EQUITY AND REMUNERATION TO SHAREHOLDERS (Tables)

12 Months Ended

Dec. 31, 2018

Summary of Share Capital for Common Shares and Preferred Shares

As of December 31, 2018, the Company’s issued and share capital is R$7,294 (6,294 at December 31, 2017 and 2016), represented by 487,614,213 common shares (420,764,708 at December 31, 2017) and 971,138,388 preferred shares (838,076,946 at December 31, 2017), both of them with nominal value of R$ 5.00 (five Reais), as follows:


Shareholders	Number of shares on December 31, 2018
Shareholders	Common		%		Preferred		%		Total		%
State of Minas Gerais		248,480,146		51		—		—		248,480,146		17
Other entities of Minas Gerais State		56,703		—		647,647		—		704,350		—
FIA Dinâmica Energia S.A.		48,200,000		10		55,905,344		6		104,105,344		7
Others
In Brazil		159,745,194		33		396,559,885		41		556,305,079		38
Foreign shareholders		31,132,170		6		518,025,512		53		549,157,682		38

Total		487,614,213		100		971,138,388		100		1,458,752,601		100


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

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

In view of the capital increase on April, 23, 2018, described above, the calculation of the basic and diluted earnings is as follows:


Number of shares	2018			2017			2016
Common shares already paid up		487,614,213			420,764,708			420,764,708
Common shares to be paid up		—			66,849,505			—
Shares in treasury		(69	)		(69	)		(69	)

		487,614,144			487,614,144			420,764,639
Preferred shares already paid up		971,138,388			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			970,577,739			837,516,297

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

Summary of Calculation of Basic Earnings per Share

The calculation of basic earnings per share is as follows:


	2018		2017		2016
Net income for the year attributed to equity holders of the parent		1,700		1,001		334
		—		—
Minimum mandatory dividend from net income for the year – preferred shares		577		486		204
Net income for the year not distributed – preferred shares		554		333		87

Total earnings – preferred shares (A)		1,131		819		291
Minimum mandatory dividend from net income for the year – common shares		290		15		—
Net income for the year not distributed – common shares		279		167		44

Total earnings – common shares (B)		569		182		44
Basic earnings per preferred share (A / number of preferred shares)		1.17		0.84		0.35
Basic earnings per common share (B / number of common shares)		1.17		0.37		0.10


	2018		2017		2016
Net income for the year from continuing operations attributed to equity holders of the parent		1,378		1,001		334
Minimum mandatory dividend from net income for the year from continuing operations – preferred shares		527		486		204
Net income for the year from continuing operations not distributed – preferred shares		390		333		87

Total earnings from continuing operations - preferred shares (A.1)		917		819		291
Minimum mandatory dividend from net income for the year from continuing operations – common shares		290		15		-
Net income for the year from continuing operations not distributed – common shares		171		167		44

Total earnings from continuing operations - common shares (B.1)		461		182		44
Basic earnings from continuing operations per preferred share (A.1 / number of preferred shares)		0.95		0.84		0.35
Basic earnings from continuing operations per common share (B.1 / number of common shares)		0.95		0.37		0.10

Summary of Calculation of Diluted Eranings per Share

The calculation of diluted earnings per share is as follows:


	2018		2017		2016
Net income for the year attributed to equity holders of the parent		1,700		1,001		334
	—
Total basic earnings – preferred shares (A)		1,131		819		291
Dilution effect related to the RME/Lepsa Option		—		—		(22	)
Dilution effect related to the Ativas Option		—		—		(5	)

Total diluted earnings – preferred shares (C)		1,131		819		264
			—
Total basic earnings – common shares (B)		569		182		44
Dilution effect related to the RME/Lepsa Option		—		—		(11	)
Dilution effect related to the Ativas Option		—		—		(3	)

Total diluted earnings – common shares (D)		569		182		30
Diluted earnings per preferred share (C / number of preferred shares)		1.17		0.84		0.32
Diluted earnings per common share (D / number of common shares)		1.17		0.37		0.07


	2018		2017		2016
Net income for the year from continuing operations attributed to equity holders of the parent		1,378		1,001		334
		—
Total basic earnings from continuing operations - preferred shares (A.1)		917		819		291
Dilution effect related to the RME/Lepsa Option		-		-		(22	)
Dilution effect related to the Ativas Option		-		-		(5	)

Total diluted earnings from continuing operations - preferred shares (C.1)		917		819		264
				—
Total basic earnings from continuing operations - common shares (B.1)		461		182		44
Dilution effect related to the RME/Lepsa Option		—		—		(11	)
Dilution effect related to the Ativas Option		—		—		(3	)

Total diluted earnings from continuing operations - common shares (D.1)		461		182		30
Diluted earnings from continuing operations per preferred share (C.1 / number of preferred shares)		0.95		0.84		0.32
Diluted earnings from continuing operations per common share (D.1 / number of common shares)		0.95		0.37		0.07

Schedule of Capital Reserves and Profit Reserves

Capital reserves


	2018			2017			2016
Investment-related donations and subsidies		1,857			1,857			1,857
Goodwill on issuance of shares		394			69			69
Shares in treasury		(1	)		(1	)		(1	)

		2,250			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


	2018		2017		2016
Legal reserve		853		853		853
Statutory reserve		57		57		57
Retained earnings reserve		3,965		3,341		2,813
Incentive tax reserve		67		58		57
Reserve for mandatory dividends not distributed		1,420		1,420		1,420

		6,362		5,729		5,200

Summary of Detailed Information Regarding Calculation of Retained Earnings Reserve

The calculation of the retained earnings reserve is as follows:


	2018			2017			2016
Net income for the year		1,700			1,001			334
Expired dividends		42			—			—
Incentives tax reserve		(9	)		(1	)		(7	)
Deemed cost realization		42			28			37
Adjustment for initial adoption of IFRS 9 and IFRS 15.		(157	)		—			—
Dividends proposed		(867	)		(500	)		(203	)

Retained earnings reserve		751			528			161

Summary of Reserve for Obligatory Dividends Not Distributed

Reserve for mandatory dividends not distributed


	2018
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 2018, as mentioned in the previous paragraph, is as follows:


	2018			2017			2016
Calculation of Minimum Dividends required by the By-laws for the preferred shares
Nominal value of the preferred shares		4,856			4,191			4,190
Nominal value of the preferred shares to be capitalized		—			665			—

		4,856			4,856			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			486			419
Equity		14,579			14,326			12,930
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		9,704			9,538			8,609
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		291			286			258

Minimum Dividends required by the Bylaws for the preferred shares		486			486			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		1,700			1,001			334
Mandatory dividends – 50% of Net income		850			500			167
Withholding income tax on Interest on equity		17			—			—

		867			500			167
Dividends recorded, as specified in the by-laws
Interest on Equity		210			—			—
Ordinary dividends		657			500			167

		867			500			167
Total dividends for the preferred shares		577			486			419
Total dividends for the common shares		290			14			—
Unit value of dividends – R$
Minimum dividends required by the by-laws for the preferred shares		0.50			0.50			0.50
Mandatory dividends (including withholding income tax on Interest on Equity)		0.59			0.34			0.50
Dividends proposed: Common (ON) shares		0.59			0.50			—
Dividends proposed: Preferred (PN) shares		0.59			0.03			0.50

Summary of Dividends and Interest on Capital Payable

This table provides the changes on dividends and interest on capital payable:


Balances at December, 31, 2017	428
Dividends and interest on equity	867
Withholding income tax on interest on capital	(17	)
Dividends proposed for non-controlling shareholder.	127
Proposed dividends of previous years	(42	)
Expired dividends	(8	)
Dividends retained – Minas Gerais state government (Note 12)	(491	)

Balances at December, 31, 2018	864

Summary of Equity Valuation Adjustments

Equity valuation adjustments


	2018			2017			2016
Adjustments to actuarial liabilities – Employee benefits		(257	)		(235	)		(169	)

Subsidiaries, jointly-controlled entities and affiliated company
Adjustments to actuarial liabilities – Employee benefits		(1,681	)		(1,241	)		(1,042	)
Deemed cost of PP&E (1)		611			639			685
Variation in fair value of financial asset available for sale		—			—			37

		(1,070	)		(602	)		(320	)

Equity valuation adjustments		(1,327	)		(837	)		(489	)

The variation in the balance of deemed cost of fixed assets in 2018 is net of the reversal of deferred taxes on the deemed cost. The change is mainly due to a reversal of R$ 18 in the subsidiary Rosal Energia, arising from the change in the taxation criterion of this subsidiary from the real profit method to the presumed profit method.