Equity and Remuneration to Shareholders (Tables)

12 Months Ended

Dec. 31, 2017

Summary of Share Capital for Common Shares and Preferred Shares

The Company’s issued and outstanding share capital on December 31, 2017, 2016 and 2015 is R$ 6,294, represented by 420,764,708 common shares and 838,076,946 preferred shares, all with nominal value of R$ 5.00 (five Reais), as follows:


Shareholders	Number of shares on December 31, 2017
Shareholders	Common		%		Preferred		%		Total		%
State of Minas Gerais		214,414,739		51		—		—		214,414,739		17
Other entities of Minas Gerais State		56,703		—		4,860,228		1		4,916,931		1
FIA Dinâmica Energia S.A.		41,635,754		10		62,469,590		7		104,105,344		8
Others
In Brazil		110,343,209		26		237,174,007		28		347,517,216		27
Foreign shareholders		54,314,303		13		533,573,121		64		587,887,424		47

Total		420,764,708		100		838,076,946		100		1,258,841,654		100


Shareholders	Number of shares on December 31, 2016
Shareholders	Common		%		Preferred		%		Total		%
State of Minas Gerais		214,414,739		51		—		—		214,414,739		17
Other entities of Minas Gerais State		56,703		—		4,860,228		1		4,916,931		1
AGC Energia S.A.		84,357,856		20		—		—		84,357,856		7
Other		—		—		—		—		—		—
In Brazil		112,584,011		27		252,478,755		30		365,062,766		28
Foreign shareholders		9,351,399		2		580,737,963		69		590,089,362		47

Total		420,764,708		100		838,076,946		100		1,258,841,654		100


Shareholders	Number of shares on December 31, 2015
Shareholders	Common		%		Preferred		%		Total		%
Minas Gerais State		214,414,739		51		—		—		214,414,739		17
Other entities of M.G. State		56,703		—		10,418,812		1		10,475,515		1
AGC Energia S.A.		138,700,848		33		42,671,763		5		181,372,611		15
Others
In Brazil		58,127,167		14		179,358,041		21		237,485,208		18
Foreign shareholders		9,465,251		2		605,628,330		73		615,093,581		49

Total		420,764,708		100		838,076,946		100		1,258,841,654		100

Summary of Shares used in Calculation of Basic Profit and Diluted Earnings per Share

In view of the capital increase described in more detail in subclause ‘e’ of this explanatory note, the calculation of the basic and diluted earnings taking into account the new shares that will potentially be subscribed, as follows:


Number of shares	2017			2016			2015
Common shares already paid up		420,764,708			420,764,708			420,764,708
Common shares to be paid up		66,849,505			—			—
Shares in treasury		(69	)		(69	)		(69	)

		487,614,144			420,764,639			420,764,639

Preferred shares already paid up		838,076,946			838,076,946			838,076,946
Preferred shares to be paid up		133,061,442			—			—
Shares in treasury		(560,649	)		(560,649	)		(560,649	)

		970,577,739			837,516,297			837,516,297

Total		1,458,191,883			1,258,280,936			1,258,280,936

Summary of Calculation of Basic Earnings per Share

The calculation of basic earnings per share is as follows:


	2017		2016		2015
Net income for the year		1,001		334		2,469
Minimum mandatory dividend for preferred shares from income for the period (item c)		486		204		422
Income not distributed arising from the net income for the year – preferred shares		333		87		1,221

Total of the earnings for the preferred shares (A)		819		291		1,643
Minimum mandatory dividend for the common shares		15		—		212
Income not distributed arising from the net income for the period – common shares		167		44		614

Total earnings for the common shares (B)		182		44		826
Basic earnings per preferred share ( A / number of preferred shares )		0.84		0.35		1.96
Basic earnings per common share ( B / number of common shares )		0.37		0.10		1.96

Summary of Calculation of Diluted Earnings per Share

The following shows the calculation of diluted profit per share:


	2017		2016			2015
Net income for the year		1,001		334			2,469
Total basic earnings for the preferred shares		819		291			1,643
Dilution effect related to the RME/Lepsa Option		—		(22	)		—
Dilution effect related to the Ativas Option		—		(5	)		—

Diluted earnings for the preferred shares (C)		819		264			1,643
Total earnings for the year for the common shares		182		43			826
Dilution effect related to the RME/Lepsa Option		—		(11	)		—
Dilution effect related to the Ativas Option		—		(2	)		—

Diluted earnings for the common shares (D)		182		30			826
Diluted earnings per preferred share ( C / No. of preferred shares )		0.84		0.32			1.96
Diluted earnings per common share ( D / No. of common shares )		0.37		0.07			1.96

Schedule of Capital Reserves and Profit Reserves

Capital reserves and Profit reserves are made up as follows:


Capital reserves and shares in Treasury	2017			2016			2015
Investment-related subsidies		1,857			1,857			1,857
Goodwill on issuance of shares		69			69			69
Shares in treasury		(1	)		(1	)		(1	)

		1,925			1,925			1,925

The Reserve for investment-related donations and subsidies basically refers to the compensation by the federal government for the difference between the profitability obtained by Cemig up to March 1993 and the minimum return guaranteed by the legislation in effect at the time.

The reserve for treasury shares refers to the pass-through by Finor of shares arising from funds applied in Cemig projects in the area covered by Sudene (the development agency for the Northeast) under tax incentive programs.


Profit reserves	2017		2016		2015
Legal reserve		853		853		853
Statutory Reserve		57		57		57
Retained Earnings reserve		3,341		2,813		2,906
Incentives tax reserve		58		57		50
Reserve for mandatory dividends not distributed		1,420		1,420		797

		5,729		5,200		4,663

Summary of Reserve for Obligatory Dividends Not Distributed

Reserve for mandatory dividends not distributed


	2017
Dividends withheld, arising from the net income of 2015		623
Dividends withheld, arising from the net income of 2014		797

		1,420

Schedule of Dividends Proposed for Distribution to Shareholders Based on the Profit for the Business Year

The calculation of the minimum dividends proposed for distribution to Shareholders as a result of the 2017, as mentioned in the previous paragraph, is as follows:


	2017			2016			2015
Calculation of Minimum Dividends required by the By-laws for the preferred shares
Nominal value of the preferred shares		4,191			4,190			4,190
Nominal value of the preferred shares to be capitalized		665			—			—

		4,856			4,190			4,190

Percentage applied to the nominal value of the preferred shares		10.00	%		10.00	%		10.00	%

Amount of the dividends by the First payment criterion		486			419			419
Equity		14,326			12,930			12,984
Preferred shares as a percentage of Equity (net of shares held in Treasury)		66.58	%		66.58	%		66.58	%

Portion of Equity represented by the preferred shares		9,538			8,609			8,645

Percentage applied to the portion of Equity represented by the preferred shares		3.00	%		3.00	%		3.00	%

Amount of the dividends by the Second payment criterion		286			258			259

Minimum Dividends required by the Bylaws for the preferred shares		486			419			419

Calculation of the Minimum Dividend under the by-laws based on the net income for the period
Mandatory dividend
Net income for the year		1,001			334			2,469
Mandatory dividends – 50% of Net income		500			167			1,235

Summary of Equity Valuation Adjustments


	2017			2016			2015
Deemed cost of PP&E		639			685			720
Accumulated Other Comprehensive Income
Variation in fair value of financial asset available for sale in jointly-controlled entity		—			37			18
Cumulative translation adjustments		—			—			63
Adjustments to actuarial liabilities – Employee benefits		(1,476	)		(1,211	)		(699	)

Equity valuation adjustments		(837	)		(489	)		102