | |
Schedule of Principal Repayment Percentage [Line Items] | |
Percentage of the amount to be repaid per six-month period | 12.66% |
Restructuring Option Three | 24th | Unqualified Bonds | |
Schedule of Principal Repayment Percentage [Line Items] | |
Percentage of the amount to be repaid per six-month period | 12.70% |
Restructuring Option One | 0 to 10th | |
Schedule of Principal Repayment Percentage [Line Items] | |
Percentage of the amount to be repaid per six-month period | 0.00% |
Restructuring Option One | 11th to 20th | |
Schedule of Principal Repayment Percentage [Line Items] | |
Percentage of the amount to be repaid per six-month period | 2.00% |
Restructuring Option One | 21st to 33rd | |
Schedule of Principal Repayment Percentage [Line Items] | |
Percentage of the amount to be repaid per six-month period | 5.70% |
Restructuring Option One | 34th | |
Schedule of Principal Repayment Percentage [Line Items] | |
Percentage of the amount to be repaid per six-month period | 5.90% |
Restructuring Option Two | 0 to 10th | |
Schedule of Principal Repayment Percentage [Line Items] | |
Percentage of the amount to be repaid per six-month period | 0.00% |
Restructuring Option Two | 11th to 20th | |
Schedule of Principal Repayment Percentage [Line Items] | |
Percentage of the amount to be repaid per six-month period | 2.00% |
Restructuring Option Two | 21st to 33rd | |
Schedule of Principal Repayment Percentage [Line Items] | |
Percentage of the amount to be repaid per six-month period | 5.70% |
Restructuring Option Two | 34th | |
Schedule of Principal Repayment Percentage [Line Items] | |
Percentage of the amount to be repaid per six-month period | 5.90% |
Schedule of Differences Between
Schedule of Differences Between Accounting Policies and Practices Adopted In IFRS (Detail) - BRL (R$) R$ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Equity under U.S.GAAP | R$ 29199496 | R$ 9684061 | R$ 5349294 | R$ 11017306 |
Impairment of long-lived assets | (1,226,125) | |||
Business combinations prior to January 1, 2009 | 44,981 | |||
Pension plans and other post-retirement benefits | (689,574) | |||
Capitalization of interest, net of amortization | 60,928 | |||
Provision for onerous contracts | (4,493,895) | |||
Equity under IFRS | 22,895,811 | |||
Net income under U.S.GAAP | 27,393,837 | R$ 4027661 | R$ 15679742 | |
Impairment of long-lived assets | (141,418) | |||
Business combinations prior to January 1, 2009 | 4,122 | |||
Pension plans and other post-retirement benefits | (115,080) | |||
Capitalization of interest, net of amortization | (1,780) | |||
Provision for onerous contracts | (4,493,895) | |||
Settlement of judicial reorganization | (1,331,016) | |||
Deferred income tax | 3,300,785 | |||
Net income under IFRS | R$ 24615555 |
Schedule of Judicial Reorganiza
Schedule of Judicial Reorganization Adjustments to Net Income (Detail) R$ in Thousands | 12 Months Ended |
Dec. 31, 2018BRL (R$) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Settlement for lesser amounts of prepetition obligations and present value recognition under U.S. GAAP | R$ 6527238 |
Gain on reversal of interest and foreign currency on loans and financings under IFRS | 5,196,222 |
Settlement of judicial reorganization | R$ 1331016 |
Significant Accounting Polici_4
Significant Accounting Policies - Additional Information (Detail) $ in Billions | Jan. 28, 2019BRL (R$)shares | Jan. 25, 2019BRL (R$)shares | Jan. 21, 2019BRL (R$)shares | Jan. 11, 2019BRL (R$)shares | Jan. 04, 2019shares | Jul. 28, 2018shares | Jul. 20, 2018shares | Dec. 31, 2018BRL (R$)shares | Jan. 01, 2019USD ($) | Jan. 01, 2018BRL (R$) | Dec. 31, 2017BRL (R$) |
Significant Accounting Policies [Line Items] | |||||||||||
Number of common stock issued | shares | 1,514,299,603 | 1,514,299,603 | 115,913,355 | ||||||||
Unrecognized tax benefits | R$ 0 | R$ 0 | |||||||||
Interest and penalties | 0 | 0 | |||||||||
Deferred revenue | 1,916,570,000 | 1,772,828,000 | |||||||||
Prepaid expenses | R$ 743953000 | R$ 793000000 | R$ 307162000 | ||||||||
Subsequent Event | |||||||||||
Significant Accounting Policies [Line Items] | |||||||||||
Number of common stock issued | shares | 3,225,806,451 | 3,225,806,451 | 91,322,933 | 1,530,457,356 | 275,985 | ||||||
Aggreagate subscription amount | R$ 4000000000.00 | R$ 4000000000.00 | R$ 113000000 | R$ 1897767121.44 | |||||||
Adoption of ASC 606 | |||||||||||
Significant Accounting Policies [Line Items] | |||||||||||
Deferred revenue | R$ 138000000 | ||||||||||
Adoption of ASC 842 | Subsequent Event | Minimum | |||||||||||
Significant Accounting Policies [Line Items] | |||||||||||
New accounting standard effect on net assets | $ | $ 6.9 | ||||||||||
Adoption of ASC 842 | Subsequent Event | Maximum | |||||||||||
Significant Accounting Policies [Line Items] | |||||||||||
New accounting standard effect on net assets | $ | $ 8.7 |
Schedule of Equity Interest Hel
Schedule of Equity Interest Held in Capital of Company's Subsidiaries - Companies Related to Continuing Operations (Detail) - Continuing Operations | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Oi Holanda | ||
Core business | Raising funds in the international market | |
Home country | The Netherlands | |
Direct | 100.00% | 100.00% |
Portugal Telecom International Finance B.V | ||
Core business | Raising funds in the international market | |
Home country | The Netherlands | |
Direct | 100.00% | 100.00% |
CVTEL, BV | ||
Core business | Investment management | |
Home country | The Netherlands | |
Direct | 100.00% | 100.00% |
Carrigans Finance S.a.r.l. | ||
Core business | Investment management | |
Home country | Luxembourg | |
Direct | 100.00% | 100.00% |
Copart 5 | ||
Core business | Property investments | |
Home country | Brazil | |
Direct | 100.00% | 100.00% |
Rio Alto | ||
Core business | Receivables portfolio management and interests in other entities | |
Home country | Brazil | |
Direct | 100.00% | 100.00% |
Oi Servicos Financeiros | ||
Core business | Financial services | |
Home country | Brazil | |
Direct | 99.87% | 99.87% |
Indirect | 0.13% | 0.13% |
Bryophyta SP Participacoes Ltda. | ||
Core business | Property investments | |
Home country | Brazil | |
Direct | 99.80% | 99.80% |
Indirect | 0.20% | 0.20% |
Telemar | ||
Core business | Fixed telephony - Region I | |
Home country | Brazil | |
Direct | 100.00% | 100.00% |
Oi Movel | ||
Core business | Mobile telephony - Regions I, II, and III | |
Home country | Brazil | |
Indirect | 100.00% | 100.00% |
Paggo Empreendimentos S.A. | ||
Core business | Payment and credit systems | |
Home country | Brazil | |
Indirect | 100.00% | 100.00% |
Paggo Acquirer Gestao de Meios de Pagamentos Ltda. | ||
Core business | Payment and credit systems | |
Home country | Brazil | |
Indirect | 100.00% | 100.00% |
Paggo Administradora | ||
Core business | Payment and credit systems | |
Home country | Brazil | |
Indirect | 100.00% | 100.00% |
Serede | ||
Core business | Network services | |
Home country | Brazil | |
Direct | 17.51% | 18.57% |
Indirect | 82.49% | 81.43% |
BrT Multimidia | ||
Core business | Data traffic | |
Home country | Brazil | |
Indirect | 100.00% | 100.00% |
Copart 4 | ||
Core business | Property investments | |
Home country | Brazil | |
Indirect | 100.00% | 100.00% |
Dommo Empreendimentos Imobiliarios Ltda. | ||
Core business | Purchase and sale of real estate | |
Home country | Brazil | |
Indirect | 100.00% | 100.00% |
BrT Call Center | ||
Core business | Call center and telemarketing services | |
Home country | Brazil | |
Indirect | 100.00% | 100.00% |
BrT Card | ||
Core business | Financial services | |
Home country | Brazil | |
Indirect | 100.00% | 100.00% |
Pointer | ||
Core business | Wi-Fi internet | |
Home country | Brazil | |
Indirect | 100.00% | 100.00% |
Pointer Peru S.A.C | ||
Core business | Wi-Fi internet | |
Home country | Peru | |
Indirect | 100.00% | 100.00% |
VEX Venezuela C.A | ||
Core business | Wi-Fi internet | |
Home country | Venezuela | |
Indirect | 100.00% | 100.00% |
VEX USA Inc. | ||
Core business | Wi-Fi internet | |
Home country | United States of America | |
Indirect | 100.00% | 100.00% |
VEX Ukraine LLC | ||
Core business | Wi-Fi internet | |
Home country | Ukraine | |
Indirect | 40.00% | 40.00% |
Schedule of Equity Interest H_2
Schedule of Equity Interest Held in Capital of Company's Subsidiaries - Companies Classified as Assets Held for Sale (Detail) - Asset Held For Sale | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
PT Participacoes, SGPS, S.A. (''PT Participacoes") | ||
Core business | Management of equity investments | |
Home country | Portugal | |
Direct | 100.00% | 100.00% |
Oi Investimentos | ||
Core business | Business consulting and management services, preparation of projects and economic studies, and investment management | |
Home country | Portugal | |
Indirect | 100.00% | 100.00% |
Africatel GmbH & Co.KG. | ||
Core business | Investment management | |
Home country | Germany | |
Indirect | 100.00% | 100.00% |
Africatel GmbH | ||
Core business | Investment management | |
Home country | Germany | |
Indirect | 100.00% | 100.00% |
Africatel Holdings, BV | ||
Core business | Investment management | |
Home country | The Netherlands | |
Indirect | 86.00% | 86.00% |
PT Ventures, SGPS, S.A. | ||
Core business | Management of equity interests in the context of international investments | |
Home country | Portugal | |
Indirect | 86.00% | 86.00% |
Directel | ||
Core business | Telephone directory publishing and operation of related databases, in international operations | |
Home country | Portugal | |
Indirect | 86.00% | 86.00% |
TPT - Telecomunicacoes Publicas de Timor, S.A. ("TPT") | ||
Core business | Provision of telecommunications, multimedia and IT services, and purchase and sale of related products in Timor | |
Home country | Portugal | |
Indirect | 76.14% | 76.14% |
Directel Cabo Verde - Servicos de Comunicacao, Lda. | ||
Core business | Telephone directory publishing and operation of related databases in Cape Verde | |
Home country | Cape Verde | |
Indirect | 51.60% | 51.60% |
Kenya Postel Directories, Ltd. | ||
Core business | Production, publishing and distribution of telephone directories and other publications | |
Home country | Kenya | |
Indirect | 51.60% | 51.60% |
Elta - Empresa de Listas Telefonicas de Angola, Lda. | ||
Core business | Telephone directory publishing | |
Home country | Angola | |
Indirect | 47.30% | 47.30% |
Timor Telecom, S.A. | ||
Core business | Telecommunications services concessionaire in Timor | |
Home country | Timor | |
Indirect | 44.00% | 44.00% |
CST - Companhia Santomense de Telecomunicacoes, S.A.R.L. | ||
Core business | Operation of fixed and mobile telecommunication public services in Sao Tomé and Principe | |
Home country | Sao Tomé | |
Indirect | 43.86% | 43.86% |
LTM - Listas Telefonicas de Mocambique, Lda. | ||
Core business | Management, publishing, operation and sale of telecommunications subscriber and classified ads directories | |
Home country | Mozambique | |
Indirect | 43.00% | 43.00% |
Schedule of Equity Interests In
Schedule of Equity Interests In Joint Arrangements And Interests In Associates (Detail) - Joint Arrangements and Interests in Associates | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
AIX | ||
Core business | Data traffic | |
Home country | Brazil | |
Direct | 0.00% | 0.00% |
Indirect | 50.00% | 50.00% |
Paggo Solucoes | ||
Core business | Financial company | |
Home country | Brazil | |
Direct | 0.00% | 0.00% |
Indirect | 50.00% | 50.00% |
Gamecorp | ||
Core business | Pay TV service, except programmers | |
Home country | Brazil | |
Direct | 0.00% | 0.00% |
Indirect | 29.90% | 29.90% |
Hispamar | ||
Core business | Satellite operation | |
Home country | Brazil | |
Direct | 0.00% | 0.00% |
Indirect | 19.04% | 19.04% |
Foreign Exchange Rates (Detail)
Foreign Exchange Rates (Detail) | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Closing [Member] | Euro | |||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | |||
Foreign exchange rates | 4.4390 | 3.9693 | 3.4384 |
Closing [Member] | US dollar | |||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | |||
Foreign exchange rates | 3.8748 | 3.3080 | 3.2591 |
Closing [Member] | Cape Verde, Escudos | |||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | |||
Foreign exchange rates | 0.0403 | 0.0360 | 0.0313 |
Closing [Member] | Sao Tome and Principe, Dobras | |||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | |||
Foreign exchange rates | 0.000185 | 0.000162 | 0.000140 |
Closing [Member] | Kenya, Shillings | |||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | |||
Foreign exchange rates | 0.0381 | 0.0321 | 0.0318 |
Closing [Member] | Namibia, Dollars | |||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | |||
Foreign exchange rates | 0.2698 | 0.2687 | 0.2325 |
Closing [Member] | Mozambique, Meticais | |||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | |||
Foreign exchange rates | 0.0627 | 0.0565 | 0.0450 |
Closing [Member] | Angola, Kwanza | |||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | |||
Foreign exchange rates | 0.0126 | 0.0200 | 0.0197 |
Average Rates [Member] | Euro | |||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | |||
Foreign exchange rates | 4.3094 | 3.6089 | 3.8543 |
Average Rates [Member] | US dollar | |||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | |||
Foreign exchange rates | 3.6558 | 3.1925 | 3.4833 |
Average Rates [Member] | Cape Verde, Escudos | |||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | |||
Foreign exchange rates | 0.0391 | 0.0327 | 0.0352 |
Average Rates [Member] | Sao Tome and Principe, Dobras | |||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | |||
Foreign exchange rates | 0.000177 | 0.000149 | 0.000160 |
Average Rates [Member] | Kenya, Shillings | |||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | |||
Foreign exchange rates | 0.0361 | 0.0309 | 0.0343 |
Average Rates [Member] | Namibia, Dollars | |||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | |||
Foreign exchange rates | 0.2764 | 0.2401 | 0.2369 |
Average Rates [Member] | Mozambique, Meticais | |||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | |||
Foreign exchange rates | 0.0601 | 0.0499 | 0.0579 |
Average Rates [Member] | Angola, Kwanza | |||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | |||
Foreign exchange rates | 0.0147 | 0.0193 | 0.0214 |
Summary of Reconciliation of St
Summary of Reconciliation of Statement of Operations (Detail) - BRL (R$) R$ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Net operating revenue | R$ 22060014 | R$ 23789654 | R$ 25996423 | |
Cost of sales and/or services | (15,822,732) | (15,676,216) | (16,741,791) | |
Gross profit | 6,237,282 | 8,113,438 | 9,254,632 | |
Operating income (expenses) | ||||
Selling expenses | (4,478,352) | (4,399,936) | (4,383,163) | |
General and administrative expenses | (2,697,865) | (3,064,252) | (3,687,706) | |
Other operating income (expenses), net | 417,159 | (1,043,922) | (1,237,085) | |
Reorganization items, net | 31,580,541 | (2,371,918) | (9,005,998) | |
Income (loss) before financial and taxes | 31,058,765 | (2,766,590) | (9,059,320) | |
Financial expenses, net | (4,012,067) | (1,612,058) | (4,375,309) | |
Income (loss) before income taxes | [1] | 27,046,698 | (4,378,648) | (13,434,629) |
Income tax (current and deferred) | 347,139 | 350,987 | (2,245,113) | |
Net income (loss) for the year | 27,393,837 | R$ 4027661 | R$ 15679742 | |
Scenario, Previously Reported | ||||
Net operating revenue | 22,075,602 | |||
Cost of sales and/or services | (15,822,732) | |||
Gross profit | 6,252,870 | |||
Operating income (expenses) | ||||
Selling expenses | (4,597,566) | |||
General and administrative expenses | (2,697,865) | |||
Other operating income (expenses), net | 417,159 | |||
Reorganization items, net | 31,580,541 | |||
Income (loss) before financial and taxes | 30,955,139 | |||
Financial expenses, net | (4,012,067) | |||
Income (loss) before income taxes | 26,943,072 | |||
Income tax (current and deferred) | 382,372 | |||
Net income (loss) for the year | 27,325,444 | |||
Restatement Adjustment | ||||
Net operating revenue | 15,588 | |||
Gross profit | 15,588 | |||
Operating income (expenses) | ||||
Selling expenses | (119,214) | |||
Income (loss) before financial and taxes | (103,626) | |||
Income (loss) before income taxes | (103,626) | |||
Income tax (current and deferred) | 35,233 | |||
Net income (loss) for the year | R$ 68393 | |||
[1] | At December 31, 2018, 2017 and 2016 income (loss) before income taxes and income tax (expense) benefit for continuing operations is as follows: |
Financial Assets and Financial
Financial Assets and Financial Liabilities Carried At Fair Value Excluding Liabilities Subjected to Compromise (Detail) - BRL (R$) R$ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Assets, Carrying amount | ||
Cash equivalents | R$ 4097838 | R$ 6585184 |
Short-term investments | 238,962 | 136,286 |
Liabilities, Carrying amount | ||
Trade payables | 8,818,870 | 5,170,970 |
Tax refinancing program | 553,206 | 888,777 |
Fair Value | ||
Assets, Carrying amount | ||
Available-for-sale financial asset | 1,843,778 | 1,965,972 |
Assets, Fair value | ||
Cash and banks | 287,491 | 277,500 |
Cash equivalents | 4,097,838 | 6,585,184 |
Short-term investments | 238,962 | 136,286 |
Accounts receivable | 6,516,555 | 7,367,442 |
Available-for-sale financial asset | 1,843,778 | 1,965,972 |
Dividends receivable | 2,566,935 | 2,012,146 |
Liabilities, Carrying amount | ||
Public debentures | 3,103,106 | |
Liabilities, Fair value | ||
Trade payables | 8,818,870 | 5,170,970 |
Borrowings and financing | 7,140,960 | 54,251 |
Public debentures | 3,103,106 | |
Senior notes | 6,937,764 | |
Dividends and interest on capital | 6,168 | 6,222 |
Licenses and concessions payable | 85,619 | 20,910 |
Tax refinancing program | 553,206 | 888,777 |
Carrying amount | ||
Assets, Carrying amount | ||
Cash and banks | 287,491 | 277,500 |
Cash equivalents | 4,097,838 | 6,585,184 |
Short-term investments | 238,962 | 136,286 |
Accounts receivable | 6,516,555 | 7,367,442 |
Available-for-sale financial asset | 1,843,778 | 1,965,972 |
Dividends receivable | 2,566,935 | 2,012,146 |
Assets, Fair value | ||
Available-for-sale financial asset | 1,843,778 | 1,965,972 |
Liabilities, Carrying amount | ||
Trade payables | 8,818,870 | 5,170,970 |
Borrowings and financing | 7,140,960 | 54,251 |
Public debentures | 3,103,106 | |
Senior notes | 6,205,840 | |
Dividends and interest on capital | 6,168 | 6,222 |
Licenses and concessions payable | 85,619 | 20,910 |
Tax refinancing program | 553,206 | R$ 888777 |
Liabilities, Fair value | ||
Public debentures | R$ 3103106 | |
Cash and Due from Banks | ||
Fair Value Disclosures | ||
Accounting measurement | Fair value | |
Cash and Cash Equivalents | ||
Fair Value Disclosures | ||
Accounting measurement | Fair value | |
Short-term Investments | ||
Fair Value Disclosures | ||
Accounting measurement | Fair value | |
Accounts Receivable | ||
Fair Value Disclosures | ||
Accounting measurement | Amortized cost | |
Available-for-sale Securities | ||
Fair Value Disclosures | ||
Accounting measurement | Fair value | |
Dividend Received | ||
Fair Value Disclosures | ||
Accounting measurement | Amortized cost | |
Accounts Payable | ||
Fair Value Disclosures | ||
Accounting measurement | Amortized cost | |
Borrowings | ||
Fair Value Disclosures | ||
Accounting measurement | Amortized cost | |
Dividends and Interest on Capital Payable | ||
Fair Value Disclosures | ||
Accounting measurement | Amortized cost | |
Licenses and Concessions Payable | ||
Fair Value Disclosures | ||
Accounting measurement | Amortized cost | |
Tax Refinancing Program Liabilities | ||
Fair Value Disclosures | ||
Accounting measurement | Amortized cost |
Financial Assets and Financia_2
Financial Assets and Financial Liabilities Carried At Fair Value Excluding Liabilities Subjected to Compromise (Parenthetical) (Detail) R$ in Thousands | Feb. 26, 2016BRL (R$) |
Transfers From (To) Parent [Abstract] | |
Maximum claims payment amount | R$ 150000 |
Maximum number of business days for claims payment | 20 days |
Schedule of Fair Value Measurem
Schedule of Fair Value Measurement hierarchy (Detail) - BRL (R$) R$ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value, Inputs, Level 1 | ||
Assets, Fair value | ||
Cash | R$ 287491 | R$ 277500 |
Fair Value, Inputs, Level 2 | ||
Assets, Fair value | ||
Cash equivalents | 4,097,838 | 6,585,184 |
Short-term investments | 238,962 | 136,286 |
Fair Value, Inputs, Level 3 | ||
Assets, Fair value | ||
Held-for-sale financial asset | R$ 1843778 | R$ 1965972 |
Financial Instruments and Ris_3
Financial Instruments and Risk Analysis - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Foreign Exchange Risk | |||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||||
Debt subject to floating rate | 46.10% | 32.90% | |||||||
Foreign Exchange Contract | Foreign Exchange Risk | Possible Scenario | |||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||||
Exchange rate depreciation percentage | 25.00% | 50.00% | |||||||
Interest Rate Contract | Foreign Exchange Risk | TJLP Indexed Debt | |||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||||
Exchange rate fluctuation risk | 6.98% | 6.56% | 6.60% | 6.75% | 7.00% | ||||
Interest Rate Contract | Foreign Exchange Risk | Probable Scenario | |||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||||
Debt subject to floating rate | 25.00% | ||||||||
Interest Rate Contract | Foreign Exchange Risk | Remote Scenario | |||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||||
Debt subject to floating rate | 50.00% | ||||||||
Short-term Investments | |||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||||
Consolidated cash investments with counterparties | 94.14% | ||||||||
Subsequent Event | Interest Rate Contract | Foreign Exchange Risk | TJLP Indexed Debt | |||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||||
Exchange rate fluctuation risk | 7.03% | ||||||||
Borrowings and Financing | Foreign Exchange Contract | Foreign Exchange Risk | |||||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||||
Borrowings and financing percent of total liabilities | 53.60% | 72.90% |
Schedule of Financial Assets (D
Schedule of Financial Assets (Detail) - Foreign Exchange Risk - BRL (R$) R$ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Carrying amount | Foreign Exchange Contract | Borrowings and Financing | ||
Financial Assets and Liabilities [Line Items] | ||
Financial liabilities | R$ 8816766 | |
Carrying amount | Foreign Exchange Contract | Cash | ||
Financial Assets and Liabilities [Line Items] | ||
Financial assets | 70,116 | R$ 82482 |
Carrying amount | Foreign Exchange Contract | Cash Equivalents | ||
Financial Assets and Liabilities [Line Items] | ||
Financial assets | 154,514 | 1,307 |
Carrying amount | Foreign Exchange Contract | Short-term Investments | ||
Financial Assets and Liabilities [Line Items] | ||
Financial assets | 662 | |
Carrying amount | Interest Rate Contract | Borrowings and Financing | ||
Financial Assets and Liabilities [Line Items] | ||
Financial liabilities | 7,633,140 | |
Carrying amount | Interest Rate Contract | Cash Equivalents | ||
Financial Assets and Liabilities [Line Items] | ||
Financial assets | 3,943,324 | 6,583,877 |
Carrying amount | Interest Rate Contract | Short-term Investments | ||
Financial Assets and Liabilities [Line Items] | ||
Financial assets | 238,962 | 135,624 |
Fair Value | Foreign Exchange Contract | Borrowings and Financing | ||
Financial Assets and Liabilities [Line Items] | ||
Financial liabilities | 9,548,690 | |
Fair Value | Foreign Exchange Contract | Cash | ||
Financial Assets and Liabilities [Line Items] | ||
Financial assets | 70,116 | 82,482 |
Fair Value | Foreign Exchange Contract | Cash Equivalents | ||
Financial Assets and Liabilities [Line Items] | ||
Financial assets | 154,514 | 1,307 |
Fair Value | Foreign Exchange Contract | Short-term Investments | ||
Financial Assets and Liabilities [Line Items] | ||
Financial assets | 662 | |
Fair Value | Interest Rate Contract | Borrowings and Financing | ||
Financial Assets and Liabilities [Line Items] | ||
Financial liabilities | 7,633,140 | |
Fair Value | Interest Rate Contract | Cash Equivalents | ||
Financial Assets and Liabilities [Line Items] | ||
Financial assets | 3,943,324 | 6,583,877 |
Fair Value | Interest Rate Contract | Short-term Investments | ||
Financial Assets and Liabilities [Line Items] | ||
Financial assets | R$ 238962 | R$ 135624 |
Impact of Potential Depreciatio
Impact of Potential Depreciation of Euro and US Dollar (Detail) - Foreign Exchange Risk - Foreign Exchange Contract | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Probable Scenario | US dollar | ||
Foreign Currency Exchange Rate [Line Items] | ||
Exchange rate depreciation ratio | 3.8748 | 3.3080 |
Exchange rate depreciation percentage | 0.00% | 0.00% |
Probable Scenario | Euro | ||
Foreign Currency Exchange Rate [Line Items] | ||
Exchange rate depreciation ratio | 4.4390 | 3.9693 |
Exchange rate depreciation percentage | 0.00% | 0.00% |
Possible Scenario | ||
Foreign Currency Exchange Rate [Line Items] | ||
Exchange rate depreciation percentage | 25.00% | 50.00% |
Possible Scenario | US dollar | ||
Foreign Currency Exchange Rate [Line Items] | ||
Exchange rate depreciation ratio | 4.8435 | 4.1350 |
Exchange rate depreciation percentage | 25.00% | 25.00% |
Possible Scenario | Euro | ||
Foreign Currency Exchange Rate [Line Items] | ||
Exchange rate depreciation ratio | 5.5488 | 4.9616 |
Exchange rate depreciation percentage | 25.00% | 25.00% |
Remote Scenario | US dollar | ||
Foreign Currency Exchange Rate [Line Items] | ||
Exchange rate depreciation ratio | 5.8122 | 4.9620 |
Exchange rate depreciation percentage | 50.00% | 50.00% |
Remote Scenario | Euro | ||
Foreign Currency Exchange Rate [Line Items] | ||
Exchange rate depreciation ratio | 6.6585 | 5.9540 |
Exchange rate depreciation percentage | 50.00% | 50.00% |
Impact of Foreign Exchange Expo
Impact of Foreign Exchange Exposure (Detail) R$ in Thousands | 12 Months Ended |
Dec. 31, 2018BRL (R$) | |
Possible Scenario | Foreign Exchange Contract | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | R$ 2150591 |
Remote Scenario | Foreign Exchange Contract | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | 4,301,181 |
Foreign Exchange Risk Sensitivity Analysis | Possible Scenario | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | (11,307,855) |
Foreign Exchange Risk Sensitivity Analysis | Possible Scenario | Foreign Exchange Contract | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | 10,752,955 |
Foreign Exchange Risk Sensitivity Analysis | Possible Scenario | Foreign Exchange Contract | US dollar | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | 19,020,726 |
Foreign Exchange Risk Sensitivity Analysis | Possible Scenario | Foreign Exchange Contract | US dollar | Cash | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | (193,566) |
Foreign Exchange Risk Sensitivity Analysis | Possible Scenario | Foreign Exchange Contract | Euro | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | 3,320,871 |
Foreign Exchange Risk Sensitivity Analysis | Possible Scenario | Foreign Exchange Contract | Euro | Cash | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | (87,221) |
Foreign Exchange Risk Sensitivity Analysis | Remote Scenario | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | (13,569,427) |
Foreign Exchange Risk Sensitivity Analysis | Remote Scenario | Foreign Exchange Contract | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | 12,903,545 |
Foreign Exchange Risk Sensitivity Analysis | Remote Scenario | Foreign Exchange Contract | US dollar | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | 22,824,872 |
Foreign Exchange Risk Sensitivity Analysis | Remote Scenario | Foreign Exchange Contract | US dollar | Cash | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | (232,279) |
Foreign Exchange Risk Sensitivity Analysis | Remote Scenario | Foreign Exchange Contract | Euro | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | 3,985,045 |
Foreign Exchange Risk Sensitivity Analysis | Remote Scenario | Foreign Exchange Contract | Euro | Cash | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | (104,666) |
Foreign Exchange Risk Sensitivity Analysis | Probable Scenario | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | (9,046,285) |
Foreign Exchange Risk Sensitivity Analysis | Probable Scenario | Foreign Exchange Contract | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | 8,602,364 |
Foreign Exchange Risk Sensitivity Analysis | Probable Scenario | Foreign Exchange Contract | US dollar | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | 15,216,581 |
Foreign Exchange Risk Sensitivity Analysis | Probable Scenario | Foreign Exchange Contract | US dollar | Cash | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | (154,852) |
Foreign Exchange Risk Sensitivity Analysis | Probable Scenario | Foreign Exchange Contract | Euro | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | 2,656,697 |
Foreign Exchange Risk Sensitivity Analysis | Probable Scenario | Foreign Exchange Contract | Euro | Cash | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Total associated to exchange rates | R$ 69777 |
Schedule of Interest Rates Used
Schedule of Interest Rates Used for Interest Rate Contracts (Detail) - Interest Rate Risk Sensitivity Analysis - Interest Rate Contract | Dec. 31, 2018 |
Probable Scenario | CDI Indexed Debt | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Interest Rate Fluctuation Risk | 6.40 |
Probable Scenario | TJLP Indexed Debt | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Interest Rate Fluctuation Risk | 6.98 |
Possible Scenario | CDI Indexed Debt | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Interest Rate Fluctuation Risk | 8 |
Possible Scenario | TJLP Indexed Debt | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Interest Rate Fluctuation Risk | 8.73 |
Remote Scenario | CDI Indexed Debt | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Interest Rate Fluctuation Risk | 9.60 |
Remote Scenario | TJLP Indexed Debt | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Interest Rate Fluctuation Risk | 10.47 |
Impact of Interest Rate Exposur
Impact of Interest Rate Exposure (Detail) - Interest Rate Risk Sensitivity Analysis - Interest Rate Contract R$ in Thousands | 12 Months Ended |
Dec. 31, 2018BRL (R$) | |
Probable Scenario | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Impact of Interest Rate Exposure | R$ 8189916 |
Probable Scenario | CDI Indexed Debt | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Impact of Interest Rate Exposure | 4,122,410 |
Probable Scenario | TJLP Indexed Debt | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Impact of Interest Rate Exposure | 4,067,506 |
Possible Scenario | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Impact of Interest Rate Exposure | 10,384,767 |
Impact of Interest Rate Exposure, gain (loss) | 2,194,851 |
Possible Scenario | CDI Indexed Debt | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Impact of Interest Rate Exposure | 5,373,161 |
Possible Scenario | TJLP Indexed Debt | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Impact of Interest Rate Exposure | 5,011,606 |
Remote Scenario | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Impact of Interest Rate Exposure | 12,744,797 |
Impact of Interest Rate Exposure, gain (loss) | 4,554,881 |
Remote Scenario | CDI Indexed Debt | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Impact of Interest Rate Exposure | 6,714,517 |
Remote Scenario | TJLP Indexed Debt | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Impact of Interest Rate Exposure | R$ 6030280 |
Schedule of Net Operating Reven
Schedule of Net Operating Revenue (Detail) - BRL (R$) R$ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Operating Income (Loss) [Abstract] | ||||
Gross operating revenue | [1] | R$ 30426548 | R$ 36338432 | R$ 45327110 |
Deductions from gross revenue | (8,366,534) | (12,548,778) | (19,330,687) | |
Taxes | (6,725,356) | (7,707,961) | (7,760,930) | |
Discounts and other deductions | [1] | (1,641,178) | (4,840,817) | (11,569,757) |
Net operating revenue | R$ 22060014 | R$ 23789654 | R$ 25996423 | |
[1] | The Company simplified the breakdown of its bills sent to its customers. The changes in billing do not impact the taxes levied on sales and/or services or the net revenue. |
Summary of Operating Expenses (
Summary of Operating Expenses (Detail) - BRL (R$) R$ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Operating (expenses) income | ||||
Cost of sales and/or services | R$ 15822732 | R$ 15676216 | R$ 16741791 | |
Selling expenses | (4,478,352) | (4,399,936) | (4,383,163) | |
General and administrative expenses | (2,697,865) | (3,064,252) | (3,687,706) | |
Other operating income | 2,204,134 | 1,985,101 | 1,756,100 | |
Other operating expenses | (1,773,483) | (3,028,590) | (2,988,067) | |
Equity pick up | (13,492) | (433) | (5,118) | |
Total operating expenses | (22,581,790) | (24,184,326) | (26,049,745) | |
Provision for Bad Debt | ||||
Operating (expenses) income | ||||
Total operating expenses | [1] | (1,070,301) | (691,807) | (643,287) |
Third-Party Services | ||||
Operating (expenses) income | ||||
Total operating expenses | (5,924,556) | (6,221,058) | (6,399,191) | |
Depreciation and Amortization | ||||
Operating (expenses) income | ||||
Total operating expenses | (5,952,905) | (5,881,302) | (6,310,619) | |
Rentals and Insurance | ||||
Operating (expenses) income | ||||
Total operating expenses | (4,341,969) | (4,162,659) | (4,329,546) | |
Personnel | ||||
Operating (expenses) income | ||||
Total operating expenses | (2,594,464) | (2,791,331) | (2,852,224) | |
Network Maintenance Services | ||||
Operating (expenses) income | ||||
Total operating expenses | (1,104,015) | (1,251,511) | (1,540,320) | |
Interconnection | ||||
Operating (expenses) income | ||||
Total operating expenses | (658,068) | (778,083) | (1,173,475) | |
Provision for contingencies | ||||
Operating (expenses) income | ||||
Total operating expenses | (89,777) | (143,517) | (1,056,410) | |
Advertising and Marketing | ||||
Operating (expenses) income | ||||
Total operating expenses | (382,091) | (413,580) | (448,990) | |
Handsets and Other Costs | ||||
Operating (expenses) income | ||||
Total operating expenses | (196,347) | (223,335) | (284,119) | |
Impairments | ||||
Operating (expenses) income | ||||
Total operating expenses | [2] | (46,534) | (225,512) | |
Taxes and Other Expenses | ||||
Operating (expenses) income | ||||
Total operating expenses | (134,558) | (345,132) | (559,162) | |
Other Operating Income | ||||
Operating (expenses) income | ||||
Total operating expenses | [3] | R$ 132739 | R$ 1234477 | R$ 226890 |
[1] | In 2018, the Company reassessed the assumptions for estimate adopted for the provision for bad debt. | |||
[2] | As at December 31, 2018, no impairment was recognized. As at December 31, 2017 and 2016, the Company conducted the annual impairment test and recognized a loss on goodwill related to Africa which is being reported as held for sale, in amounting R$46,534 and R$225,512, respectively. | |||
[3] | In 2017 refers to the effects of non-recurring expenses related to unrecoverable tax, write-off of other assets and other expenses of R$1,234 million (R$227 million in 2016) due to reconcile the accounting balances as part of the process of JRP. |
Summary of Operating Expenses_2
Summary of Operating Expenses (Parenthetical) (Detail) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Other Non Operating Income Expense [Line Items] | |||
Impairment charge | R$ 0 | R$ 46534 | R$ 225512 |
BRAZIL | |||
Other Non Operating Income Expense [Line Items] | |||
Impairment charge | 1,234,000 | 227,000 | |
Africa | |||
Other Non Operating Income Expense [Line Items] | |||
Impairment charge | R$ 46534 | R$ 225512 |
Financial Income (Expenses) (De
Financial Income (Expenses) (Detail) - BRL (R$) R$ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Financial income | ||||
Exchange differences on translating foreign short-term investments (trading) | R$ 1329 | R$ 135226 | ||
Interest on judicial deposits and other assets | 808,764 | R$ 1049923 | 615,085 | |
Income from short-term investments | 142,597 | 112,394 | ||
Interest on related parties loans | 0 | 0 | 0 | |
Other income | 571,884 | 500,260 | 578,452 | |
Total | 1,524,574 | 1,550,183 | 1,170,705 | |
Financial expenses and other charges | ||||
Inflation and exchange losses on third-party borrowings | [1] | (2,645,980) | 4,580,177 | |
Interest on borrowings payable to third parties | [1] | (1,399,687) | (2,177,976) | |
Derivatives | [1] | (5,147,958) | ||
Subtotal: | [1] | (4,045,667) | (2,745,757) | |
Loss on held-for-sale financial assets | [2] | 292,700 | (267,008) | (1,090,295) |
Interest on other liabilities | (800,413) | (1,641,278) | (598,301) | |
Tax on transactions and bank fees | (428,872) | (512,003) | (679,294) | |
Monetary variation to provisions for contingencies | 8,076 | (264,511) | (238,428) | |
Interest on taxes in installments - tax financing program | (28,079) | (27,294) | (19,869) | |
Other expenses | [3] | (534,386) | (450,147) | (174,070) |
Subtotal: | (1,490,974) | (3,162,241) | (2,800,257) | |
Total | (5,536,641) | (3,162,241) | (5,546,014) | |
Financial expenses, net | R$ 4012067 | R$ 1612058 | R$ 4375309 | |
[1] | In 2018, contractual interest and foreign currency fluctuation result from the incurrence of R$4,045 million of Borrowings and financing expenses as a result of the settlement of many of the claims in our JR Proceedings related to the debt instruments compared to no borrowings and financing expenses during the corresponding period of 2017 due to the elimination of the borrowings and financing expenses as a result of the commencement of the JR Proceedings in June 2016. | |||
[2] | In 2018, refers to the exchange gain related to the depreciation of Brazilian real against the US dollar and loss of R$489 million / US$126 million resulting from the revision of the recoverable amount of dividends receivable from Unitel and the fair value of the cash investment in Unitel. In 2017, refers to the loss of R$129 million / US$39 million (R$789 million / US$242 million in 2016) resulting from the revision of the recoverable amount of dividends receivable from Unitel and the fair value of the cash investment in Unitel and exchange losses related to the depreciation of the Kwanza against the US dollar and the Brazilian real. | |||
[3] | Represented mainly by financial fees and commissions. |
Financial Income (Expenses) (Pa
Financial Income (Expenses) (Parenthetical) (Detail) R$ in Thousands, $ in Millions | 12 Months Ended | ||||||
Dec. 31, 2018BRL (R$) | Dec. 31, 2018USD ($) | Dec. 31, 2017BRL (R$) | Dec. 31, 2017USD ($) | Dec. 31, 2016BRL (R$) | Dec. 31, 2016USD ($) | ||
Total Other Income Expense [Line Items] | |||||||
Contractual interest and foreign currency fluctuation | [1] | R$ 4045667 | R$ 2745757 | ||||
Loss from revision of recoverable amount of dividends receivable | 489,000 | $ 126 | R$ 129000 | $ 39 | R$ 789000 | $ 242 | |
Contractual Interest Rate Reduction [Member] | |||||||
Total Other Income Expense [Line Items] | |||||||
Contractual interest and foreign currency fluctuation | R$ 4045000 | ||||||
[1] | In 2018, contractual interest and foreign currency fluctuation result from the incurrence of R$4,045 million of Borrowings and financing expenses as a result of the settlement of many of the claims in our JR Proceedings related to the debt instruments compared to no borrowings and financing expenses during the corresponding period of 2017 due to the elimination of the borrowings and financing expenses as a result of the commencement of the JR Proceedings in June 2016. |
Cash and Cash Equivalents (Deta
Cash and Cash Equivalents (Detail) - BRL (R$) R$ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Cash and Cash Equivalents [Abstract] | ||
Cash | R$ 287491 | R$ 277500 |
Cash equivalents | 4,097,838 | 6,585,184 |
Total | 4,385,329 | 6,862,684 |
Repurchase agreements | 2,742,731 | 6,225,547 |
Private securities | 0 | 0 |
Bank certificates of deposit | 301,632 | 348,318 |
Time deposits | 154,514 | 1,307 |
Other | 3,888 | 10,012 |
Cash equivalents | R$ 4097838 | R$ 6585184 |
Short-term Investments (Detail)
Short-term Investments (Detail) - BRL (R$) R$ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Short-term Investments [Abstract] | ||
Private securities | R$ 213653 | R$ 114839 |
Government securities | 25,309 | 21,447 |
Total | 238,962 | 136,286 |
Current | 201,975 | 21,447 |
Non-current | R$ 36987 | R$ 114839 |
Trade Accounts Receivable, Ne_2
Trade Accounts Receivable, Net (Detail) - BRL (R$) R$ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Receivables [Abstract] | |||
Billed services | R$ 6783022 | R$ 7478145 | |
Unbilled services | 984,062 | 634,241 | |
Mobile handsets and accessories sold | 619,821 | 597,267 | |
Provision for bad debt | (1,870,350) | (1,342,211) | R$ 1084895 |
Total | R$ 6516555 | R$ 7367442 |
List of Past Due Financing Rece
List of Past Due Financing Receivables (Detail) - BRL (R$) R$ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accounts Receivable [Line Items] | ||
Trade receivable | R$ 8386905 | R$ 8709653 |
Current | ||
Accounts Receivable [Line Items] | ||
Trade receivable | 6,250,613 | 6,096,205 |
Past- due up to 60 days | ||
Accounts Receivable [Line Items] | ||
Trade receivable | 672,673 | 919,421 |
Past- due from 61 to 90 days | ||
Accounts Receivable [Line Items] | ||
Trade receivable | 131,798 | 144,818 |
Past due from 91 to 120 days | ||
Accounts Receivable [Line Items] | ||
Trade receivable | 132,562 | 130,633 |
Past- due from 121 to 150 days | ||
Accounts Receivable [Line Items] | ||
Trade receivable | 104,628 | 128,175 |
Over 150 days past- due | ||
Accounts Receivable [Line Items] | ||
Trade receivable | R$ 1094631 | R$ 1290401 |
Summary of Allowance for Doubtf
Summary of Allowance for Doubtful Accounts (Detail) - BRL (R$) R$ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||
Beginning balance | R$ 1342211 | R$ 1084895 |
Provision for bad debt | (1,216,658) | (777,106) |
Trade receivables written off as uncollectible | 688,519 | 519,790 |
Ending balance | R$ 1870350 | R$ 1342211 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Loss Carryforwards [Line Items] | |||
Statutory income tax rate | 34.00% | 34.00% | 34.00% |
Income tax expense (benefit) | R$ 347139 | R$ 350987 | R$ 2245113 |
Percentage of tax debts settled in cash | 70.00% | ||
Tax loss carryforward period | 5 years | ||
Minimum | |||
Operating Loss Carryforwards [Line Items] | |||
Remaining tax debts settled with tax loss carryforwards | 30.00% | ||
Corporation Taxes | |||
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 Tax Expense A
Summary of Income Tax Expense Attributable to Income From Continuing Operation (Detail) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Current tax (expense) | R$ 115706 | R$ 906080 | R$ 712814 |
Deferred tax (expense) benefit | 231,433 | 1,257,067 | (1,532,299) |
Income tax and social contribution effect on profit or loss | R$ 347139 | R$ 350987 | R$ 2245113 |
Summary of Tax Rate Reconciliat
Summary of Tax Rate Reconciliation From Continuing Operation (Detail) - BRL (R$) R$ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Income Tax Disclosure [Abstract] | ||||
Income (loss) before taxes | [1] | R$ 27046698 | R$ 4378648 | R$ 13434629 |
Income tax and social contribution at statutory rate (34%) | (9,195,877) | 1,488,740 | 4,567,774 | |
Valuation allowance | [2] | (4,367,062) | (1,134,511) | (4,048,859) |
Effect of foreign tax rate differential | (23,063) | (12,574) | ||
Tax effects of nondeductible expenses | [3] | (652,940) | (92,831) | (2,892,381) |
Tax effects of tax-exempt`income | [3] | 14,564,537 | 373,321 | 121,546 |
Tax incentives (basically, operating income) | [4] | 3,068 | 14,007 | 21,121 |
Tax amnesty program | [5] | (274,529) | ||
Other | (4,587) | (147) | (1,740) | |
Income tax and social contribution effect on profit or loss | R$ 347139 | R$ 350987 | R$ 2245113 | |
[1] | At December 31, 2018, 2017 and 2016 income (loss) before income taxes and income tax (expense) benefit for continuing operations is as follows: | |||
[2] | Refers to the increase in the valuation allowance related to the deferred tax assets in 2018, 2017, and 2016. | |||
[3] | The main tax-exempt income refers to the novation of the debt obligations and other liabilities due to the effects of the Reorganization Judicial Plan, primarily as a result of the present value adjustments in the initial recognition date. The main effects of nondeductible expenses refers to the reduction of the fair value of Unitel held-for-sale investment, which is not tax deductible in the amount of R$166 million (R$90 million in 2017 and R$371 million in 2016). | |||
[4] | These tax incentives correspond mainly to a 75% reduction in the current tax due on operating income obtained as a result of telecommunication services rendered in certain northern and northeast regions of Brazil, where the Company holds facilities for the purpose of rendering those services. This tax benefit is usually granted for a 10 year period, limited up to January 1, 2024. | |||
[5] | Refers to a tax position taken in prior periods that were assessed by the taxing authorities. Although the Company believed in prior periods that these positions would more-likely-than-not of being sustained, it was decided to adhere to PRORELIT and avoid substantial costs to keep on going discussions with government. PRORELIT program allowed taxpayers to settle federal tax debts accrued prior to June 30, 2015, excluding tax debts that are subject to tax installment payments. |
Summary of Tax Rate Reconcili_2
Summary of Tax Rate Reconciliation From Continuing Operation (Parenthetical) (Detail) - BRL (R$) R$ in Thousands | 12 Months Ended | |||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||||
Income Tax Reconciliation [Line Items] | ||||||
Statutory income tax rate | 34.00% | 34.00% | 34.00% | |||
Income (loss) before income taxes | [1] | R$ 27046698 | R$ 4378648 | R$ 13434629 | ||
Income tax (current and deferred) | 347,139 | 350,987 | (2,245,113) | |||
Current tax income (expense) | 115,706 | (906,080) | (712,814) | |||
Deferred tax income (expense) benefit | 231,433 | 1,257,067 | (1,532,299) | |||
Nondeductible fines in the amount | R$ 166000 | 90,000 | 371,000 | |||
Tax incentives current income tax | 75.00% | |||||
Tax benefit granted, year | 10 years | |||||
Brazil | ||||||
Income Tax Reconciliation [Line Items] | ||||||
Income (loss) before income taxes | R$ 37559050 | (3,115,832) | (12,402,406) | |||
Income tax (current and deferred) | 343,082 | 311,895 | (2,054,234) | |||
Current tax income (expense) | 164,050 | (893,031) | (521,773) | |||
Deferred tax income (expense) benefit | 179,031 | 1,204,926 | (1,532,461) | |||
Foreign Tax Authority | ||||||
Income Tax Reconciliation [Line Items] | ||||||
Income (loss) before income taxes | (10,512,352) | (1,262,816) | (1,032,223) | |||
Income tax (current and deferred) | 4,057 | 39,092 | (190,879) | |||
Current tax income (expense) | (48,344) | (13,049) | (191,041) | |||
Deferred tax income (expense) benefit | R$ 52402 | [2] | R$ 52141 | [3] | R$ 162 | |
[1] | At December 31, 2018, 2017 and 2016 income (loss) before income taxes and income tax (expense) benefit for continuing operations is as follows: | |||||
[2] | The amount of R$ 52,402 is related to the Tax effect of the entities classified as held-for-sale. | |||||
[3] | The amount of R$ 52,141 is related to the Tax effect of the entities classified as held-for-sale. |
Summary of Significant Componen
Summary of Significant Components of Current and Deferred Taxes (Detail) - BRL (R$) R$ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |||
Income Tax Rate Reconciliation [Line Items] | ||||||
Recoverable taxes | R$ 621246 | R$ 1123510 | ||||
Total current taxes payable | 27,026 | 567,129 | ||||
Other temporary differences | [1] | 5,117,917 | 8,854,946 | |||
Tax loss carryforwards | 13,703,530 | [2] | 5,752,241 | [2] | R$ 4956994 | |
Total deferred taxes assets | 18,821,447 | 14,607,187 | 13,806,955 | |||
Other intangibles | (2,121,763) | (2,428,128) | ||||
Pension plan assets | (249,796) | (333,899) | (316,060) | |||
Other temporary differences | (790,534) | [3] | (1,073,293) | [3] | (1,324,904) | |
Total deferred tax liabilities | (3,162,093) | (3,835,320) | (4,348,229) | |||
Valuation allowance | (15,636,304) | (11,269,242) | R$ 10134731 | |||
Total deferred taxes, net | (497,375) | |||||
Total deferred taxes, net | 23,050 | |||||
Imposto de Renda de Pessoa Juridica (IRPJ) | ||||||
Income Tax Rate Reconciliation [Line Items] | ||||||
Recoverable taxes | [4] | 287,472 | 565,725 | |||
Corporation Taxes | ||||||
Income Tax Rate Reconciliation [Line Items] | ||||||
Recoverable taxes | [4] | 91,996 | 135,348 | |||
IRRF/CSLL-withholding income taxes | ||||||
Income Tax Rate Reconciliation [Line Items] | ||||||
Recoverable taxes | [5] | 241,778 | 422,437 | |||
Income Taxes Payable | ||||||
Income Tax Rate Reconciliation [Line Items] | ||||||
Total current taxes payable | 21,628 | 416,080 | ||||
Social Corporation Taxes | ||||||
Income Tax Rate Reconciliation [Line Items] | ||||||
Total current taxes payable | R$ 5398 | R$ 151049 | ||||
[1] | For the year ended December 31, 2018, total valuation allowance increased from R$11,269,242 (10,134,731 in 2016) to R$15,636,304, reflecting a net change in the valuation allowance totaling R$4,367,062 recognized for the companies that, as of December 31, 2018, 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 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 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. | |||||
[2] | The tax loss carryfowards in Brazil and foreign subsidiaries is approximately R$29,692,453 and R$14,432,380, and corresponding to R$10,095,435 and R$3,608,095 of deferred tax assets, respectively, which do not expire, and may be carried forward indefinitely. The Company can offset their tax loss carryforwards against taxable income up to a limit of 30% per year, pursuant to the prevailing tax law. | |||||
[3] | Refer mainly the tax effects of foreign exchange liabilities, monetary variations of judicial deposits and tax incentives. | |||||
[4] | Refer mainly to prepaid income tax and social contribution that will be offset against federal taxes payable in the future. | |||||
[5] | Refer to withholding income tax (IRRF) credits on cash investments, derivatives, intragroup loans, government entities, and other amounts that are used as deductions from income tax payable for the years, and social contribution withheld at source on services provided to government agencies. |
Summary of Significant Compon_2
Summary of Significant Components of Current and Deferred Taxes (Parenthetical) (Detail) - BRL (R$) R$ in Thousands | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |||
Income Tax Rate Reconciliation [Line Items] | |||||
Valuation allowance | R$ 15636304 | R$ 11269242 | R$ 10134731 | ||
Valuation allowance, change in amount | 4,367,062 | ||||
Tax loss carryforwards | R$ 13703530 | [1] | R$ 5752241 | [1] | R$ 4956994 |
Tax loss carryforwards against taxable income offset percentage | 30.00% | ||||
Brazil | |||||
Income Tax Rate Reconciliation [Line Items] | |||||
Deferred tax assets, that do not expire | R$ 29692453 | ||||
Tax loss carryforwards | 10,095,435 | ||||
Foreign Tax Authority | |||||
Income Tax Rate Reconciliation [Line Items] | |||||
Deferred tax assets, that do not expire | 14,432,380 | ||||
Tax loss carryforwards | R$ 3608095 | ||||
[1] | The tax loss carryfowards in Brazil and foreign subsidiaries is approximately R$29,692,453 and R$14,432,380, and corresponding to R$10,095,435 and R$3,608,095 of deferred tax assets, respectively, which do not expire, and may be carried forward indefinitely. The Company can offset their tax loss carryforwards against taxable income up to a limit of 30% per year, pursuant to the prevailing tax law. |
Summary of Movements in Deferre
Summary of Movements in Deferred Income Tax (Detail) - BRL (R$) R$ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Income Tax Disclosures [Line Items] | |||||
Provision for contingencies | R$ 1273801 | R$ 4235797 | R$ 3827131 | ||
Allowance for doubtful accounts | 478,827 | 693,315 | 654,624 | ||
Profit sharing | 94,504 | 101,993 | 22,304 | ||
Foreign exchange differences | 1,403,193 | 1,062,308 | 1,062,308 | ||
Other temporary differences | 177,085 | 1,653,873 | 2,037,477 | ||
License | 1,690,507 | 1,107,660 | 1,246,117 | ||
Tax loss carryforwards | 13,703,530 | [1] | 5,752,241 | [1] | 4,956,994 |
Total deferred taxes assets | 18,821,447 | 14,607,187 | 13,806,955 | ||
Other intangibles | (2,121,763) | (2,428,128) | (2,707,265) | ||
Pension plan assets | (249,796) | (333,899) | (316,060) | ||
Other temporary differences | (790,534) | [2] | (1,073,293) | [2] | (1,324,904) |
Total deferred tax liabilities | (3,162,093) | (3,835,320) | (4,348,229) | ||
Valuation allowance | (15,636,304) | (11,269,242) | (10,134,731) | ||
Total net deferred tax | 23,050 | (497,375) | R$ 676005 | ||
Recognized in continuing operations | |||||
Income Tax Disclosures [Line Items] | |||||
Provision for contingencies | (2,961,996) | 408,666 | |||
Allowance for doubtful accounts | (214,488) | 38,691 | |||
Profit sharing | (7,489) | 79,689 | |||
Foreign exchange differences | 340,885 | ||||
Other temporary differences | 41,889 | (383,604) | |||
License | (231,860) | (138,457) | |||
Tax loss carryforwards | 7,923,539 | 1,853,701 | |||
Total deferred taxes assets | 4,890,480 | 1,858,686 | |||
Other intangibles | 306,365 | 279,137 | |||
Pension plan assets | (228,283) | (49,996) | |||
Other temporary differences | (422,469) | 251,611 | |||
Total deferred tax liabilities | (344,387) | 480,752 | |||
Valuation allowance | (4,367,062) | (1,134,511) | |||
Total net deferred tax | 179,031 | 1,204,927 | |||
Other comprehensive income | |||||
Income Tax Disclosures [Line Items] | |||||
Pension plan assets | 312,386 | 32,157 | |||
Total deferred tax liabilities | 312,386 | 32,157 | |||
Total net deferred tax | 312,386 | 32,157 | |||
Add-backs/ Offsets / Transfer | |||||
Income Tax Disclosures [Line Items] | |||||
Other temporary differences | (972,464) | ||||
License | 268,494 | ||||
Tax loss carryforwards | 27,750 | (1,058,454) | [3] | ||
Total deferred taxes assets | (676,220) | (1,058,454) | [3] | ||
Other temporary differences | 705,228 | ||||
Total deferred tax liabilities | 705,228 | ||||
Total net deferred tax | R$ 29008 | R$ 1058454 | [3] | ||
[1] | The tax loss carryfowards in Brazil and foreign subsidiaries is approximately R$29,692,453 and R$14,432,380, and corresponding to R$10,095,435 and R$3,608,095 of deferred tax assets, respectively, which do not expire, and may be carried forward indefinitely. The Company can offset their tax loss carryforwards against taxable income up to a limit of 30% per year, pursuant to the prevailing tax law. | ||||
[2] | Refer mainly the tax effects of foreign exchange liabilities, monetary variations of judicial deposits and tax incentives. | ||||
[3] | This year offsets relates to the tax debts included in the Tax Compliance Program (PRT) and in the Special Tax Compliance Program (PERT), as it was possible to convert some amount of tax loss carryforwards into tax credits in order to offset part of the debts paid under the rules of such Programs, in the amount of R$1,035 million and R$21 million, respectively (Note 18). R$ 208,642 refers to the utilization of tax loss carryfowards for Income Tax and R$ 849,812 refers to utilization of tax loss carryfowards for non-income tax. |
Summary of Movements in Defer_2
Summary of Movements in Deferred Income Tax (Parenthetical) (Detail) - BRL (R$) R$ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Income Tax Disclosures [Line Items] | ||
Utilization of tax loss carryforwards for Income Tax | R$ 208642 | |
Utilization of tax loss carryforwards for non-income tax | 849,812 | |
PRT (MP 766/2017) | ||
Income Tax Disclosures [Line Items] | ||
Tax debts offset by loss carry forwards | R$ 1035000 | 1,035,000 |
PERT (LAW 13496/2017) | ||
Income Tax Disclosures [Line Items] | ||
Tax debts offset by loss carry forwards | R$ 21000 |
Other Taxes (Detail)
Other Taxes (Detail) - BRL (R$) R$ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | |
Taxes [Line Items] | |||
Other taxes, asset, current and non current | R$ 1519228 | R$ 1709145 | |
Other taxes, asset, current | 803,252 | 1,081,587 | |
Other taxes, asset, non current | 715,976 | 627,558 | |
Other taxes, liability, current and non current | 1,662,584 | 2,311,326 | |
Other taxes, liability, current | 1,033,868 | 1,443,662 | |
Other taxes, liability, non current | 628,716 | 867,664 | |
State VAT (ICMS) | |||
Taxes [Line Items] | |||
Other taxes, asset, current and non current | [1] | 1,240,353 | 1,411,538 |
Other taxes, liability, current and non current | [1] | 556,693 | 610,847 |
Taxes on revenue (PIS and COFINS) | |||
Taxes [Line Items] | |||
Other taxes, asset, current and non current | 215,860 | 244,853 | |
Other taxes, liability, current and non current | [2] | 235,319 | 184,472 |
Other Tax [Member] | |||
Taxes [Line Items] | |||
Other taxes, asset, current and non current | 63,015 | 52,754 | |
Other taxes, liability, current and non current | [3] | 181,437 | 530,153 |
ICMS Agreement No. 69/1998 | |||
Taxes [Line Items] | |||
Other taxes, liability, current and non current | 34,113 | 22,595 | |
FUST/FUNTTEL/broadcasting fees | |||
Taxes [Line Items] | |||
Other taxes, liability, current and non current | [4] | R$ 655022 | R$ 963259 |
[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. | ||
[2] | Refers basically to the Social Integration Program Tax on Revenue (PIS) and Social Security Funding Tax on Revenue (COFINS) on revenue, financial income, and other income. | ||
[3] | Consisting primarily of monetary variation to suspended taxes and withholding tax on intragroup loans and interest on capital. | ||
[4] | The Company and its subsidiaries Telemar and Oi Móvel filed lawsuits to discuss the correct calculation of the contribution to the FUST and in the course of the lawsuits made escrow deposits to suspend its collection. These discussions are also being judged by higher courts and a possible transformation of the deposited amounts into definitive payments should not occur within two (2) years |
Other Taxes - Additional Inform
Other Taxes - Additional Information (Detail) - Taxes on revenue (PIS and COFINS) R$ in Millions | 12 Months Ended |
Dec. 31, 2018BRL (R$)Lawsuits | |
Income Tax [Line Items] | |
Adjusted and unrecognized amount of credits | R$ 3050 |
Number of lawsuits | Lawsuits | 3 |
Lawsuits final decision | |
Income Tax [Line Items] | |
Adjusted and unrecognized amount of credits | R$ 2050 |
Judicial Deposits Transactions
Judicial Deposits Transactions (Detail) - BRL (R$) R$ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | |
Deposit assets, gross | R$ 9384630 | R$ 11246144 | |
Provision for losses | [1] | (649,910) | (1,933,034) |
Deposit Assets | 8,734,720 | 9,313,110 | |
Current | 1,715,934 | 1,023,348 | |
Non-current | 7,018,786 | 8,289,762 | |
Civil | |||
Deposit assets, gross | 5,849,978 | 6,948,344 | |
Tax | |||
Deposit assets, gross | 2,337,508 | 2,660,132 | |
Labor | |||
Deposit assets, gross | R$ 1197144 | R$ 1637668 | |
[1] | This amount represents the estimated loss of balances of judicial deposits which are in the process of reconciliation with the obtained statements. |
Investments (Detail)
Investments (Detail) - BRL (R$) R$ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Investment [Line Items] | |||
Investments | R$ 117840 | R$ 136510 | R$ 135652 |
Joint venture | |||
Investment [Line Items] | |||
Investments | 31,488 | 42,346 | |
Investments in Associates | |||
Investment [Line Items] | |||
Investments | 44,124 | 42,115 | |
Tax incentives, net of allowances for losses | |||
Investment [Line Items] | |||
Investments | 31,876 | 31,579 | |
Other Investment | |||
Investment [Line Items] | |||
Investments | R$ 10352 | R$ 20470 |
Summary of Movements In Investm
Summary of Movements In Investment Balances (Detail) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Investments Schedule [Abstract] | |||
Beginning balance | R$ 136510 | R$ 135652 | |
Share of profits of subsidiaries | (13,492) | (433) | R$ 5118 |
Associates' share of other comprehensive income | (2,270) | 1,949 | |
Other | (2,908) | (658) | |
Ending balance | R$ 117840 | R$ 136510 | R$ 135652 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Detail) - BRL (R$) R$ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Property, Plant and Equipment [Line Items] | ||||
Beginning Balance | R$ 121421223 | R$ 116854804 | ||
Additions | 5,929,677 | 5,381,131 | ||
Write-offs | (712,735) | (814,712) | ||
Ending balance | 126,638,165 | 121,421,223 | ||
Beginning Balance | (94,337,769) | (90,774,972) | ||
Depreciation expenses | (4,328,988) | (4,165,721) | ||
Write-offs | 497,390 | 602,922 | ||
Transfers | 2 | |||
Ending balance | (98,169,367) | (94,337,769) | ||
Net balance | 28,468,798 | 27,083,454 | R$ 26079832 | |
Work in progress | ||||
Property, Plant and Equipment [Line Items] | ||||
Beginning Balance | 3,434,113 | 2,413,770 | ||
Additions | 5,117,872 | 4,661,570 | ||
Write-offs | (47,465) | (93,922) | ||
Transfers | (5,152,907) | (3,547,305) | ||
Ending balance | 3,351,613 | 3,434,113 | ||
Net balance | 3,351,613 | 3,434,113 | 2,413,770 | |
Automatic switching equipment | ||||
Property, Plant and Equipment [Line Items] | ||||
Beginning Balance | 20,007,287 | 19,974,446 | ||
Additions | 487 | 2,060 | ||
Write-offs | (1,827) | (2,235) | ||
Transfers | 68,518 | 33,016 | ||
Ending balance | 20,074,465 | 20,007,287 | ||
Beginning Balance | (18,604,545) | (18,267,700) | ||
Depreciation expenses | (299,925) | (338,003) | ||
Write-offs | 1,834 | 1,158 | ||
Transfers | (36) | |||
Ending balance | (18,902,672) | (18,604,545) | ||
Net balance | R$ 1171793 | 1,402,742 | 1,706,746 | |
Annual depreciation rate (average) | 11.00% | |||
Transmission and other equipment | ||||
Property, Plant and Equipment [Line Items] | ||||
Beginning Balance | [1] | R$ 58951421 | 56,720,433 | |
Additions | [1] | 372,138 | 375,050 | |
Write-offs | [1] | (53,374) | (19,656) | |
Transfers | [1] | 2,672,783 | 1,875,594 | |
Ending balance | [1] | 61,942,968 | 58,951,421 | |
Beginning Balance | [1] | (45,482,214) | (43,324,619) | |
Depreciation expenses | [1] | (2,271,906) | (2,175,732) | |
Write-offs | [1] | 48,582 | 18,610 | |
Transfers | [1] | (151) | (473) | |
Ending balance | [1] | (47,705,689) | (45,482,214) | |
Net balance | [1] | R$ 14237279 | 13,469,207 | 13,395,814 |
Annual depreciation rate (average) | [1] | 10.00% | ||
Infrastructure Assets | ||||
Property, Plant and Equipment [Line Items] | ||||
Beginning Balance | R$ 28340802 | 27,568,591 | ||
Additions | 388,988 | 268,931 | ||
Write-offs | (601,842) | (666,885) | ||
Transfers | 2,214,139 | 1,170,165 | ||
Ending balance | 30,342,087 | 28,340,802 | ||
Beginning Balance | (22,265,626) | (21,665,423) | ||
Depreciation expenses | (1,253,099) | (1,158,457) | ||
Write-offs | 443,347 | 558,879 | ||
Transfers | (353) | (625) | ||
Ending balance | (23,075,731) | (22,265,626) | ||
Net balance | R$ 7266356 | 6,075,176 | 5,903,168 | |
Annual depreciation rate (average) | 8.00% | |||
Buildings | ||||
Property, Plant and Equipment [Line Items] | ||||
Beginning Balance | R$ 4470284 | 4,311,533 | ||
Additions | 10,721 | 17,906 | ||
Write-offs | (4,660) | (821) | ||
Transfers | (15,168) | 141,666 | ||
Ending balance | 4,461,177 | 4,470,284 | ||
Beginning Balance | (2,728,656) | (2,547,638) | ||
Depreciation expenses | (95,679) | (96,940) | ||
Write-offs | 1,542 | 817 | ||
Transfers | 33,568 | (84,895) | ||
Ending balance | (2,789,225) | (2,728,656) | ||
Net balance | R$ 1671952 | 1,741,628 | 1,763,895 | |
Annual depreciation rate (average) | 8.00% | |||
Other assets | ||||
Property, Plant and Equipment [Line Items] | ||||
Beginning Balance | R$ 6217316 | 5,866,031 | ||
Additions | 39,471 | 55,614 | ||
Write-offs | (3,567) | (31,193) | ||
Transfers | 212,635 | 326,864 | ||
Ending balance | 6,465,855 | 6,217,316 | ||
Beginning Balance | (5,256,728) | (4,969,592) | ||
Depreciation expenses | (408,379) | (396,589) | ||
Write-offs | 2,085 | 23,458 | ||
Transfers | (33,028) | 85,995 | ||
Ending balance | (5,696,050) | (5,256,728) | ||
Net balance | R$ 769805 | R$ 960588 | R$ 896439 | |
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) R$ in Thousands | Dec. 31, 2018BRL (R$) |
Property, Plant and Equipment [Abstract] | |
Residual balance of returnable assets | R$ 8218006 |
Intangible Assets (Detail)
Intangible Assets (Detail) - BRL (R$) R$ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Intangible Assets And Goodwill [Line Items] | ||||
Beginning Balance | R$ 29873574 | R$ 29463239 | ||
Additions | 341,300 | 411,828 | ||
Transfers | 0 | |||
Other | (14) | (1,493) | ||
Ending Balance | 30,214,860 | 29,873,574 | ||
Beginning Balance | (20,618,735) | (18,952,180) | ||
Amortization expenses | (1,570,683) | (1,666,608) | ||
Transfers | 53 | |||
Ending Balance | (22,189,418) | (20,618,735) | ||
Ending Balance | 8,025,442 | 9,254,839 | R$ 10511059 | |
Regulatory Licenses | ||||
Intangible Assets And Goodwill [Line Items] | ||||
Beginning Balance | [1] | 19,076,941 | 19,076,941 | |
Ending Balance | [1] | 19,076,941 | 19,076,941 | |
Beginning Balance | [1] | (11,096,802) | (10,071,364) | |
Amortization expenses | [1] | (1,001,234) | (1,025,438) | |
Ending Balance | [1] | (12,098,036) | (11,096,802) | |
Ending Balance | [1] | R$ 6978905 | 7,980,139 | 9,005,577 |
Annual amortization rate (average) | [1] | 10.00% | ||
Intangibles in Progress | ||||
Intangible Assets And Goodwill [Line Items] | ||||
Beginning Balance | R$ 17047 | 112,842 | ||
Additions | 263,305 | 332,500 | ||
Transfers | (253,143) | (428,295) | ||
Other | (14) | |||
Ending Balance | 27,195 | 17,047 | ||
Ending Balance | 27,195 | 17,047 | 112,842 | |
Data Processing | ||||
Intangible Assets And Goodwill [Line Items] | ||||
Beginning Balance | 8,743,013 | 8,301,630 | ||
Additions | 4,524 | 4,356 | ||
Transfers | 234,157 | 438,138 | ||
Other | (1,111) | |||
Ending Balance | 8,981,694 | 8,743,013 | ||
Beginning Balance | (7,673,194) | (7,148,833) | ||
Amortization expenses | (443,268) | (524,414) | ||
Transfers | 53 | |||
Ending Balance | (8,116,462) | (7,673,194) | ||
Ending Balance | R$ 865232 | 1,069,819 | 1,152,797 | |
Annual amortization rate (average) | 20.00% | |||
Other | ||||
Intangible Assets And Goodwill [Line Items] | ||||
Beginning Balance | R$ 2036573 | 1,971,826 | ||
Additions | 73,471 | 74,972 | ||
Transfers | 18,986 | (9,843) | ||
Other | (382) | |||
Ending Balance | 2,129,030 | 2,036,573 | ||
Beginning Balance | (1,848,739) | (1,731,983) | ||
Amortization expenses | (126,181) | (116,756) | ||
Ending Balance | (1,974,920) | (1,848,739) | ||
Ending Balance | R$ 154110 | R$ 187834 | R$ 239843 | |
Annual amortization rate (average) | 16.00% | |||
[1] | Includes mainly the fair value of intangible assets related to purchase of control of BrT (now Oi, S.A.). |
Trade Payables - Summary of Tra
Trade Payables - Summary of Trade payable (Detail) - BRL (R$) R$ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounts Payable [Line Items] | |||
Liabilities subject to compromise | R$ 2139312 | ||
Total trade payables | R$ 8818870 | 5,170,970 | |
Current | 5,225,862 | 5,170,970 | |
Non-current | 3,593,008 | ||
Trade payables subject to the Judicial Reorganization | [1] | 3,794,610 | 246,472 |
Trade payables not subject to the Judicial Reorganization | 5,024,260 | 4,924,498 | |
Infrastructure, network and plant maintenance materials | |||
Accounts Payable [Line Items] | |||
Total trade payables | 2,861,712 | 2,658,436 | |
Services | |||
Accounts Payable [Line Items] | |||
Total trade payables | 3,397,413 | 3,964,912 | |
Rental of polls and rights-of-way | |||
Accounts Payable [Line Items] | |||
Total trade payables | 191,723 | 399,996 | |
ANATEL AGU | |||
Accounts Payable [Line Items] | |||
Total trade payables | 7,147,137 | ||
Trade Notes, Accounts Payable and Other Liabilities | |||
Accounts Payable [Line Items] | |||
Total trade payables | 647,856 | 293,478 | |
Adjustment to present value | |||
Accounts Payable [Line Items] | |||
Total trade payables | R$ 5426971 | ||
Liabilities Subject To Compromise [Member] | |||
Accounts Payable [Line Items] | |||
Liabilities subject to compromise | R$ 2145852 | ||
[1] | Certain amounts initially recorded as liabilities subject to compromise (Note 29) were adjusted and reclassified to reflect the new legal terms and conditions established by the JRP Court. |
Borrowing And Financing - Sched
Borrowing And Financing - Schedule of Non current Liabilities (Detail) - BRL (R$) R$ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Receivables [Line Items] | ||
Collateralized claims | R$ 3616074 | |
Restructuring | 14,993,376 | |
Local currency | 8,640,054 | |
Subtotal | 30,390,692 | |
Incurred debt issuance cost | (12,126) | |
Present value adjustment | (13,928,660) | |
Total | 16,449,906 | |
Current | 672,894 | R$ 54251 |
Non-current | 15,777,012 | |
Senior Notes [Member] | ||
Receivables [Line Items] | ||
Senior notes | 7,068,263 | |
Overall Offer [Member] | ||
Receivables [Line Items] | ||
Currency | 4,332,352 | |
Foreign Currency [Member] | ||
Receivables [Line Items] | ||
Currency | 6,353,322 | |
Foreign Currency [Member] | Senior Notes [Member] | ||
Receivables [Line Items] | ||
Senior notes | R$ 7068263 | |
Contractual Maturity Start Date | Jul. 31, 2025 | |
Interest Rate Description | Semiannual | |
Foreign Currency [Member] | Overall Offer [Member] | ||
Receivables [Line Items] | ||
Currency | R$ 4125317 | |
Contractual Maturity Start Date | Feb. 28, 2038 | |
Contractual Maturity End Date | Feb. 28, 2042 | |
Non Qualified Bondholders [Member] | ||
Receivables [Line Items] | ||
Non-qualified bondholders | R$ 326376 | |
Contractual Maturity Start Date | Aug. 31, 2024 | |
Contractual Maturity End Date | Feb. 28, 2030 | |
Interest Rate Description | Semiannual | |
BNDES [Member] | ||
Receivables [Line Items] | ||
Collateralized claims | R$ 3616074 | |
Contractual Maturity Start Date | Mar. 31, 2024 | |
Contractual Maturity End Date | Feb. 28, 2033 | |
Interest Rate Description | Monthly | |
Debentures [Member] | ||
Receivables [Line Items] | ||
Local currency | R$ 6788519 | |
Contractual Maturity Start Date | Aug. 31, 2023 | |
Contractual Maturity End Date | Feb. 28, 2035 | |
Interest Rate Description | Semiannual | |
Other | ||
Receivables [Line Items] | ||
Local currency | R$ 1851535 | |
Contractual Maturity Start Date | Aug. 31, 2023 | |
Contractual Maturity End Date | Feb. 28, 2035 | |
Interest Rate Description | Semiannual | |
Local Currency Financial Institution [Member] | ||
Receivables [Line Items] | ||
Currency | R$ 54251 | |
Contractual Maturity Start Date | Jan. 31, 2019 | |
Contractual Maturity End Date | Dec. 31, 2033 | |
Interest Rate Description | Monthly | |
Local Currency [Member] | Overall Offer [Member] | ||
Receivables [Line Items] | ||
Currency | R$ 207035 | |
Contractual Maturity Start Date | Feb. 28, 2038 | |
Contractual Maturity End Date | Feb. 28, 2042 | |
Interest Rate Description | Single installment |
Borrowing And Financing - Sch_2
Borrowing And Financing - Schedule of Debt Breakdown Per Currency (Detail) R$ in Thousands | Dec. 31, 2018BRL (R$) |
Debt and Financial Instruments [Line Items] | |
Long term debt | R$ 16449906 |
Euro | |
Debt and Financial Instruments [Line Items] | |
Long term debt | 198,931 |
US dollar | |
Debt and Financial Instruments [Line Items] | |
Long term debt | 8,617,835 |
Brazilian reais | |
Debt and Financial Instruments [Line Items] | |
Long term debt | R$ 7633140 |
Borrowing And Financing - Sch_3
Borrowing And Financing - Schedule of Debt Breakdown Per Index (Detail) R$ in Thousands | 12 Months Ended |
Dec. 31, 2018BRL (R$) | |
Debt and Financial Instruments [Line Items] | |
Debt Instrument, Interest Rate During Period | 7.00% |
Long term debt | R$ 16449906 |
Certificates of Deposit | |
Debt and Financial Instruments [Line Items] | |
Long term debt | 3,949,639 |
Fixed Rate | |
Debt and Financial Instruments [Line Items] | |
Long term debt | R$ 8562117 |
TJLP | |
Debt and Financial Instruments [Line Items] | |
Debt Instrument, Interest Rate During Period | 2.95% |
Long term debt | R$ 3614820 |
TR | |
Debt and Financial Instruments [Line Items] | |
Debt Instrument, Interest Rate During Period | 0.00% |
Long term debt | R$ 14430 |
Other | |
Debt and Financial Instruments [Line Items] | |
Debt Instrument, Interest Rate During Period | 0.00% |
Long term debt | R$ 308900 |
Minimum | Certificates of Deposit | |
Debt and Financial Instruments [Line Items] | |
Debt Instrument, Interest Rate During Period | 0.75% |
Minimum | Fixed Rate | |
Debt and Financial Instruments [Line Items] | |
Debt Instrument, Interest Rate During Period | 1.75% |
Maximum | Certificates of Deposit | |
Debt and Financial Instruments [Line Items] | |
Debt Instrument, Interest Rate During Period | 1.83% |
Maximum | Fixed Rate | |
Debt and Financial Instruments [Line Items] | |
Debt Instrument, Interest Rate During Period | 10.00% |
Borrowing And Financing - Long-
Borrowing And Financing - Long-term Debt Maturity (Detail) R$ in Thousands | Dec. 31, 2018BRL (R$) |
Debt Disclosure [Abstract] | |
Long-term debt maturity in 2020 | R$ 10958 |
Long-term debt maturity in 2021 | 3,953 |
Long-term debt maturity in 2022 | 970 |
Long-term debt maturity in 2023 | 295,155 |
Long-term debt maturity in 2024 and following years | 29,405,472 |
Total long term debt | R$ 29716508 |
Borrowing And Financing - Addit
Borrowing And Financing - Additional Information (Detail) R$ in Millions | Dec. 31, 2018BRL (R$) |
Debt Disclosure [Abstract] | |
Total amount of guarantees provided as collateral for subsidiaries' financings | R$ 2712 |
Licenses and Concessions Paya_3
Licenses and Concessions Payable - Schedule of Licenses and Concessions Payable (Detail) - BRL (R$) R$ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Liabilities Subject To Compromise Disclosures [Line Items] | ||
Licenses and concessions payable | R$ 85619 | R$ 20910 |
Licenses and concessions payable, current | 85,619 | 20,306 |
Licenses and concessions payable, non current | 604 | |
Personal Mobile Services - SMP | ||
Liabilities Subject To Compromise Disclosures [Line Items] | ||
Licenses and concessions payable | 1,025 | 4,649 |
STFC Concessions | ||
Liabilities Subject To Compromise Disclosures [Line Items] | ||
Licenses and concessions payable | R$ 84594 | R$ 16261 |
Tax Financing Program - Summary
Tax Financing Program - Summary of Outstanding Balance of Tax Debt Refinancing Program (Detail) - BRL (R$) R$ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Tax debt refinancing program payable | R$ 553206 | R$ 888777 |
Tax debt refinancing program payable, current | 142,036 | 278,277 |
Tax debt refinancing program payable, Non-current | 411,170 | 610,500 |
Law 11941/09 and Law 12865/2013 tax financing program | ||
Debt Instrument [Line Items] | ||
Tax debt refinancing program payable | 496,240 | 638,409 |
REFIS II - PAES | ||
Debt Instrument [Line Items] | ||
Tax debt refinancing program payable | 4,336 | |
PRT (MP 766/2017) | ||
Debt Instrument [Line Items] | ||
Tax debt refinancing program payable | 54,528 | 233,051 |
PERT (LAW 13496/2017) | ||
Debt Instrument [Line Items] | ||
Tax debt refinancing program payable | R$ 2438 | R$ 12981 |
Tax Financing Program - Schedul
Tax Financing Program - Schedule of Components of Tax Debt Refinancing Program (Detail) - BRL (R$) R$ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Principal | R$ 170604 | |
Fines | 10,614 | |
Interest | 371,988 | |
Total | 553,206 | R$ 888777 |
Tax on revenue (COFINS) | ||
Debt Instrument [Line Items] | ||
Principal | 42,921 | |
Interest | 156,674 | |
Total | 199,595 | 299,533 |
Income Tax | ||
Debt Instrument [Line Items] | ||
Principal | 5,873 | |
Interest | 39,094 | |
Total | 44,967 | 68,285 |
Tax on revenue (PIS) | ||
Debt Instrument [Line Items] | ||
Principal | 44,043 | |
Interest | 35,842 | |
Total | 79,885 | 89,954 |
Social security (INSS - SAT) | ||
Debt Instrument [Line Items] | ||
Principal | 1,018 | |
Fines | 1,342 | |
Interest | 2,414 | |
Total | 4,774 | 8,450 |
Social Contribution | ||
Debt Instrument [Line Items] | ||
Principal | 754 | |
Fines | 323 | |
Interest | 11,426 | |
Total | 12,503 | 17,339 |
Tax on banking transactions (CPMF) | ||
Debt Instrument [Line Items] | ||
Principal | 19,014 | |
Fines | 2,142 | |
Interest | 28,976 | |
Total | 50,132 | 49,268 |
PRT - Other Debts - RFB | ||
Debt Instrument [Line Items] | ||
Principal | 26,685 | |
Fines | 2,374 | |
Interest | 25,469 | |
Total | 54,528 | 227,261 |
PRT - Social Security - INSS | ||
Debt Instrument [Line Items] | ||
Total | 5,790 | |
PERT - Other Debts - RFB | ||
Debt Instrument [Line Items] | ||
Principal | 1,146 | |
Interest | 1,292 | |
Total | 2,438 | 12,981 |
Other | ||
Debt Instrument [Line Items] | ||
Principal | 29,150 | |
Fines | 4,433 | |
Interest | 70,801 | |
Total | R$ 104384 | R$ 109916 |
Tax Financing Program - Sched_2
Tax Financing Program - Schedule of Future Payment of Tax Financing Program (Detail) - BRL (R$) R$ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Maturities of Long-term Debt [Abstract] | ||
2019 | R$ 142036 | |
2020 | 85,070 | |
2021 | 85,070 | |
2022 | 85,070 | |
2023 | 85,070 | |
2024 to 2025 | 70,890 | |
Total | R$ 553206 | R$ 888777 |
Tax Financing Program - Additio
Tax Financing Program - Additional Information (Detail) | 12 Months Ended | |
Dec. 31, 2018BRL (R$)Installment | Dec. 31, 2017BRL (R$) | |
Debt Instrument [Line Items] | ||
Percentage of tax debts settled in cash | 70.00% | |
PERT (LAW 13496/2017) | ||
Debt Instrument [Line Items] | ||
Tax debts offset by loss carry forwards | R$ 21000000 | |
Tax debts settled in cash | R$ 15000000.00 | |
Percentage of tax debts settled in cash | 5.00% | |
PRT (MP 766/2017) | ||
Debt Instrument [Line Items] | ||
Percentage of tax debts that can be offset against own tax carry forwards | 76.00% | |
Tax debts offset by loss carry forwards | R$ 1035000000 | R$ 1035000000 |
Percentage of remaining tax debts that can be offset against own tax carry forwards | 24.00% | |
Tax debts settled in cash | R$ 327000000 | |
Number of installments | Installment | 24 |
Provision for Contingencies - P
Provision for Contingencies - Provision for Contingencies by Nature (Detail) - BRL (R$) R$ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Loss Contingencies [Line Items] | |||||
Provision for contingencies | R$ 5038720 | R$ 1368435 | R$ 1129074 | ||
Current | 680,542 | ||||
Non-current | 4,358,178 | 1,368,435 | |||
Labor contingencies | |||||
Loss Contingencies [Line Items] | |||||
Provision for contingencies | 1,457,181 | 697,190 | 543,026 | ||
Tax contingencies | |||||
Loss Contingencies [Line Items] | |||||
Provision for contingencies | 650,083 | 660,304 | 576,133 | ||
Civil contingencies | |||||
Loss Contingencies [Line Items] | |||||
Provision for contingencies | R$ 2931456 | [1] | R$ 10941 | [1] | R$ 9915 |
[1] | Includes R$157,809 related to the agreement entered into with Pharol, as described in Note 30. |
Provision for Contingencies -_2
Provision for Contingencies - Provision for Contingencies by Nature (Parenthetical) (Detail) - BRL (R$) R$ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Loss Contingencies [Line Items] | ||
Provisions for civil contingencies | R$ 9333795 | |
Pharol | ||
Loss Contingencies [Line Items] | ||
Provisions for civil contingencies | R$ 157809 |
Provision for Contingencies - S
Provision for Contingencies - Summary of Activity of Contingency Provision (Detail) - BRL (R$) R$ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | |||
Loss Contingency Accrual [Roll Forward] | ||||
Beginning Balance | R$ 1368435 | R$ 1129074 | ||
Monetary variation | [1] | 119,013 | 264,511 | |
Additions/(reversals) | [1] | 26,606 | 143,517 | |
Write-offs for payment/terminations | [2] | (657,823) | (168,667) | |
Reclassification from liabilities subjected to compromise | 4,182,489 | |||
Ending Balance | 5,038,720 | 1,368,435 | ||
Labor contingencies | ||||
Loss Contingency Accrual [Roll Forward] | ||||
Beginning Balance | 697,190 | 543,026 | ||
Monetary variation | [1] | 22,244 | 162,695 | |
Additions/(reversals) | [1] | (57,200) | 92,803 | |
Write-offs for payment/terminations | [2] | (241,225) | (101,334) | |
Reclassification from liabilities subjected to compromise | 1,036,172 | |||
Ending Balance | 1,457,181 | 697,190 | ||
Tax contingencies | ||||
Loss Contingency Accrual [Roll Forward] | ||||
Beginning Balance | 660,304 | 576,133 | ||
Monetary variation | [1] | 77,697 | 99,902 | |
Additions/(reversals) | [1] | (49,659) | 49,616 | |
Write-offs for payment/terminations | [2] | (38,259) | (65,347) | |
Ending Balance | 650,083 | 660,304 | ||
Civil contingencies | ||||
Loss Contingency Accrual [Roll Forward] | ||||
Beginning Balance | 10,941 | [3] | 9,915 | |
Monetary variation | [1] | 19,072 | 1,914 | |
Additions/(reversals) | [1] | 133,465 | 1,098 | |
Write-offs for payment/terminations | [2] | (378,339) | (1,986) | |
Reclassification from liabilities subjected to compromise | 3,146,317 | |||
Ending Balance | [3] | R$ 2931456 | R$ 10941 | |
[1] | The Company has been continually monitoring its proceedings, as well as the reprocessing of the provision estimation model taking into account the new profile and history of discontinuation of lawsuits in the context of the approval and Ratification of the JRP. Accordingly, the Company reversed the provision for contingencies and the related monetary variation. | |||
[2] | This line item basically includes the amounts related to proceedings terminated and included in the list of the Company's judicial reorganization creditors, which were transferred to the line item trade payables and will be paid according to the terms of the JRP. | |||
[3] | Includes R$157,809 related to the agreement entered into with Pharol, as described in Note 30. |
Provision for Contingencies - A
Provision for Contingencies - Additional Information (Detail) - BRL (R$) R$ in Thousands | Jun. 30, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Loss Contingencies [Line Items] | ||||
Provision for contingencies | R$ 5038720 | R$ 1368435 | R$ 1129074 | |
Contingent liabilities with possible unfavorable outcome | 30,080,186 | 26,420,386 | ||
Adjusted amount of contracted bonds and guarantee insurances | 13,750,739 | 14,847,243 | ||
ANATEL | ||||
Loss Contingencies [Line Items] | ||||
Aggregate amount of the contingencies for claims | R$ 14500000 | |||
Provision for contingencies | 580,000 | |||
INSS (joint liability, fees, and severance pay) | ||||
Loss Contingencies [Line Items] | ||||
Contingent liabilities with possible unfavorable outcome | 695,249 | 573,619 | ||
Federal Taxes | ||||
Loss Contingencies [Line Items] | ||||
Contingent liabilities with possible unfavorable outcome | 10,862,077 | 10,483,828 | ||
State VAT (ICMS) | ||||
Loss Contingencies [Line Items] | ||||
Contingent liabilities with possible unfavorable outcome | 12,523,402 | 11,730,162 | ||
Tax on services (ISS) | ||||
Loss Contingencies [Line Items] | ||||
Contingent liabilities with possible unfavorable outcome | R$ 3505366 | R$ 3387630 | ||
Eligible claims | ANATEL | ||||
Loss Contingencies [Line Items] | ||||
Aggregate amount of the contingencies for claims | 8,400,000 | |||
Non-liquid claims | ANATEL | ||||
Loss Contingencies [Line Items] | ||||
Aggregate amount of the contingencies for claims | R$ 6100000 |
Provision for Contingencies - C
Provision for Contingencies - Contingent Liabilities, By Nature (Detail) - BRL (R$) R$ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Loss Contingencies [Line Items] | ||
Contingent liabilities with possible unfavorable outcome | R$ 30080186 | R$ 26420386 |
Labor contingencies | ||
Loss Contingencies [Line Items] | ||
Contingent liabilities with possible unfavorable outcome | 770,982 | 53,328 |
Tax contingencies | ||
Loss Contingencies [Line Items] | ||
Contingent liabilities with possible unfavorable outcome | 27,586,094 | 26,175,239 |
Civil contingencies | ||
Loss Contingencies [Line Items] | ||
Contingent liabilities with possible unfavorable outcome | R$ 1723110 | R$ 191819 |
Other Payables (Detail)
Other Payables (Detail) - BRL (R$) R$ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Other Liabilities Disclosure [Abstract] | ||
Provisions for indemnities payable | R$ 676984 | R$ 607559 |
Third party consignment | 56,302 | 35,293 |
Provision for asset decommissioning | 17,410 | 16,716 |
Other | 510,865 | 392,832 |
Total | 1,261,561 | 1,052,400 |
Other payables, current | 629,939 | 469,214 |
Other payables, non-current | R$ 631622 | R$ 583186 |
Unearned Revenues - Schedule of
Unearned Revenues - Schedule of Unearned revenue (Detail) - BRL (R$) R$ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Total | R$ 1916570 | R$ 1772828 |
Current | 229,497 | 139,012 |
Non-current | 1,687,073 | 1,633,816 |
Infrastructure Assets | ||
Total | 1,596,238 | 1,661,236 |
Service Installation Fees | ||
Total | 159,345 | |
Other | ||
Total | R$ 160987 | R$ 111592 |
Shareholders' Equity (Deficit_2
Shareholders' Equity (Deficit) - Additional Information (Detail) | Jan. 28, 2019BRL (R$)shares | Jan. 25, 2019BRL (R$)shares | Jan. 21, 2019BRL (R$)shares | Jan. 16, 2019shares | Jan. 11, 2019BRL (R$)shares | Jan. 04, 2019shares | Oct. 28, 2018shares | Jul. 28, 2018USD ($)shares | Jul. 27, 2018BRL (R$)shares | Jul. 20, 2018BRL (R$)shares | Dec. 31, 2018BRL (R$)shares | Dec. 31, 2018BRL (R$) | Dec. 31, 2017BRL (R$) |
Shareholders Equity [Line Items] | |||||||||||||
Common stock issued | 1,514,299,603 | 1,514,299,603 | 115,913,355 | ||||||||||
Capitalization Of claims | $ 10,600,097,221 | R$ 10600097000 | |||||||||||
Fair value of shares issued | R$ | R$ 11613980000 | R$ 4000000000 | |||||||||||
Common shares issued for warrants exercised | 115,913,355 | ||||||||||||
Subscribed and paid-in capital | R$ | R$ 32038471000 | R$ 32038471000 | R$ 21438374000 | ||||||||||
New Common Shares subscribed | 68,263 | ||||||||||||
Fair value measurements valuation process description | For measurement purposes of the amount recognized for each of the transactions qualifiable as an equity instrument, referred to above, the Company hired an independent specialized consulting firm to estimate the fair value of the stock, using discounted cash flow valuation methodology (fair value hierarchy, Level 3), considering the following main assumptions: (i) variable discount rate: in reais (BRL) in nominal terms, according to the CAPM methodology, variable due to year-on-year changes in debt / equity ratio ranging from 14.0% to 16.4%; (ii) terminal growth rate of 4.0% , according to long-term Brazilian inflation, projected by the Central Bank. | ||||||||||||
Fair value terminal growth rate | 4.00% | ||||||||||||
Treasury stock reissued, shares | 116,251,405,000 | ||||||||||||
Subsequent Event | |||||||||||||
Shareholders Equity [Line Items] | |||||||||||||
Common stock issued | 3,225,806,451 | 3,225,806,451 | 91,322,933 | 1,530,457,356 | 275,985 | ||||||||
New Common Shares subscribed | 1,604,268,162 | 1,604,268,162 | |||||||||||
Defined Contribution Plan, Cost | R$ | R$ 4000000000.00 | R$ 4000000000.00 | R$ 113000000 | R$ 1897767121.44 | |||||||||
Subscription Rights [Member] | Subsequent Event | |||||||||||||
Shareholders Equity [Line Items] | |||||||||||||
Common stock issued | 91,080,933 | 1,530,457,356 | |||||||||||
Defined Contribution Plan, Cost | R$ | R$ 2011000000 | ||||||||||||
Minimum | |||||||||||||
Shareholders Equity [Line Items] | |||||||||||||
Debt - equity ratio | 0.140 | 0.140 | |||||||||||
Maximum | |||||||||||||
Shareholders Equity [Line Items] | |||||||||||||
Debt - equity ratio | 0.164 | 0.164 | |||||||||||
Treasury Shares [Member] | |||||||||||||
Shareholders Equity [Line Items] | |||||||||||||
Treasury stock reissued, Value | R$ | R$ 2727842000 | R$ 2727842000 |
Shareholders' Equity (Deficit_3
Shareholders' Equity (Deficit) - Share Capital (Detail) - shares shares in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Class of Stock [Line Items] | ||
Common shares | 2,298,247 | 668,034 |
Preferred shares | 157,727 | 157,727 |
Total | 2,455,974 | 825,761 |
Treasury shares | 33,842 | 150,094 |
Common shares outstanding | 2,266,217 | 519,752 |
Preferred shares outstanding | 155,915 | 155,915 |
Total outstanding shares | 2,422,132 | 675,667 |
Common Stock | ||
Class of Stock [Line Items] | ||
Treasury shares | 32,030 | 148,282 |
Preferred Stock | ||
Class of Stock [Line Items] | ||
Treasury shares | 1,812 | 1,812 |
Shareholders' Equity (Deficit_4
Shareholders' Equity (Deficit) - Summary of Calculations of Basic and Diluted Loss Per Share (Detail) - BRL (R$) R$ / shares in Units, shares in Thousands, R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||
Net income (loss) attributable to owners of the Company | R$ 27369422 | R$ 3736518 | R$ 15502132 |
Common Stock | |||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||
Net income (loss) attributable to owners of the Company | R$ 24525692 | R$ 2874290 | R$ 11924904 |
Weighted average number of outstanding shares, basic and diluted | 1,344,686 | 519,752 | 519,752 |
Net income (loss) per share, basic and diluted | R$ 18.24 | R$ 5.53 | R$ 22.94 |
Preferred Stock | |||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||
Net income (loss) attributable to owners of the Company | R$ 2843730 | R$ 862228 | R$ 3577228 |
Weighted average number of outstanding shares, basic and diluted | 155,915 | 155,915 | 155,915 |
Net income (loss) per share, basic and diluted | R$ 18.24 | R$ 5.53 | R$ 22.94 |
Shareholders' Equity (Deficit_5
Shareholders' Equity (Deficit) - Movement of Capital Reserve (Detail) - BRL (R$) shares in Thousands, R$ in Thousands | Jul. 20, 2018 | Dec. 31, 2018 |
Class of Stock [Line Items] | ||
New I Common Shares | R$ 11613980 | R$ 4000000 |
Senior Notes [Member] | ||
Class of Stock [Line Items] | ||
New I Common Shares | 10,070,116 | |
Delivery of treasury shares | R$ 773072 | |
Subscription Warrants | 770,792 | |
Balance at Dec 31, 2018 | R$ 11613980 |
Provision for Pension Plan - Un
Provision for Pension Plan - Underfunded Status (Detail) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2018 | ||
Defined Benefit Plan Disclosure [Line Items] | |||
Total unfunded status | R$ 632420 | R$ 579122 | |
Reclassification to liabilities subject to compromise | (560,046) | ||
Defined benefit plans | 72,374 | 579,122 | |
BrTPREV Plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plans | 629,120 | ||
BrTPREV Plans | Financing Obligation | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plans | [1] | 574,725 | |
PAMEC Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plans | R$ 3300 | R$ 4397 | |
[1] | Represented by the financial obligations agreement, 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 commitment under the terms of the JRP. |
Provision for Pension Plan - Ov
Provision for Pension Plan - Over Funded Status (Detail) - BRL (R$) R$ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Defined Benefit Plan Disclosure [Line Items] | ||
Total | R$ 758707 | R$ 1700472 |
Current | 4,880 | 1,080 |
Non-current | 753,827 | 1,699,392 |
TCSPREV plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total | 364,552 | 1,329,931 |
TelemarPrev Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total | 343,286 | 317,500 |
PBS-Telemar Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total | R$ 50869 | R$ 53041 |
Provision for Pension Plan - Ad
Provision for Pension Plan - Additional Information (Detail) - BRL (R$) R$ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Oct. 31, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Transferred amount related to plan sponsored by company | R$ 758707 | R$ 1700472 | ||
Deferred Profit Sharing [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Provisions for employee profit sharing | R$ 265753 | 309,744 | R$ 74211 | |
Sistel | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Surpluses of benefit plan amount | R$ 3042000 | |||
Transferred amount related to plan sponsored by company | R$ 2127000 | |||
BrTPREV Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined contribution pension Benefit Plan, description | The monthly, mandatory Basic Contribution of the Active Participants of the TCSPREV and BrTPREV (merged plan) groups corresponds to the outcome obtained by applying a percentage that may range from 3% to 8% on the Contribution Salary (PS), pursuant to the age and option of each Participant. The Plan's Charter provides for contribution parity by the Participants and the Sponsors. | |||
Transferred amount related to plan sponsored by company | 1,895,591 | 1,806,042 | ||
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% 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 capital formation approach. | |||
Transferred amount related to plan sponsored by company | R$ 379998 | R$ 360700 | 314,203 | |
Allocation of plan assets | 100.00% | |||
Mathematical reserves, annual readjustment interest rate | 6.00% | |||
PBS-Telemar Plan | Debt Securities | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Allocation of plan assets | 90.00% | |||
PBS-Telemar Plan | Exclusive Investment Funds | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Allocation of plan assets | 6.65% | |||
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. Nonrecurring extraordinary contributions from a participant are also optional and cannot be lower than 5% of the Contribution Salary ceiling. | |||
Maximum limit of contribution salary | 8.00% | |||
Transferred amount related to plan sponsored by company | R$ 4508570 | R$ 4142553 | R$ 3853595 | |
Allocation of plan assets | 100.00% | |||
TelemarPrev Plan | Debt Securities | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Allocation of plan assets | 93.00% | |||
TelemarPrev Plan | Exclusive Investment Funds | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Allocation of plan assets | 4.21% | |||
TelemarPrev Plan | Exclusive Investment Funds | BRAZIL | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Allocation of plan assets | 4.00% | |||
TelemarPrev Plan | Real Estate And Other | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Allocation of plan assets | 3.00% | |||
Pbs Tnc Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined contribution pension Benefit Plan, description | The contributions from Active Participants of the PBS-TNC Benefit Plan correspond to the sum of: (i) 0.28% to 0.85% of the Contribution Salary (according to the participant’s age on enrollment date); (ii) 0.57% of Contribution Salary that exceeds half of one Standard Unit; and (iii) 6.25% of the Contribution Salary that exceeds one Standard Unit. The Sponsors’ contributions are equivalent to a percentage of the payroll of the employees who are Active Plan Participants, as set on an annual basis in the Costing Plan. | |||
Celprev Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined contribution pension Benefit Plan, description | The Additional Regular Contribution corresponds The Participant's Basic Regular Contribution corresponds to the product obtained by applying a percentage ranging from 0% to 6%, in multiples of 0.5%, as elected by each participant, on the Contribution Salary exceeding 10 Plan Benchmark Units (URPs). The Sponsors contribute with an equivalent amount. | |||
Defined contribution pension benefit plan contribution percentage description | The Participant's Basic Regular Contribution corresponds to the product obtained by applying a percentage, 0%, 0.5%, 1%, 1.5% or 2%, depending on each participant's option, to his or her Contribution Salary (SP). The Sponsors contribute with an amount equivalent to such contribution, less the monthly, mandatory contribution of each Sponsor required to fund risk costs (Sick Pay Benefit). | |||
Sponsors non recurring contribution description | The Sponsor's Nonrecurring Contribution is voluntarily and corresponds to applying a percentage ranging from 50% to 150% of the aggregate Basic Regular and Additional Regular Contributions of the Sponsor, pursuant to consistent, non-discriminatory criteria, made with the frequency set by the Sponsor. | |||
Pama | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Surpluses of benefit plan amount | R$ 21542 | |||
Pbsa | Sistel | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Surpluses of benefit plan amount | R$ 2505063 |
Provision for Pension Plan - Ch
Provision for Pension Plan - Changes in Actuarial Obligations (Detail) - BRL (R$) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
TCSPREV plan | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Service cost | R$ 196000 | R$ 457000 | R$ 551000 |
Interest cost | 78,222,000 | 64,927,000 | 62,214,000 |
Benefits paid | (61,605,000) | (54,979,000) | |
Participan's contributions | 2,000 | ||
Merger plans | 1,916,410,000 | ||
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 | 625,266,000 | 572,477,000 | |
Service cost | 196,000 | 457,000 | |
Interest cost | 78,223,000 | 64,927,000 | |
Benefits paid | (61,605,000) | (54,979,000) | |
Participan's contributions | 2,000 | ||
Changes in actuarial assumptions | (12,212,000) | 42,384,000 | |
Merger plans | 2,626,646,000 | ||
Projected benefit obligation at the end of the year | 3,256,516,000 | 625,266,000 | 572,477,000 |
BrTPREV Plans | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Service cost | 74,000 | 102,000 | 138,000 |
Interest cost | 218,104,000 | 260,650,000 | 249,319,000 |
Benefits paid | (177,215,000) | (205,879,000) | |
Participan's contributions | 12,000 | ||
Merger plans | (1,916,410,000) | ||
BrTPREV 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 | 2,524,711,000 | 2,306,858,000 | |
Service cost | 74,000 | 102,000 | |
Interest cost | 218,104,000 | 260,650,000 | |
Benefits paid | (177,215,000) | (205,879,000) | |
Participan's contributions | 12,000 | ||
Changes in actuarial assumptions | 60,942,000 | 162,980,000 | |
Merger plans | (2,626,646,000) | ||
Projected benefit obligation at the end of the year | 2,524,711,000 | 2,306,858,000 | |
TelemarPrev Plan | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Service cost | 1,870,000 | 1,545,000 | 2,042,000 |
Interest cost | 362,887,000 | 397,842,000 | 350,701,000 |
Benefits paid | (272,271,000) | (263,493,000) | |
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 | 3,825,053,000 | 3,491,343,000 | |
Service cost | 1,870,000 | 1,545,000 | |
Interest cost | 362,886,000 | 397,842,000 | |
Benefits paid | (272,271,000) | (263,493,000) | |
Changes in actuarial assumptions | 247,746,000 | 197,816,000 | |
Projected benefit obligation at the end of the year | 4,165,284,000 | 3,825,053,000 | 3,491,343,000 |
PBS-Telemar Plan | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Service cost | 41,000 | 32,000 | 24,000 |
Interest cost | 29,114,000 | 32,488 | 30,475,000 |
Benefits paid | (23,441,000) | (23,158,000) | |
Participan's contributions | 34,000 | 41,000 | |
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 | 307,659,000 | 286,159,000 | |
Service cost | 41,000 | 33,000 | |
Interest cost | 29,113,000 | 32,488,000 | |
Benefits paid | (23,441,000) | (23,158,000) | |
Participan's contributions | 34,000 | 41,000 | |
Changes in actuarial assumptions | 14,723,000 | 12,096,000 | |
Projected benefit obligation at the end of the year | 328,129,000 | 307,659,000 | 286,159,000 |
PAMEC Plan | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Interest cost | 330,000 | ||
Benefits paid | (688,000) | (122,000) | |
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 | 3,300,000 | 3,276,000 | |
Interest cost | 317,000 | 378,000 | |
Benefits paid | (688,000) | (122,000) | |
Changes in actuarial assumptions | 1,468,000 | (232,000) | |
Projected benefit obligation at the end of the year | R$ 4397000 | R$ 3300000 | R$ 3276000 |
Provision for Pension Plan - Fa
Provision for Pension Plan - Fair Value of Assets (Detail) - BRL (R$) R$ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||
Fair value of plan assets at the beginning of the year | R$ 1700472 | |
Fair value of plan assets at the end of the year | 758,707 | R$ 1700472 |
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 | 1,953,967 | 1,845,367 |
Actual return on plan assets | (187,708) | 163,580 |
Company's contributions | 2 | |
Participan's contributions | 2 | |
Benefits paid | (61,605) | (54,979) |
Merger plans | 1,916,410 | |
Fair value of plan assets at the end of the year | 3,621,068 | 1,953,967 |
BrTPREV Plans | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||
Fair value of plan assets at the beginning of the year | 1,895,591 | 1,806,042 |
Actual return on plan assets | 197,994 | 295,413 |
Company's contributions | 11 | 15 |
Participan's contributions | 12 | |
Benefits paid | (177,215) | (205,879) |
Merger plans | (1,916,410) | |
Fair value of plan assets at the end of the year | 1,895,591 | |
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 | 4,142,553 | 3,853,595 |
Actual return on plan assets | 638,288 | 552,451 |
Benefits paid | (272,271) | (263,493) |
Fair value of plan assets at the end of the year | 4,508,570 | 4,142,553 |
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 | 360,700 | 314,203 |
Actual return on plan assets | 41,639 | 69,540 |
Company's contributions | 66 | 73 |
Participan's contributions | 34 | 41 |
Benefits paid | (23,441) | (23,158) |
Fair value of plan assets at the end of the year | 379,998 | 360,700 |
PAMEC Plan | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||
Company's contributions | 688 | 122 |
Benefits paid | R$ 688 | R$ 122 |
Provision for Pension Plan - _2
Provision for Pension Plan - Underfunded (overfunded) Status of Plan (Detail) - BRL (R$) R$ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
TCSPREV plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Underfunded (overfunded) status of plan | R$ 364552 | R$ 1328701 |
BrTPREV Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Underfunded (overfunded) status of plan | 629,120 | |
TelemarPrev Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Underfunded (overfunded) status of plan | (343,286) | (317,500) |
PBS-Telemar Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Underfunded (overfunded) status of plan | (50,869) | (53,041) |
PAMEC Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Underfunded (overfunded) status of plan | R$ 4397 | R$ 3300 |
Provision For Pension Plan - Ne
Provision For Pension Plan - Net Periodic Defined Pension Cost (Detail) - BRL (R$) | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
TCSPREV plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Net service cost | R$ 196000 | R$ 457000 | R$ 551000 | |
Interest cost | 78,222,000 | 64,927,000 | 62,214,000 | |
Expected return on plan assets | (195,301,000) | (220,246,000) | (193,747,000) | |
Amortization of prior year service costs (gains) | (5,636,000) | (5,636,000) | (5,636,000) | |
Net periodic pension cost (benefit) | (122,519,000) | (160,498,000) | (136,618,000) | |
TCSPREV plan | Scenario, Forecast | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Net service cost | R$ 265000 | |||
Interest cost | 287,492,000 | |||
Expected return on plan assets | (271,132,000) | |||
Amortization of prior year service costs (gains) | 46,728,000 | |||
Net periodic pension cost (benefit) | 63,353,000 | |||
BrTPREV Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Net service cost | 74,000 | 102,000 | 138,000 | |
Interest cost | 218,104,000 | 260,650,000 | 249,319,000 | |
Expected return on plan assets | (161,415,000) | (210,579,000) | (206,407,000) | |
Amortization of prior year service costs (gains) | 1,552,000 | 1,552,000 | 1,552,000 | |
Net periodic pension cost (benefit) | 58,315,000 | 51,724,000 | 44,603,000 | |
BrTPREV Plans | Scenario, Forecast | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Interest cost | 464,000 | |||
Net periodic pension cost (benefit) | 464,000 | |||
TelemarPrev Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Net service cost | 1,870,000 | 1,545,000 | 2,042,000 | |
Interest cost | 362,887,000 | 397,842,000 | 350,701,000 | |
Expected return on plan assets | (394,097,000) | (440,696,000) | (413,965,000) | |
Amortization of net actuarial losses (gains) | 32,823,000 | 16,482,000 | 4,380,000 | |
Amortization of initial transition obligation | (1,051,000) | |||
Net periodic pension cost (benefit) | 3,483,000 | (24,828,000) | (57,894,000) | |
TelemarPrev Plan | Scenario, Forecast | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Net service cost | 1,484,000 | |||
Interest cost | 370,526,000 | |||
Expected return on plan assets | (388,996,000) | |||
Amortization of net actuarial losses (gains) | 23,466,000 | |||
Net periodic pension cost (benefit) | 6,480,000 | |||
PBS-Telemar Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Net service cost | 41,000 | 32,000 | 24,000 | |
Interest cost | 29,114,000 | 32,488 | 30,475,000 | |
Expected return on plan assets | (34,332,000) | (35,817,000) | (34,872,000) | |
Net periodic pension cost (benefit) | R$ 5177000 | R$ 3297000 | (4,373,000) | |
PBS-Telemar Plan | Scenario, Forecast | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Net service cost | 32,000 | |||
Interest cost | 29,117,000 | |||
Expected return on plan assets | (33,471,000) | |||
Net periodic pension cost (benefit) | R$ 4322000 | |||
PAMEC Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Interest cost | 330,000 | |||
Net periodic pension cost (benefit) | R$ 330000 |
Provision for Pension Plan - Ac
Provision for Pension Plan - Actuarial Assumption Used to Determine Actuarial Present Value of Projected Benefit Obligation (Detail) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
TCSPREV plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rate for determining projected benefit obligations | 9.20% | 9.83% |
Expected long-term rate of return on plan assets | 9.20% | 9.83% |
Rate of compensation increase | 4.00% | 4.30% |
Inflation rate assumption used in the above | 4.00% | 4.30% |
BrTPREV and PAMEC Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rate for determining projected benefit obligations | 9.20% | 9.83% |
Expected long-term rate of return on plan assets | 9.20% | 9.83% |
Rate of compensation increase | 4.00% | 4.30% |
Inflation rate assumption used in the above | 4.00% | 4.30% |
TelemarPrev and PBS-Telemar Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rate for determining projected benefit obligations | 9.20% | 9.83% |
Expected long-term rate of return on plan assets | 9.20% | 9.83% |
Rate of compensation increase | 4.00% | 4.30% |
Inflation rate assumption used in the above | 4.00% | 4.30% |
Provision for Pension Plan - Av
Provision for Pension Plan - Average Ceilings Set For Different Type of Investment For Pension Funds (Detail) | Dec. 31, 2018 |
TCSPREV plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 100.00% |
TCSPREV plan | Fixed Income | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 86.17% |
TCSPREV plan | Fixed Income | Maximum | |
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 | 2.90% |
TCSPREV plan | Variable Income | Maximum | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 17.00% |
TCSPREV plan | Structured Investments | Maximum | |
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 | 0.85% |
TCSPREV plan | Investments abroad | Maximum | |
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 | 0.43% |
TCSPREV plan | Real Estate | Maximum | |
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 | 0.42% |
TCSPREV plan | Loans to participants | Maximum | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 15.00% |
BrTPREV Plans | Fixed Income | Maximum | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 100.00% |
BrTPREV Plans | Variable Income | Maximum | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 17.00% |
BrTPREV Plans | Structured Investments | Maximum | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 20.00% |
BrTPREV Plans | Investments abroad | Maximum | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 5.00% |
BrTPREV Plans | Real Estate | Maximum | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 8.00% |
BrTPREV Plans | Loans to participants | Maximum | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 15.00% |
PBS-Telemar Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 100.00% |
PBS-Telemar Plan | Fixed Income | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 90.48% |
PBS-Telemar Plan | Fixed Income | Maximum | |
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 | 1.30% |
PBS-Telemar Plan | Variable Income | Maximum | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 17.00% |
PBS-Telemar Plan | Structured Investments | Maximum | |
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 | 0.92% |
PBS-Telemar Plan | Investments abroad | Maximum | |
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 | 0.38% |
PBS-Telemar Plan | Real Estate | Maximum | |
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 | 0.26% |
PBS-Telemar Plan | Loans to participants | Maximum | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 15.00% |
TelemarPrev Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 100.00% |
TelemarPrev Plan | Fixed Income | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 92.51% |
TelemarPrev Plan | Fixed Income | Maximum | |
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 | 1.61% |
TelemarPrev Plan | Variable Income | Maximum | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 17.00% |
TelemarPrev Plan | Structured Investments | Maximum | |
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 | 0.79% |
TelemarPrev Plan | Investments abroad | Maximum | |
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 | 0.67% |
TelemarPrev Plan | Real Estate | Maximum | |
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 | 0.21% |
TelemarPrev Plan | Loans to participants | Maximum | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets, average ceilings | 15.00% |
Provision for Pension Plan - Al
Provision for Pension Plan - Allocation of Plan Assets (Detail) | Dec. 31, 2018 |
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 | 86.17% |
TCSPREV plan | Variable Income | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets | 2.90% |
TCSPREV plan | Exclusive Investment Funds | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets | 9.23% |
TCSPREV plan | Real Estate | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets | 0.43% |
TCSPREV plan | Investments abroad | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets | 0.85% |
TCSPREV plan | Loans to participants | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets | 0.42% |
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 | 90.48% |
PBS-Telemar Plan | Variable Income | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets | 1.30% |
PBS-Telemar Plan | Exclusive Investment Funds | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets | 6.65% |
PBS-Telemar Plan | Real Estate | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets | 0.38% |
PBS-Telemar Plan | Investments abroad | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets | 0.92% |
PBS-Telemar Plan | Loans to participants | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets | 0.26% |
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 | 92.51% |
TelemarPrev Plan | Variable Income | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets | 1.61% |
TelemarPrev Plan | Exclusive Investment Funds | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets | 4.21% |
TelemarPrev Plan | Real Estate | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets | 0.67% |
TelemarPrev Plan | Investments abroad | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets | 0.79% |
TelemarPrev Plan | Loans to participants | |
Defined Benefit Plan Disclosure [Line Items] | |
Allocation of plan assets | 0.21% |
Provision for Pension Plan - Ex
Provision for Pension Plan - Expected Contribution and Benefits (Detail) R$ in Thousands | Dec. 31, 2018BRL (R$) |
TCSPREV plan | |
Defined Benefit Plan Disclosure [Line Items] | |
2019 | R$ 263210 |
2020 | 259,437 |
2021 | 266,985 |
2022 | 274,169 |
2023 | 281,150 |
2024 until 2028 | 1,501,637 |
PBS-Telemar Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
2019 | 23,288 |
2020 | 24,127 |
2021 | 24,964 |
2022 | 25,811 |
2023 | 26,688 |
2024 until 2028 | 145,953 |
TelemarPrev Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
2019 | 275,663 |
2020 | 283,101 |
2021 | 294,351 |
2022 | 305,905 |
2023 | 317,588 |
2024 until 2028 | R$ 1773564 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2018SegmentCustomer | |
Segment Reporting Information [Line Items] | |
Number of operating segments | Segment | 1 |
Sales Revenue, Net | Customer Concentration Risk | |
Segment Reporting Information [Line Items] | |
Number of customers accounts for more than 10% | 0 |
Accounts Receivable | Customer Concentration Risk | |
Segment Reporting Information [Line Items] | |
Number of customers accounts for more than 10% | 0 |
Schedule of Segment Report Info
Schedule of Segment Report Information (Detail) - BRL (R$) R$ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Segment Information [Line Items] | ||||
Net operating revenue | R$ 22060014 | R$ 23789654 | R$ 25996423 | |
Operating (expenses) income | ||||
Depreciation and amortization | (5,952,905) | (5,881,302) | (6,310,619) | |
Allowance for doubtful accounts | (1,224,248) | (784,403) | (729,752) | |
Other operating income (expenses), net | 417,159 | (1,043,922) | (1,237,085) | |
Income (loss) before financial and taxes | 31,058,765 | (2,766,590) | (9,059,320) | |
Reorganization items, net | 31,580,541 | (2,371,918) | (9,005,998) | |
FINANCIAL INCOME (EXPENSES) | ||||
Income (loss) before income taxes | [1] | 27,046,698 | (4,378,648) | (13,434,629) |
Income tax (current and deferred) | 347,139 | 350,987 | (2,245,113) | |
Operating Segments | ||||
Segment Information [Line Items] | ||||
Net operating revenue | 21,859,853 | 23,556,940 | 25,163,552 | |
Operating (expenses) income | ||||
Depreciation and amortization | (5,881,861) | (5,803,487) | (6,128,402) | |
Interconnection | (653,867) | (771,212) | (1,141,786) | |
Personnel | (2,554,375) | (2,749,038) | (2,750,323) | |
Third-party services | (5,833,570) | (6,149,189) | (6,243,623) | |
Network maintenance services | (1,102,809) | (1,235,760) | (1,501,701) | |
Handset and other costs | (185,436) | (214,102) | (252,265) | |
Advertising and publicity | (379,676) | (410,495) | (427,463) | |
Rentals and Insurance | (4,335,892) | (4,152,521) | (4,284,672) | |
Provisions/reversals | (89,631) | (143,517) | (1,056,436) | |
Allowance for doubtful accounts | (1,062,712) | (740,575) | (622,527) | |
Impairment losses | (225,512) | |||
Taxes and other expenses | (201,296) | (277,372) | (399,123) | |
Other operating income (expenses), net | (17,610) | (1,234,477) | (132,211) | |
Income (loss) before financial and taxes | (438,882) | (324,805) | (2,492) | |
Reorganization items, net | 31,580,541 | (2,371,919) | (9,005,998) | |
FINANCIAL INCOME (EXPENSES) | ||||
Financial income | 1,042,865 | 1,331,699 | 944,611 | |
Financial expenses | (5,068,382) | (2,075,430) | (4,539,997) | |
Income (loss) before income taxes | 27,116,142 | (3,440,455) | (12,603,876) | |
Income tax (current and deferred) | 429,495 | (1,498,216) | (87,379) | |
INCOME (LOSS) FROM CONTINUING OPERATIONS | 27,545,637 | (4,938,671) | (12,691,255) | |
Operating Segments | Residential | ||||
Segment Information [Line Items] | ||||
Net operating revenue | 8,401,599 | 9,170,835 | 9,376,266 | |
Operating Segments | Personal mobility | ||||
Segment Information [Line Items] | ||||
Net operating revenue | 7,250,462 | 7,644,515 | 7,848,610 | |
Operating Segments | SMEs/Corporate | ||||
Segment Information [Line Items] | ||||
Net operating revenue | 5,980,807 | 6,485,898 | 7,606,598 | |
Operating Segments | Other services and businesses | ||||
Segment Information [Line Items] | ||||
Net operating revenue | R$ 226985 | R$ 255692 | R$ 332078 | |
[1] | At December 31, 2018, 2017 and 2016 income (loss) before income taxes and income tax (expense) benefit for continuing operations is as follows: |
Reconciliation of Revenue of th
Reconciliation of Revenue of the Segment and Total Consolidated Revenue Information (Detail) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Information [Line Items] | |||
Consolidated net operating revenue | R$ 22060014 | R$ 23789654 | R$ 25996423 |
Operating Segments | |||
Segment Information [Line Items] | |||
Consolidated net operating revenue | 21,859,853 | 23,556,940 | 25,163,552 |
Revenue related to other businesses | |||
Segment Information [Line Items] | |||
Consolidated net operating revenue | R$ 200161 | R$ 232714 | R$ 832871 |
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 (R$) R$ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Segment Information [Line Items] | ||||
Profit (loss) before taxes | [1] | R$ 27046698 | R$ 4378648 | R$ 13434629 |
Operating Segments | ||||
Segment Information [Line Items] | ||||
Profit (loss) before taxes | 27,116,142 | (3,440,455) | (12,603,876) | |
Other Businesses | ||||
Segment Information [Line Items] | ||||
Profit (loss) before taxes | R$ 69444 | R$ 938193 | R$ 830752 | |
[1] | At December 31, 2018, 2017 and 2016 income (loss) before income taxes and income tax (expense) benefit for continuing operations is as follows: |
Total Assets, Liabilities and P
Total Assets, Liabilities and Property, Plant and Equipment and Intangible Assets per Geographic Market (Detail) - BRL (R$) R$ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Information [Line Items] | |||
Total assets | R$ 67247601 | R$ 70986768 | |
Total liabilities | 38,048,105 | 80,670,829 | |
Property, plant and equipment assets | 28,468,798 | 27,083,454 | R$ 26079832 |
Intangible assets | 8,025,442 | 9,254,839 | |
BRAZIL | |||
Segment Information [Line Items] | |||
Total assets | 62,324,414 | 66,311,553 | |
Total liabilities | 42,015,131 | 80,316,703 | |
Property, plant and equipment assets | 28,360,030 | 26,934,278 | |
Intangible assets | 7,977,841 | 9,206,776 | |
Capital expenditures on tangible and intangible assets | 5,211,774 | 4,258,545 | |
Other, primarily Africa | |||
Segment Information [Line Items] | |||
Total assets | 4,923,187 | 4,675,216 | |
Total liabilities | 526,870 | 354,127 | |
Property, plant and equipment assets | 108,768 | 149,176 | |
Intangible assets | 47,601 | 48,063 | |
Capital expenditures on tangible and intangible assets | R$ 34467 | R$ 57947 |
Transactions with Joint Venture
Transactions with Joint Venture, Associates, and Unconsolidated Entities (Detail) - BRL (R$) R$ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Related Party Transaction [Line Items] | ||
Accounts receivable and other assets | R$ 6359 | R$ 5929 |
Accounts payable and other liabilities | 74,210 | 67,654 |
Revenue from services rendered | 347 | 119 |
Financial income | 430 | |
Operating costs and expenses | (236,087) | (215,079) |
Financial expenses | (167) | |
Other Entities | ||
Related Party Transaction [Line Items] | ||
Accounts receivable and other assets | 6,359 | 5,929 |
Accounts payable and other liabilities | 7,506 | 5,560 |
Revenue from services rendered | 347 | 119 |
Financial income | 430 | |
Operating costs and expenses | (28,816) | (29,856) |
Financial expenses | (9) | |
Hispamar | ||
Related Party Transaction [Line Items] | ||
Accounts payable and other liabilities | 66,704 | 62,094 |
Operating costs and expenses | (207,271) | R$ 185223 |
Financial expenses | R$ 158 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - BRL (R$) R$ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2016 | |
Officer | ||
Related Party Transaction [Line Items] | ||
Officer's compensation | R$ 81244 | R$ 49688 |
Non-Executive Committee | Maximum | ||
Related Party Transaction [Line Items] | ||
Nonrecurring compensation | R$ 15500 |
Held-For-Sale Assets - Addition
Held-For-Sale Assets - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Assets Held for Sale and Discontinued Operations [Line Items] | ||
Reimbursement cost | $ 12,000,000 | |
Interest rate | 7.00% | |
Weight average cost of capital | 17.60% | 17.10% |
Unitel S.A. ("Unitel")] | ||
Assets Held for Sale and Discontinued Operations [Line Items] | ||
Amount paid to shareholder | $ 339.4 | |
Loss due to equity interest amount | $ 314,800,000 | |
Africatel Holding BV | Minimum | ||
Assets Held for Sale and Discontinued Operations [Line Items] | ||
Weight average cost of capital | 15.30% | |
Africatel Holding BV | Maximum | ||
Assets Held for Sale and Discontinued Operations [Line Items] | ||
Weight average cost of capital | 21.20% | |
Africatel Holding BV | Unitel S.A. ("Unitel")] | ||
Assets Held for Sale and Discontinued Operations [Line Items] | ||
Percentage of ownership prior to disposal | 25.00% | |
Africatel Holding BV | OI [Member] | ||
Assets Held for Sale and Discontinued Operations [Line Items] | ||
Percentage of ownership prior to disposal | 75.00% |
Assets Held for Sale and Liabil
Assets Held for Sale and Liabilities Associated to Assets Held for Sale (Detail) - Operations in Africa - BRL (R$) R$ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | |
Discontinued Operations [Line Items] | |||
Held-for-sale assets | R$ 4923187 | R$ 4675216 | |
Cash, cash equivalents and short-term investments | 82,639 | 156,128 | |
Accounts receivable | 108,343 | 123,109 | |
Dividends receivable | [1] | 2,566,935 | 2,012,146 |
Held-for-sale financial asset | [2] | 1,843,778 | 1,965,972 |
Other assets | 145,709 | 123,865 | |
Deferred Income Tax | 54,540 | ||
Investments | 19,414 | 42,217 | |
Property, plant and equipment | 108,768 | 149,176 | |
Intangible assets | 47,601 | 48,063 | |
Liabilities directly associated to assets held for sale | 526,871 | 354,127 | |
Borrowings and financing | 188 | 260 | |
Trade payables | 52,064 | 34,407 | |
Provisions for pension plans | 366 | ||
Other liabilities | 474,619 | 319,094 | |
Non-controlling interests | [3] | 243,490 | 293,456 |
Total held for sale assets, net of the corresponding liabilities | R$ 4152826 | R$ 4027633 | |
[1] | This caption refers to the estimated recoverable amount of dividends and correspondent interests receivable from Unitel. As of December 31, 2018 gross amount of unpaid dividends by Unitel to PT Ventures totaled US$821 million and refers to the distribution of accumulated earnings in 2009 and the distribution of profits for fiscal years 2011, 2012, 2013, 2014 and 2017. In order to estimate the present value of the recoverable amount of unpaid dividends the Company takes into account (1) its legal advisors' opinion regarding the outcome of the law suits filed in a Angolan's Court and Paris' ICC to collect this amounts from Unitel, (2) the liquidity position of Unitel as of December 31, 2017, (3) the decision of Unitel to accrue interests on the delayed payments and (4) a weight average cost of capital and an interest rate for accrual of interests; | ||
[2] | Refers mainly to the fair value of the indirect interest financial investment of 25% of Unitel's share capital, classified as held for sale. As at December 31, 2018 the estimated fair value of the investment in Unitel was R$1,760 million (R$1,920 million at December 31, 2017). The fair value of this investment is computed by the Company using a discounted cash-flow methodology, which includes (1) cash flows forecasts for a seven-year period, (2) a 1.5% growth rate to extrapolate the cash flows projections (1.5% in 2017), (3) exchange rate forecasts of Angolan Kwanza and (4) a weight average cost of capital of 17.6% (17.1% in 2017), which was computed based on financial market information and on the assessment of the management regarding the business environment and relationship with the others shareholders and Unitel itself. The Company monitors and periodically updates the main assumptions used in the fair value measurement considering the changes occurred in financial market conditions and the impacts of news events related to the investment, notably the lawsuits filed against Unitel and its shareholders in Angolan Courts and ICC Paris. | ||
[3] | Represented mainly by the Samba Luxco's 14% stake in Africatel and, consequently, in its net assets. In the first quarter of 2017, the transactions provided for in the contractual instruments entered into with Samba Luxco, which reduced its stake in Africatel, while Africatel transferred to Samba Luxco its entire stake in MTC. |
Assets Held for Sale and Liab_2
Assets Held for Sale and Liabilities Associated to Assets Held for Sale (Parenthetical) (Detail) R$ in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2018BRL (R$) | Dec. 31, 2017BRL (R$) | Dec. 31, 2018USD ($) | |
Discontinued Operations [Line Items] | |||
Weight average cost of capital | 17.60% | 17.10% | |
Growth rate to extrapolate the cash flows projections | 1.50% | 1.50% | |
Unitel S.A. ("Unitel")] | |||
Discontinued Operations [Line Items] | |||
Unpaid dividends | $ | $ 821 | ||
Fair value of the investment | R$ | R$ 1760 | R$ 1920 | |
Percentage of interest in financial investment | 25.00% | 25.00% | 25.00% |
Africatel Holding BV | Samba Luxco | |||
Discontinued Operations [Line Items] | |||
Percentage of ownership after disposal | 14.00% |
Summary of Reorganization Items
Summary of Reorganization Items, Net (Detail) - BRL (R$) R$ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Reorganization Items [Abstract] | ||||
Gain on restructuring of Qualified Bonds | R$ 12881478 | |||
Adjustment to present value - Borrowings and financing | 13,928,661 | |||
Adjustment to present value - Anatel (AGU) and other payables | 5,577,234 | |||
Anatel provision for contingencies | R$ 1568798 | R$ 6604718 | ||
Other provision for contingencies | [1] | (347,437) | (1,146,458) | (2,349,898) |
Income from short-term investments | 174,281 | 713,276 | 201,533 | |
Professional fees | [2] | (633,676) | (369,938) | (252,915) |
Total reorganization items, net | R$ 31580541 | R$ 2371918 | R$ 9005998 | |
[1] | These amounts are the result of the adjustment to record contingent liabilities to their allowed claim amount which is difference than their carrying amount prior to the JR Proceedings. | |||
[2] | During the year ended December 31, 2018, 2017 and 2016 the Company incurred in R$634 million, R$370 million and R$253 million related to professional advisors who are assisting with the bankruptcy process, respectively. |
Summary of Reorganization Ite_2
Summary of Reorganization Items, Net (Parenthetical) (Detail) - BRL (R$) R$ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Reorganization Items [Line Items] | ||||
Professional fees | [1] | R$ 633676 | R$ 369938 | R$ 252915 |
Professional advisors who are assisting with the bankruptcy process | ||||
Reorganization Items [Line Items] | ||||
Professional fees | R$ 634000 | R$ 370000 | R$ 253000 | |
[1] | During the year ended December 31, 2018, 2017 and 2016 the Company incurred in R$634 million, R$370 million and R$253 million related to professional advisors who are assisting with the bankruptcy process, respectively. |
Liabilities Subject to Compro_3
Liabilities Subject to Compromise - Summary of Prepetition Liabilities Subject to Compromise (Detail) - BRL (R$) R$ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | |
Liabilities Subject to Compromise Disclosures [Abstract] | |||
Borrowings and financing | R$ 49129546 | ||
Derivative financial instrument | 104,694 | ||
Trade payables | 2,139,312 | ||
Provision for civil contingencies - Anatel | 9,333,795 | ||
Provison for pension plan | 560,046 | ||
Other | 43,334 | ||
Provision for labor contingencies | 899,226 | ||
Provision for civil - other claims | 2,929,275 | ||
Total - Liabilities subject to compromise | [1] | R$ 0 | R$ 65139228 |
[1] | The total amount of prepetition liabilities subjected to compromise differs from the R$63,960,008 amount of the Creditors List prepared by the Company and filed on May 29, 2017. Per ASC 852, prepetition liabilities subject to compromise included the best estimate, as per the criteria set forth in ASC 450, of contingencies/claims subject to compromise and that in accordance with the Brazilian Law were not included in the Creditor's List. |
Liabilities Subject to Compro_4
Liabilities Subject to Compromise - Summary of Prepetition Liabilities Subject to Compromise (Parenthetical) (Detail) R$ in Thousands | 12 Months Ended |
Dec. 31, 2018BRL (R$) | |
Liabilities Subject To Compromise Textual [Abstract] | |
Liabilities subject to compromise difference amount | R$ 63960008 |
Liabilities Subject To Compro_5
Liabilities Subject To Compromise - Schedule of Accounting Adjustments in Restructured Prepetition Liabilities (Detail) - BRL (R$) R$ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | |
Liabilities Subject To Compromise Disclosures [Line Items] | |||
Bondholders | R$ 32314638 | ||
BNDES | 3,326,952 | ||
Other Borrowings and financing | 13,487,957 | ||
Derivative financial instrument | 104,694 | ||
Trade payables | 2,139,312 | ||
Provision for civil contingencies - Anatel | 9,333,795 | ||
Provison for pension plan | 560,046 | ||
Other | 43,333 | ||
Provision for labor contingencies | 899,226 | ||
Provision for civil - other claims | 2,929,275 | ||
Total - Liabilities subject to compromise | [1] | R$ 0 | R$ 65139228 |
Bondholders | 6,712,695 | ||
BNDES - Borrowings and financing | 3,616,074 | ||
Other Borrowings and financing | 6,121,137 | ||
Anatel (AGU) and other trade payables | 3,794,610 | ||
Provison for labor, civil and Anatel contingencies | 4,388,637 | ||
Provison for pension plan | 574,725 | ||
Total - Liabilities not subject to compromise | 25,207,878 | ||
Reclassification [Member] | |||
Liabilities Subject To Compromise Disclosures [Line Items] | |||
Bondholders | (32,314,638) | ||
BNDES | (3,326,952) | ||
Other Borrowings and financing | (13,487,957) | ||
Derivative financial instrument | (104,694) | ||
Trade payables | (2,139,312) | ||
Provision for civil contingencies - Anatel | (9,333,795) | ||
Provison for pension plan | (560,046) | ||
Other | (43,333) | ||
Provision for labor contingencies | (1,036,172) | ||
Provision for civil - other claims | (2,218,538) | ||
Total - Liabilities subject to compromise | (64,565,437) | ||
Bondholders | 32,314,638 | ||
BNDES - Borrowings and financing | 3,326,952 | ||
Other Borrowings and financing | 13,592,651 | ||
Anatel (AGU) and other trade payables | 10,588,661 | ||
Provison for labor, civil and Anatel contingencies | 4,182,489 | ||
Provison for pension plan | 560,046 | ||
Total - Liabilities not subject to compromise | 64,565,437 | ||
Mediations and Other [Member] | |||
Liabilities Subject To Compromise Disclosures [Line Items] | |||
Provision for labor contingencies | 136,946 | ||
Provision for civil - other claims | (710,737) | ||
Total - Liabilities subject to compromise | (573,791) | ||
Bondholders | (161,600) | ||
Other Borrowings and financing | 50,375 | ||
Anatel (AGU) and other trade payables | 445,077 | ||
Provison for labor, civil and Anatel contingencies | 56,975 | ||
Total - Liabilities not subject to compromise | 390,827 | ||
Haircut [Member] | |||
Liabilities Subject To Compromise Disclosures [Line Items] | |||
Bondholders | [2] | (11,054,800) | |
Anatel (AGU) and other trade payables | [2] | (1,826,678) | |
Total - Liabilities not subject to compromise | [2] | (12,881,478) | |
Equity [Member] | |||
Liabilities Subject To Compromise Disclosures [Line Items] | |||
Bondholders | [3] | (11,613,980) | |
Total - Liabilities not subject to compromise | [3] | (11,613,980) | |
Fair Value [Member] | |||
Liabilities Subject To Compromise Disclosures [Line Items] | |||
Bondholders | [3] | (4,807,262) | |
Other Borrowings and financing | [3] | (9,121,399) | |
Anatel (AGU) and other trade payables | [3] | (5,577,234) | |
Total - Liabilities not subject to compromise | [3] | (19,505,895) | |
Financial Charges [Member] | |||
Liabilities Subject To Compromise Disclosures [Line Items] | |||
Bondholders | [4] | 2,035,699 | |
BNDES - Borrowings and financing | [4] | 289,122 | |
Other Borrowings and financing | [4] | 1,599,510 | |
Anatel (AGU) and other trade payables | [4] | 164,784 | |
Provison for labor, civil and Anatel contingencies | [4] | 149,173 | |
Provison for pension plan | [4] | 14,679 | |
Total - Liabilities not subject to compromise | [4] | R$ 4252967 | |
[1] | The total amount of prepetition liabilities subjected to compromise differs from the R$63,960,008 amount of the Creditors List prepared by the Company and filed on May 29, 2017. Per ASC 852, prepetition liabilities subject to compromise included the best estimate, as per the criteria set forth in ASC 450, of contingencies/claims subject to compromise and that in accordance with the Brazilian Law were not included in the Creditor's List. | ||
[2] | Represent gains on restructuring of borrowings and financings, trade payables owing to ANATEL-AGU and other trade payables, as a result of the JR Proceedings. | ||
[3] | Represent the fair value of shares issued in partial settlement of the Senior Notes (Note 22). | ||
[4] | Represent the contractual interest and foreign currency fluctuation calculated after completed the financial debt restructuring and other claims restructuring in the terms and conditions provided in the JRP. |
Liabilities Subject To Compro_6
Liabilities Subject To Compromise - Schedule of Accounting Adjustments in Restructured Prepetition Liabilities (Parenthetical) (Detail) | 12 Months Ended |
Dec. 31, 2018 | |
Minimum | |
Liabilities Subject To Compromise Disclosures [Line Items] | |
Discount rates | 12.60% |
Maximum | |
Liabilities Subject To Compromise Disclosures [Line Items] | |
Discount rates | 16.40% |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) $ in Millions | Feb. 27, 2019USD ($) | Jan. 31, 2019EUR (€) | Jan. 28, 2019BRL (R$)shares | Jan. 25, 2019BRL (R$)shares | Jan. 25, 2019USD ($)shares | Jan. 21, 2019BRL (R$)shares | Jan. 16, 2019shares | Jan. 11, 2019BRL (R$)shares | Jan. 08, 2019EUR (€)shares | Jan. 04, 2019shares | Jul. 28, 2018shares | Jul. 27, 2018shares | Jul. 20, 2018shares | Dec. 31, 2018BRL (R$)shares | Feb. 28, 2019shares | Dec. 31, 2017BRL (R$) |
Subsequent Event [Line Items] | ||||||||||||||||
Delivery of treasury shares held in treasury | 116,251,405,000 | |||||||||||||||
Provisions for civil contingencies | R$ | R$ 9333795000 | |||||||||||||||
Common stock issued | 1,514,299,603 | 1,514,299,603 | 115,913,355 | |||||||||||||
Pharol | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Provisions for civil contingencies | R$ | R$ 157809000 | |||||||||||||||
Subsequent Event | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Common stock issued | 3,225,806,451 | 3,225,806,451 | 3,225,806,451 | 91,322,933 | 1,530,457,356 | 275,985 | ||||||||||
Proceeds from issuance of common stock | R$ | R$ 4000000000.00 | R$ 4000000000.00 | R$ 113000000 | R$ 1897767121.44 | ||||||||||||
Compensation for commitments under the Commitment Agreement | $ | $ 13 | |||||||||||||||
Litigation settlement amount awarded from other party | $ | $ 653 | |||||||||||||||
Subsequent Event | Pharol | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Payment to subsidiary | € | € 25,000,000 | |||||||||||||||
Delivery of treasury shares held in treasury | 33,800,000 | |||||||||||||||
Subsequent Event | Minimum | Pharol | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Common stock shares subscribed unissued amount | € | € 25,000,000 | |||||||||||||||
Subsequent Event | PTIF | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Share issued | € | € 665,639,602.32 | |||||||||||||||
Subsequent Event | Oi Coop | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Share issued | € | € 1,100,259,843 | |||||||||||||||
Subsequent Event | Preferred Stock | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Share repurchase | 1,800,000 | |||||||||||||||
Subsequent Event | Subscription Rights [Member] | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Common stock issued | 91,080,933 | 1,530,457,356 | ||||||||||||||
Proceeds from issuance of common stock | R$ | R$ 2011000000 | |||||||||||||||
Subsequent Event | Private Placement | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Common stock issued | 272,148,705 | 272,148,705 | ||||||||||||||
Compensation for commitments under the Commitment Agreement | $ | $ 13 | |||||||||||||||
Subsequent Event | Commitment Agreement [Member] | Private Placement | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Common stock issued | 1,604,268,162 | 1,604,268,162 | ||||||||||||||
Proceeds from issuance of common stock | R$ | R$ 1989000000 | |||||||||||||||
Subsequent Event | Compensation for commitments under the Commitment Agreement [Member] | Private Placement | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Common stock issued | 272,148,705 | 272,148,705 |
Condensed Combined And Consol_3
Condensed Combined And Consolidated Debtor In-Possession Financial Information - Additional Information (Detail) - Debtor-in-Possession Financial Information - BRL (R$) R$ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Condensed Financial Statements, Captions [Line Items] | ||
Intercompany loans | R$ 45000 | R$ 5010 |
Intercompany interest and interconnection charges | R$ 3060 | R$ 5640 |
Summary of Condensed Combined a
Summary of Condensed Combined and Consolidated Balance Sheet Related to Debtor-In-Possession (Detail) - BRL (R$) R$ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current assets | ||||
Cash and cash equivalents | R$ 4385329 | R$ 6862684 | ||
Short-term investments | 201,975 | 21,447 | ||
Trade accounts receivable | 6,516,555 | 7,367,442 | ||
Inventories | 317,503 | 253,624 | ||
Recoverable taxes | 621,246 | 1,123,510 | ||
Judicial Deposits | 1,715,934 | 1,023,348 | ||
Pension plan assets | 4,880 | 1,080 | ||
Other assets | 1,079,670 | 780,627 | ||
Total current assets | 21,313,484 | 23,497,727 | ||
Non-current assets | ||||
Long-term investments | 36,987 | 114,839 | ||
Other taxes | 715,976 | 627,558 | ||
Judicial Deposits | 7,018,786 | 8,289,762 | ||
Investments | 117,840 | 136,510 | R$ 135652 | |
Property, plant and equipment, net | 28,468,798 | 27,083,454 | R$ 26079832 | |
Intangible assets | 8,025,442 | 9,254,839 | ||
Pension plan assets | 753,827 | 1,699,392 | ||
Other assets | 773,411 | 282,687 | ||
Total non-current assets | 45,934,117 | 47,489,041 | ||
Total assets | 67,247,601 | 70,986,768 | ||
Current liabilities | ||||
Trade payables | 5,225,862 | 5,170,970 | ||
Loans and financing | 672,894 | 54,251 | ||
Payroll, related taxes and benefits | 906,655 | 924,560 | ||
Current income taxes payable | 27,026 | 567,129 | ||
Tax financing program | 142,036 | 278,277 | ||
Provision for contingencies | 680,542 | |||
Dividends and interest on capital | 6,168 | 6,222 | ||
Licenses and concessions payable | 85,619 | 20,306 | ||
Other payables | 629,939 | 469,214 | ||
Total current liabilities | 10,240,070 | 9,830,504 | ||
Non-current liabilities | ||||
Loans and financing | 15,777,012 | |||
Trade payables | 3,593,008 | |||
Other taxes | 628,716 | 867,664 | ||
Deferred taxes | 497,375 | |||
Tax financing program | 411,170 | 610,500 | ||
Provision for contingencies | 4,358,178 | 1,368,435 | ||
Liability for pensions benefits | 579,122 | 72,374 | ||
Licenses and concessions payable | 604 | |||
Unearned Revenue | 1,916,570 | 1,772,828 | ||
Advance from Customer | 142,134 | 67,143 | ||
Other payables | 631,622 | 583,186 | ||
Total non-current liabilities | 27,808,035 | 5,701,097 | ||
Total liabilities subject to compromise | [1] | 0 | 65,139,228 | |
Total liabilities | 38,048,105 | 80,670,829 | ||
Shareholders' equity (deficit) | ||||
Total Share Capital | 32,038,471 | 21,438,374 | ||
Share Issued cost | (444,943) | (444,943) | ||
Treasury Share | (2,803,250) | (5,531,092) | ||
Other Comprehensive Income | (1,817,634) | (1,175,521) | ||
Accumulated losses | (14,069,804) | (42,026,880) | ||
Shareholders' equity (deficit) attributable to the Company and subsidiaries | 28,956,006 | (9,977,517) | ||
Total liabilities and shareholders' equity | 67,247,601 | 70,986,768 | ||
Debtor-in-Possession Financial Information | ||||
Current assets | ||||
Cash and cash equivalents | 4,233,558 | 6,690,900 | ||
Short-term investments | 201,975 | 14,605 | ||
Trade accounts receivable | 7,224,720 | 6,590,543 | ||
Inventories | 177,973 | 137,575 | ||
Related parts | 431,276 | 949,851 | ||
Recoverable taxes | 1,304,991 | 1,818,242 | ||
Judicial Deposits | 1,700,428 | 1,000,519 | ||
Pension plan assets | 4,824 | 1,072 | ||
Dividends and interest on capital | 14,512 | 529,934 | ||
Other assets | 1,845,235 | 1,546,295 | ||
Total current assets | 17,139,492 | 19,279,536 | ||
Non-current assets | ||||
Long-term investments | 36,987 | 114,839 | ||
Pension plan assets | 23,050 | |||
Other taxes | 714,653 | 626,057 | ||
Judicial Deposits | 6,837,701 | 8,110,179 | ||
Investments | 4,335,863 | 5,852,604 | ||
Property, plant and equipment, net | 27,965,455 | 26,561,160 | ||
Intangible assets | 7,978,956 | 9,185,107 | ||
Pension plan assets | 753,827 | 1,598,792 | ||
Other assets | 772,363 | 372,142 | ||
Total non-current assets | 49,418,855 | 52,420,878 | ||
Total assets | 66,558,347 | 71,700,415 | ||
Current liabilities | ||||
Trade payables | 6,108,115 | 6,697,217 | ||
Loans and financing | 672,894 | 530,051 | ||
Payroll, related taxes and benefits | 504,152 | 575,673 | ||
Current income taxes payable | 925,590 | 1,334,859 | ||
Tax financing program | 141,897 | 271,503 | ||
Provision for contingencies | 677,229 | |||
Dividends and interest on capital | 6,168 | 6,222 | ||
Licenses and concessions payable | 85,619 | 20,306 | ||
Other payables | 956,770 | 1,146,780 | ||
Total current liabilities | 10,078,434 | 10,582,610 | ||
Non-current liabilities | ||||
Related parts | 227,764 | 1,116,169 | ||
Loans and financing | 15,785,558 | |||
Trade payables | 3,736,117 | |||
Other taxes | 623,917 | 867,657 | ||
Deferred taxes | 497,375 | |||
Tax financing program | 410,500 | 599,047 | ||
Provision for contingencies | 3,857,871 | 617,103 | ||
Liability for pensions benefits | 579,122 | 10,433 | ||
Licenses and concessions payable | 604 | |||
Unearned Revenue | 1,531,464 | 1,596,462 | ||
Advance from Customer | 9,097 | 9,964 | ||
Other payables | 766,730 | 641,253 | ||
Total non-current liabilities | 27,528,140 | 5,956,067 | ||
Total liabilities not subject to compromise | 37,606,574 | 16,538,677 | ||
Total liabilities subject to compromise | 65,139,227 | |||
Total liabilities | 37,606,574 | 81,677,904 | ||
Shareholders' equity (deficit) | ||||
Total Share Capital | 32,038,471 | 21,438,374 | ||
Share Issued cost | (377,429) | (377,429) | ||
Capital Reserve | 11,532,995 | 13,242,374 | ||
Treasury Share | (2,803,250) | (5,531,092) | ||
Other Comprehensive Income | (207,886) | (241,780) | ||
Accumulated losses | (11,231,129) | (38,507,937) | ||
Shareholders' equity (deficit) attributable to the Company and subsidiaries | 28,951,773 | (9,977,489) | ||
Total liabilities and shareholders' equity | R$ 66558347 | R$ 71700415 | ||
[1] | The total amount of prepetition liabilities subjected to compromise differs from the R$63,960,008 amount of the Creditors List prepared by the Company and filed on May 29, 2017. Per ASC 852, prepetition liabilities subject to compromise included the best estimate, as per the criteria set forth in ASC 450, of contingencies/claims subject to compromise and that in accordance with the Brazilian Law were not included in the Creditor's List. |
Summary of Condensed Combined_2
Summary of Condensed Combined and Consolidated Debtor in-Possession Income Statement (Detail) - BRL (R$) R$ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Condensed Income Statements, Captions [Line Items] | ||||
Net operating revenue | R$ 22060014 | R$ 23789654 | R$ 25996423 | |
Cost of sales and services | (15,822,732) | (15,676,216) | (16,741,791) | |
Gross profit | 6,237,282 | 8,113,438 | 9,254,632 | |
Operating (expenses) income | ||||
Selling expenses | (4,478,352) | (4,399,936) | (4,383,163) | |
General and administrative expenses | (2,697,865) | (3,064,252) | (3,687,706) | |
Other operating income (expenses), net | 417,159 | (1,043,922) | (1,237,085) | |
Reorganization items, net | 31,580,541 | (2,371,918) | (9,005,998) | |
Income (loss) before financial and taxes | 31,058,765 | (2,766,590) | (9,059,320) | |
Financial expenses, net | (4,012,067) | (1,612,058) | (4,375,309) | |
Income (loss) before income taxes | [1] | 27,046,698 | (4,378,648) | (13,434,629) |
Income tax (current and deferred) | 347,139 | 350,987 | (2,245,113) | |
Net income (loss) for the year | 27,393,837 | (4,027,661) | R$ 15679742 | |
Debtor-in-Possession Financial Information | ||||
Condensed Income Statements, Captions [Line Items] | ||||
Net operating revenue | 21,036,018 | 20,429,388 | ||
Cost of sales and services | (10,998,010) | (15,573,190) | ||
Gross profit | 10,038,008 | 4,856,197 | ||
Operating (expenses) income | ||||
Selling expenses | (4,834,472) | (4,077,876) | ||
General and administrative expenses | (2,235,870) | (2,438,107) | ||
Other operating income (expenses), net | (4,529,992) | 118,609 | ||
Equity pickup | 570,975 | (138,999) | ||
Reorganization items, net | 31,580,541 | (2,371,919) | ||
Income (loss) before financial and taxes | 30,589,190 | (4,052,094) | ||
Financial expenses, net | (3,949,716) | (566,679) | ||
Income (loss) before income taxes | 26,639,474 | (4,618,772) | ||
Income tax (current and deferred) | 562,205 | 884,602 | ||
Net income (loss) for the year | R$ 27201679 | R$ 3734170 | ||
[1] | At December 31, 2018, 2017 and 2016 income (loss) before income taxes and income tax (expense) benefit for continuing operations is as follows: |