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FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (Tables)

12 Months Ended

Dec. 31, 2018

Statement [LineItems]

Summary of Financial Instruments and Fair Value

The main financial instruments, classified in accordance with the accounting principles adopted by the Company, are as follows:

		Level				2018								2017
						Balance				Fair value				Balance				Fair value
Financial assets
Amortized cost (1)
Marketable securities – Cash investments			2				117				117				45				45
Customers and Traders; Concession holders (transmission service)			2				3,928				3,928				4,035				4,035
Restricted cash			2				91				91				106				106
Advances to suppliers			2				94				94				123				123
Customers – Accounts receivable from the State of Minas Gerais							245				245				105				105
Other accounts receivable from the State of Minas Gerais (CIP)							2				2				1				1
Accounts receivable from the State of Minas Gerais (AFAC)			2				246				246				235				235
Concession financial assets – CVA (Parcel ‘A’ Costs Variation Compensation) Account and Other financial components			3				1,081				1,081				369				369
Reimbursement of tariff subsidies			2				91				91				77				77
Low-income subsidy			2				30				30				27				27
Escrow deposits			2				2,502				2,502				2,336				2,336
Concession grant fee – Generation concessions			3				2,409				2,409				2,337				2,337
Reimbursements receivable – Transmission							1,296				1,296				1,928				1,928
Accounts receivable – Renova			2				532				532				350				350
Reimbursement – Decontracting of supply			2				97				97				—				—
Reimbursement – Assignment of contract							10				10				—				—
							12,771				12,771				12,074				12,074
Fair value through profit or loss
Cash equivalents – Cash investments							783				783				917				917
Marketable securities							—				—				—				—
Bank certificates of deposit			2				—				—				3				3
Treasury Financial Notes (LFTs)			1				254				254				740				740
Financial Notes – Banks			2				435				435				289				289
Debentures			2				7				7				11				11
							1,479				1,479				1,960				1,960
Transmission concession financial assets – remunerated by tariff							—				—				547				547
Derivative financial instruments (Swaps)			3				813				813				9				9
Derivative financial instruments (Ativas and Sonda Put options)(2)			3				4				4				4				4
Concession financial assets – Distribution infrastructure			3				396				396				371				371
Reimbursements receivable – Generation			3				816				816				1,901				1,901
							3,508				3,508				4,792				4,792
							16,279				16,279				16,866				16,866
Financial liabilities
Amortized cost (1)
Loans, financing and debentures			2				(14,772	)			(14,772	)			(14,398	)			(14,398	)
Debt with pension fund (Forluz)			2				(652	)			(652	)			(720	)			(720	)
Deficit of pension fund (Forluz)			2				(378	)			(378	)			(283	)			(283	)
Concession financial liabilities – CVA (Parcel ‘A’ Costs Variation) Account and Other financial components			3				—				—				(415	)			(415	)
Concessions payable			3				(19	)			(19	)			(21	)			(21	)
Minas Gerais State tax amnesty plan (PRCT)			2				—				—				(283	)			(283	)
Suppliers			2				(1,801	)			(1,801	)			(2,343	)			(2,343	)
Advances from customers			2				(79	)			(79	)			(233	)			(233	)
							(17,701	)			(17,701	)			(18,696	)			(18,696	)
Fair value through profit or loss
Derivative financial instruments (Swaps)			3				—				—				(41	)			(41	)
Derivative financial instruments (RME put options)			2				—				—				(507	)			(507	)
Derivative financial instruments (SAAG put options)			3				(419	)			(419	)			(312	)			(312	)
							(419	)			(419	)			(860	)			(860	)
							(18,120	)			(18,120	)			(19,556	)			(19,556	)

(1) On December 31, 2018 and 2017, the book values of financial instruments reflect their fair values.

(2) Options in shares of Sonda in the amount of R$ 4, recognized in the Company’s assets due to the merger of Cemig Telecom.

Summary of Net Liabilities in Relation to its Equity

On December 31, 2018 and 2017, the options values were as follows:

		2018				2017
Put option for shares in RME			—				507
Put option – SAAG			419				312
Put / call options – Ativas and Sonda			(4	)			(4	)
			415				815

Summary of Changes in Value of Options - The Difference Between Esimated Fair Value for Assets and Corresponding Exercise Price

The change in the value of the options – the difference between the estimated fair value for the assets and the corresponding exercise price, on December 31, 2018, 2017 and 2016, is as follows:

Balance at December 31, 2015			1,245
Variation in fair value			55
Reversals			(150	)
Balance at December 31, 2016			1,150
Variation in fair value			187
Written down, due to exercise of Put			(830	)
Balance at December 31, 2017			507
Variation in fair value			48
Written down, due to exercise of Put			(555	)
Balance at December 31, 2018			—

Summary of Derivative Instruments Contracted

This table presents the derivative instruments contracted by Cemig GT as of December 31, 2018 and 2017.

Assets (1)		Liability		Maturity period		Trade market		Notional amount (2)				Unrealized gain / loss								Unrealized gain / loss
												Carrying amount 2018				Fair value 2018				Carrying amount 2017				Fair value 2017
US$ exchange variation + Rate (9.25% p.y.)		Local currency + R$ 150.49% of CDI		Interest: Half-yearly Principal: Dec. 2024		Over the counter		US$	1,000				679				627				51				(32	)
US$ exchange variation + Rate (9.25% p.y.)		Local currency + R$125.52% of CDI		Interest: Half-yearly Principal: Dec. 2024		Over the counter		US$	500				33				186				—				—
													712				813				51				(32	)

1) For the US$1 billion Eurobond issued on December 2017: (i) for the principal, a call spread was contracted, with floor at R$ 3.25/US$ and ceiling at R$ 5.00/US$; and (ii) a swap was contracted for the total interest, for a coupon of 9.25% p.a. at an average rate equivalent to 150.49% of the CDI.

Summary of Exposure to Exchange Rates

The net exposure to exchange rates is as follows:

		2018								2017
Exposure to exchange rates		Foreign currency				R$				Foreign currency				R$
US dollar
Loans and financing (Note 22)			1,518				5,882				1,015				3,357
Suppliers (Itaipu Binacional)			70				268				74				240
		1,588				6,150				1,089				3,597
Loans and financing (Note 22)			—				—				1				4
Net liabilities exposed							6,150								3,601

Schedule of Exposure to Exchange Rates

Risk: foreign exchange rate exposure		Base Scenario				‘Probable’ scenario US$1=R$ 3.80 EUR1= R$ 4.37				‘Possible’ scenario Appreciation 25.00% US$1= R$ 4.75 EUR1= R$ 5.46				‘Remote’ scenario Appreciation 50.00% US$1=R$ 5.70 EUR1= R$ 6.55
US dollar
Loans and financings (Note 22)			5,882				5,769				7,212				8,654
Suppliers (Itaipu Binacional)			268				263				328				394
			6,150				6,032				7,540				9,048
Net liabilities exposed			6,150				6,032				7,540				9,048
Net effect of exchange rate fluctuation							(118	)			1,390				2,898

Estimation of Company Interest Rate

		2018				2019
	Risk: Increase in Brazilian interest rates		Book value				‘Probable’ scenario Selic 6.50% TJLP 6.48%				‘Possible’ scenario Selic 8.12% TJLP 8.09%				‘Remote’ scenario Selic 9.75% TJLP 9.71%
Assets
Cash equivalents (Note 6) – CDI			783				834				847				860
Marketable securities (Note 7) – CDI / SELIC			813				865				878				891
Accounts receivable – Renova (Note 31) – CDI			532				567				576				584
Advance for future delivery of energy – CDI			94				100				102				103
Restricted cash – CDI			91				97				98				100
CVA and Other financial components – SELIC			1,081				1,151				1,168				1,186
Reimbursement due to termination of contracts (Note 31) – SELIC / CDI			97				104				105				107
Reimbursement – cancelled contracts – CDI			10				11				11				11
			3,501				3,729				3,785				3,842
Liabilities
Loans and financing (Note 22) – CDI			(4,920	)			(5,239	)			(5,319	)			(5,399	)
Loans and financing (Note 22) – TJLP			(249	)			(266	)			(270	)			(274	)
Advanced sales of energy (Note 8) – CDI			(79	)			(85	)			(86	)			(87	)
			(5,248	)			(5,590	)			(5,675	)			(5,760	)
Net assets (liabilities) exposed			(1,747	)			(1,861	)			(1,890	)			(1,918	)
Net effect of fluctuation in interest rates							(114	)			(143	)			(171	)

Summary of Risk of Increase in Inflation

Increase in inflation risk

This table presents the Company’s net exposure to inflation index:

Exposure to increase in inflation		2018				2017
Assets
Concession financial assets related to Distribution infrastructure – IPCA (1)			396				111
Receivable from Minas Gerais state government (Debt recognition agreement) – IGPM index (Note 12 and 31)			247				108
Receivable from Minas Gerais state government (AFAC) – IGPM (Note 12 and 31)			246				235
Receivable for residual value – Transmission – IPCA (Note 15)			1,296				1,928
Transmission – Assets remunerated by tariff – IPCA index (Note 15)			—				496
Concession Grant Fee – IPCA (Note 15)			2,409				2,337
			4,594				5,215
Liabilities
Loans, financing and debentures – IPCA (Note 22)			(3,791	)			(3,801	)
Debt with pension fund (Forluz) – IPCA			(652	)			(721	)
Deficit of pension plan (Forluz) – IPCA			(378	)			(283	)
			(4,821	)			(4,805	)
Net assets (liabilities) exposed			(227	)			410

(1) Portion of the concession financial assets relating to the Regulatory Remuneration Base of Assets ratified by the regulator (Aneel) after the 3^rd tariff review cycle.

Sensitivity analysis

In relation to the most significant risk of reduction in inflation index, reflecting the consideration that the Company has more assets than liabilities indexed to inflation indices, the Company estimates that, in a probable scenario, at December 31, 2019 the IPCA inflation index will be 4.0881% and the IGPM inflation index will be 4.35%. The Company has prepared a sensitivity analysis of the effects on its net income arising from a reduction in inflation of 25% and 50% in relation to the ‘probable’ scenario.

Risk: increase in inflation		2018				2019
		Amount Book value				‘Probable’ scenario IPCA 4.28%				‘Possible’ scenario (25%) IPCA 5.11% IGPM 5.44%				Amount Book value
Assets
Concession financial assets related to Distribution infrastructure – IPCA (1)			396				412				416				420
Receivable from Minas Gerais state government (Debt recognition) – IGPM (Note 31)			247				258				260				263
Accounts receivable from Minas Gerais state government (AFAC) – IGPM index (Note 31)			246				256				259				262
Receivable for residual value – Transmission – IPCA (Note 15)			1,296				1,349				1,363				1,376
Concession Grant Fee – IPCA (Note 15)			2,409				2,507				2,532				2,557
			4,594				4,782				4,830				4,878
Liabilities
Loans, financing and debentures – IPCA – IPCA			(3,791	)			(3,946	)			(3,985	)			(4,024	)
Debt agreed with pension fund (Forluz) – IPCA			(652	)			(679	)			(685	)			(692	)
Deficit of pension plan (Forluz) – IPCA			(378	)			(393	)			(397	)			(401	)
			(4,821	)			(5,018	)			(5,067	)			(5,117	)
Net liability exposed			(227	)			(236	)			(237	)			(239	)
Net effect of fluctuation in IPCA and IGP–M indices							(9	)			(10	)			(12	)

(1) Portion of the Concession financial assets relating to the Regulatory Remuneration Base of Assets ratified by the regulator (Aneel) after the 3^rd tariff review cycle.

Summary of Flow of Payments of the Company's Obligations for Debt Agreed, Financings and Debentures for Floating and Fixed Rates Including the Interest Specified in Contracts

The flow of payments of the Company’s obligation to suppliers, debts with the pension fund, loans, financing and debentures, at floating and fixed rates, including future interest up to contractual maturity dates, is as follows:

		Up to 1 month				1 to 3 months				3 months to 1 year				1 to 5 years				Over 5 years				Total
Financial instruments at (interest rates):
- Floating rates
Loans, financing and debentures			111				975				2,101				10,081				7,803				21,071
Onerous concessions			—				—				2				8				14				24
Debt with pension plan (Forluz) (Note 24)			12				23				106				626				87				854
Deficit of the pension plan (FORLUZ) (Note 24)			4				7				33				192				477				713
			127				1,005				2,242				10,907				8,381				22,662
- Fixed rate
Suppliers			1,659				141				1				—				—				1,801
			1,786				1,146				2,243				10,907				8,381				24,463

Summary of Credit Exposure

Banks that exceed these thresholds are classified in three groups, by the value of their equity; and within this classification, limits of concentration by group and by institution are set:

Group		Equity		Concentration		Limit per bank (% of equity)*
A1		Over R$ 3.5 billion		Minimum of 80%		Between 6% and 9%
A2		R$ 1.0 billion to R$ 3.5 billion		Maximum 20%		Between 5% and 8%
B		R$ 400 million to R$ 1.0 billion		Maximum 20%		Between 5% and 7%

* The percentage assigned to each bank depends on individual assessment of indicators, e.g. liquidity, and quality of the credit portfolio.

Summary of Net Liabilities in Relation to its Equity

This table shows comparisons of the Company’s net liabilities and its Equity on December 31, 2018 and 2017:

		2018				2017
Total liabilities			43,916				27,910
(–) Cash and cash equivalents			(891	)			(1,030	)
(–) Restricted cash			(91	)			(106	)
Net liabilities			42,934				26,774
Total equity			15,939				14,330
Net liabilities / equity			2.70				1.87

Assets as Held for Sale and Discontinued Operations

33. ASSETS AS HELD FOR SALE AND DISCONTINUED OPERATIONS

On December 31, 2018 assets and liabilities classified as held for sale, and the results of discontinued operations, were as follows:

		Investments				Telecom assets				Total
Assets			19,446				—				19,446
Liabilities			(16,272	)			—				(16,272	)
Net Asset			3,174				—				3,174
Attributed equity holders of the parent			1,818				—				1,818
Attributed to non-controlling interests			1,356				—				1,356
Net income (loss) from discontinued operations			73				290				363
Attributed to equity holders of the parent			32				290				322
Attributed to non-controlling interests			41				—				41
Basic and diluted earnings per preferred share from discontinued operations – R$											0,22
Basic and diluted earnings per common share from discontinued operations – R$											0,22

The changes in assets and liabilities classified as held for sale in 2018 were as follows:

Reclassification of investments – Note 17(*)			1,786
The changes in assets and liabilities classified as held for sale in 2018 were as follows:			32
			1,818

(*) Net value of the adjustment to fair value, less costs of disposal (R$ 42).

Telecom assets:

On May 25, 2018 Cemig announced its intention to sell certain telecom assets that were acquired in the merger of Cemig Telecomunicações with Company on March 31, 2018.

The assets that were the subject of the tender were a group of the Company’s assets, and positions in infrastructure and services contracts. They were separated into two lots where the winning bid for Lot 1, presented by American Tower do Brasil – Comunicação Multimídia Ltda., was for R$ 576, i.e. 71.87% above the minimum sales price specified in the tender announcement. The winning bid for Lot 2, presented by Algar Soluções em TIC S.A., was for R$ 79, or 141.05% above the minimum sale value specified in the tender announcement.

Considering the requirements of IFRS 5, Company classified the telecom assets subject to the tender offer as held for sale, and discontinued operations.

In November 2018, the sale of these assets was completed for and amount of R$ 655 paid in cash. The carrying value of these asset amounted to R$ 277, which resulted in the recognition of a gain on sale of R$ 378.

The detail of Telecom assets results presented as discontinued operations on Company’s net income was as follows:

		2018
Results of discontinued operations
Net revenue			119
Outsourced services expenses			(23	)
Depreciation and amortization			(15	)
Gain on disposal of assets			378
Other operating expenses, net			(21	)
Income before finance income (expenses) and taxes			438
Finance income			1
Income before income and social contribution taxes			439
Current income and social contribution taxes			(145	)
Deferred income and social contribution taxes			(4	)
Net income			290

The effects on cash flow arising from the disposal of the telecom assets are as follows:

		Consolidated
Operational activity – gain on sale of investment			(378	)
Investment activity – amount of sale			655
			277

Light S.A.

Upon obtaining control of Light (See Note 17.1), on November 27, 2018, the Board of Directors committed as a priority for 2019, to dispose of its controlling interest in Light, on conditions that would be compatible with the market and also in accordance with the interests of shareholders. The Company expects to complete the sale until the end of 2019.

As a result, the Company has assessed if the provisions of IFRS 5 – Non-current assets held for sale and discontinued operations, were met and concluded that the sale is highly probable within the near future. Thus the Company has evaluated the effects on the investments held in the investees LightGer, Axxiom, Guanhães and UHE Itaocara, which were jointly controlled by the Company and Light.

This table provides the information on the assets and liabilities of the investments classified as discontinued operations on December, 31, 2018:

		Light				LightGer				Guanhães				Axxion				Itaocara				Total
ASSETS
Assets classified as held for sale
Cash and cash equivalents			707				58				5				7				5				782
Marketable securities			977				—				—				—				—				977
Customers and traders			2,855				11				—				—				—				2,866
Recoverable taxes			75				—				—				1				—				76
Accounts receivable			344				—				—				20				—				364
Inventories			38				—				—				—				—				38
Concession financial assets			564				—				—				—				—				564
Other current assets			75				—				—				—				—				75
Total, current assets			5,635				69				5				28				5				5,742
Customers and traders			1,013				—				—				—				—				1,013
Recoverable taxes			52				—				2				—				—				54
Deferred income and social contribution taxes			405				—				—				18				—				423
Financial assets of the concession			4,420				—				—				—				—				4,420
Concession contract assets			330				—				—				—				—				330
Property, plant and equipment			1,560				131				345				1				6				2,043
Intangible assets			3,097				—				3				6				9				3,115
Capex			547				—				—				—				—				547
Other non-current assets			804				1				13				2				—				820
Total, non-current assets			12,228				132				363				27				15				12,765
Total assets of subsidiaries classified as held for sale			17,863				201				368				55				20				18,507
LIABILITIES
Liabilities directly associated to assets held for sale
Suppliers			2,119				34				13				3				—				2,169
Loans, financing and debentures(1)			1,996				8				13				9				—				2,026
Taxes and social contribution payable			339				1				—				1				—				341
Other current liabilities			824				1				1				19				—				845
Total, non-current liabilities			5,278				44				27				32				—				5,381
Loans, financing and debentures(1)			8,032				71				139				1				—				8,243
Taxes and social contribution payable			305				—				1				1				—				307
Other non-current liabilities(2)			859				—				4				4				9				876
Total, non-current liabilities			9,196				71				144				6				9				9,426
Total liabilities of subsidiaries associated with assets classified as held for sale			14,474				115				171				38				9				14,807

(1) Certain loans, financing and debentures agreements of Light S.A. and subsidiaries has clauses that may cause the early maturity of debt, including cross default. The early maturity only occurs when one of the ratios has not been complied with in two consecutive quarters or four intercalate quarters, and when certain nonfinancial covenants have not been complied with. Loans, financing and debentures agreements require that Light S.A. and subsidiaries to maintains certain net debt/EBITDA ratios and covenants. On December 31, 2018, Light S.A. and subsidiaries were in conformity with the required debt covenants, except for the Bonds. The Bonds have restrictive debt covenants and, on December 31, 2018, the subsidiary exceeded the limit of 3.50 times net debt/EBITDA ratio, thus being obliged to respect the limits for contracting new debts until it resumes compliance with the established covenants. As of December 31, 2018, the lack of compliance by Light to the debt/EBITDA ratio had no impact in any other covenants of Light and/or the Company.

(2) Light S.A. and subsidiaries are parties in tax, labor, civil lawsuits and regulatory proceedings in several courts. Management periodically assesses the risks of contingencies related to these proceedings, and as of December 31, 2018, based on the legal counsel’s opinion, recorded a provision of R$ 476,244, regarding unfavorable decisions that are probable and whose amounts are quantifiable. As of December 31, 2018, Light S.A. and subsidiaries are parties to civil, labor and tax lawsuits in the amounts of R$909, R$320 and R$4,467, respectively, whose risk of loss Management believes is less than probable, based on the opinion of its legal counsels. Therefore, no provision was established.

The results of these discontinued operations for the month of December 2018 are as follows:

		31/12/2018
		Light				LightGer				Guanhães				Axxion				Itaocara				Total
Results of discontinued operations
Net revenue			1,052				4				1				6				—				1,063
General costs and expenses			(980	)			(2	)			29				(3	)			—				(956	)
Share of (loss) profit of subsidiaries and joint ventures, and goodwill			(9	)			—				—				—				—				(9	)
Income before finance income (expenses) and taxes			63				2				30				3				—				98
Finance income			92				—				—				—				—				92
Finance expenses			(44	)			—				—				—				—				(44	)
Income before income and social contribution taxes			111				2				30				3				—				146
Current income and social contribution taxes			(14	)			—				—				5				—				(9	)
Deferred income and social contribution taxes			(38	)			—				—				—				—				(38	)
Net income of discontinued operations in the period			59				2				30				8				—				99

Schedule of Assets and Liabilities Classified as Held for Sale, and the Results of Discontinued Operations

On December 31, 2018 assets and liabilities classified as held for sale, and the results of discontinued operations, were as follows:

		Investments				Telecom assets				Total
Assets			19,446				—				19,446
Liabilities			(16,272	)			—				(16,272	)
Net Asset			3,174				—				3,174
Attributed equity holders of the parent			1,818				—				1,818
Attributed to non-controlling interests			1,356				—				1,356
Net income (loss) from discontinued operations			73				290				363
Attributed to equity holders of the parent			32				290				322
Attributed to non-controlling interests			41				—				41
Basic and diluted earnings per preferred share from discontinued operations – R$											0,22
Basic and diluted earnings per common share from discontinued operations – R$											0,22

Summary of Changes in Assets and Liabilities Classified as Held for Sale

The changes in assets and liabilities classified as held for sale in 2018 were as follows:

Reclassification of investments – Note 17(*)			1,786
The changes in assets and liabilities classified as held for sale in 2018 were as follows:			32
			1,818

(*) Net value of the adjustment to fair value, less costs of disposal (R$ 42).

Schedule of Assets and Liabilities Classified as Held for Sale

The detail of Telecom assets results presented as discontinued operations on Company’s net income was as follows:

		2018
Results of discontinued operations
Net revenue			119
Outsourced services expenses			(23	)
Depreciation and amortization			(15	)
Gain on disposal of assets			378
Other operating expenses, net			(21	)
Income before finance income (expenses) and taxes			438
Finance income			1
Income before income and social contribution taxes			439
Current income and social contribution taxes			(145	)
Deferred income and social contribution taxes			(4	)
Net income			290

Summary of Effects on Cash Flow Arising From Disposal of Telecom Assets

The effects on cash flow arising from the disposal of the telecom assets are as follows:

		Consolidated
Operational activity – gain on sale of investment			(378	)
Investment activity – amount of sale			655
			277

Summary of Assets and Liabilities of Investees Classified as Discontinued Operations

This table provides the information on the assets and liabilities of the investments classified as discontinued operations on December, 31, 2018:

		Light				LightGer				Guanhães				Axxion				Itaocara				Total
ASSETS
Assets classified as held for sale
Cash and cash equivalents			707				58				5				7				5				782
Marketable securities			977				—				—				—				—				977
Customers and traders			2,855				11				—				—				—				2,866
Recoverable taxes			75				—				—				1				—				76
Accounts receivable			344				—				—				20				—				364
Inventories			38				—				—				—				—				38
Concession financial assets			564				—				—				—				—				564
Other current assets			75				—				—				—				—				75
Total, current assets			5,635				69				5				28				5				5,742
Customers and traders			1,013				—				—				—				—				1,013
Recoverable taxes			52				—				2				—				—				54
Deferred income and social contribution taxes			405				—				—				18				—				423
Financial assets of the concession			4,420				—				—				—				—				4,420
Concession contract assets			330				—				—				—				—				330
Property, plant and equipment			1,560				131				345				1				6				2,043
Intangible assets			3,097				—				3				6				9				3,115
Capex			547				—				—				—				—				547
Other non-current assets			804				1				13				2				—				820
Total, non-current assets			12,228				132				363				27				15				12,765
Total assets of subsidiaries classified as held for sale			17,863				201				368				55				20				18,507
LIABILITIES
Liabilities directly associated to assets held for sale
Suppliers			2,119				34				13				3				—				2,169
Loans, financing and debentures(1)			1,996				8				13				9				—				2,026
Taxes and social contribution payable			339				1				—				1				—				341
Other current liabilities			824				1				1				19				—				845
Total, non-current liabilities			5,278				44				27				32				—				5,381
Loans, financing and debentures(1)			8,032				71				139				1				—				8,243
Taxes and social contribution payable			305				—				1				1				—				307
Other non-current liabilities(2)			859				—				4				4				9				876
Total, non-current liabilities			9,196				71				144				6				9				9,426
Total liabilities of subsidiaries associated with assets classified as held for sale			14,474				115				171				38				9				14,807

(1) Certain loans, financing and debentures agreements of Light S.A. and subsidiaries has clauses that may cause the early maturity of debt, including cross default. The early maturity only occurs when one of the ratios has not been complied with in two consecutive quarters or four intercalate quarters, and when certain nonfinancial covenants have not been complied with. Loans, financing and debentures agreements require that Light S.A. and subsidiaries to maintains certain net debt/EBITDA ratios and covenants. On December 31, 2018, Light S.A. and subsidiaries were in conformity with the required debt covenants, except for the Bonds. The Bonds have restrictive debt covenants and, on December 31, 2018, the subsidiary exceeded the limit of 3.50 times net debt/EBITDA ratio, thus being obliged to respect the limits for contracting new debts until it resumes compliance with the established covenants. As of December 31, 2018, the lack of compliance by Light to the debt/EBITDA ratio had no impact in any other covenants of Light and/or the Company.

(2) Light S.A. and subsidiaries are parties in tax, labor, civil lawsuits and regulatory proceedings in several courts. Management periodically assesses the risks of contingencies related to these proceedings, and as of December 31, 2018, based on the legal counsel’s opinion, recorded a provision of R$ 476,244, regarding unfavorable decisions that are probable and whose amounts are quantifiable. As of December 31, 2018, Light S.A. and subsidiaries are parties to civil, labor and tax lawsuits in the amounts of R$909, R$320 and R$4,467, respectively, whose risk of loss Management believes is less than probable, based on the opinion of its legal counsels. Therefore, no provision was established.

Summary of Results of Discontinued Operations

The results of these discontinued operations for the month of December 2018 are as follows:

		31/12/2018
		Light				LightGer				Guanhães				Axxion				Itaocara				Total
Results of discontinued operations
Net revenue			1,052				4				1				6				—				1,063
General costs and expenses			(980	)			(2	)			29				(3	)			—				(956	)
Share of (loss) profit of subsidiaries and joint ventures, and goodwill			(9	)			—				—				—				—				(9	)
Income before finance income (expenses) and taxes			63				2				30				3				—				98
Finance income			92				—				—				—				—				92
Finance expenses			(44	)			—				—				—				—				(44	)
Income before income and social contribution taxes			111				2				30				3				—				146
Current income and social contribution taxes			(14	)			—				—				5				—				(9	)
Deferred income and social contribution taxes			(38	)			—				—				—				—				(38	)
Net income of discontinued operations in the period			59				2				30				8				—				99

Interest rate risk [member]

Statement [LineItems]

Summary of Changes in Value of Options

The Company is exposed to the risk of increase in Brazilian domestic interest rates. This exposure occurs as a result of net liabilities indexed to variation in interest rates, as follows:

Risk: Exposure to domestic interest rate changes		2018				2017
Assets
Cash equivalents – Cash investments (Note 6) – CDI			783				917
Marketable securities (Note 7) – CDI / SELIC			813				1,088
Accounts receivable – Renova (Note 31) – CDI			532				350
Advance for future delivery of energy – CDI			94				123
Restricted cash – CDI			91				106
CVA and in tariffs (Note 15) – SELIC			1,081				369
Receivable for residual value – Generation (Note 15) – SELIC			—				1,084
Reimbursement due to termination of contract (Note 31) – SELIC / CDI			97				—
Reimbursement related to cancelled contracts – CDI			10				—
Credits owed by Eletrobras			—				4
			3,501				4,041
Liabilities
Loans, financing and debentures (Note 22) – CDI			(4,920	)			(7,202	)
Loans, financing and debentures (Note 22) – TJLP			(249	)			(119	)
Advance sales of energy supply – CDI			(79	)			(188	)
CVA and Other financial components (Note 15) – SELIC			—				(415	)
Adherence to the Tax Anmesty Program (PRCT) (Note 20) – SELIC			—				(283	)
			(5,248	)			(8,207	)
Net liabilities exposed			(1,747	)			(4,166	)

Fair value hedges [member]

Statement [LineItems]

Summary of Fair Value of Derivative Hedge Instrument

Cemig GT has measured the effects on its net income of reduction of the estimated fair value for the ‘probable’ scenario by 25% and 50%, respectively, as follows:

		Base scenario Dec. 31, 2018				‘Probable’ scenario:				‘Possible’ scenario exchange rate depreciation and interest rate increase 25%				‘Remote’ scenario: exchange rate depreciation and interest rate increase 50%
Swap (asset)			5,981				5,934				4,875				3,921
Swap (liability)			(6,095	)			(5,977	)			(6,130	)			(6,269	)
Option / Call spread			927				1,196				588				193
Derivative hedge instrument			813				1,153				(667	)			(2,155	)

Put option - SAAG [member]

Statement [LineItems]

Summary of Changes in Value of Options

The changes in the value of the options are as follows:

Balance at December 31, 2015			148
Adjustment to fair value			48
Balance at December 31, 2016			196
Variation in fair value			121
Reversals			(5	)
Balance at December 31, 2017			312
Adjustment to fair value			107
Balance at December 31, 2018			419

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