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5. OPERATING SEGMENTS
 12 Months Ended
Dec. 31, 2020
Disclosure of operating segments [abstract]  
OPERATING SEGMENTS
5. OPERATING SEGMENTS

The operating segments of the Company reflect their management and their organizational structure, used to monitoring its results.

 

The Company also operates in the gas market, through its subsidiary Gasmig, and in other businesses with less impact on the results of its operations. These segments are reflected in the Company’s management, organizational structure, and monitoring of results.

 

The tables below show segment information for 2020, 2019 and 2018.

 

INFORMATION BY SEGMENT AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2020
    ENERGY                          
DESCRIPTION   Generation and sale     Transmission     Distribution     Gas     Other     Eliminations     TOTAL  
SEGMENT ASSETS     16,150       5,870       26,399       2,615       3,712       (663 )     54,083  
INVESTMENTS IN SUBSIDIARIES AND JOINTLY-CONTROLLED ENTITIES     3,927       1,467       —         —         21       —         5,415  
INVESTMENTS IN AFFILIATES CLASSIFIED AS HELD FOR SALE     —         —         1,258       —         —         —         1,258  
ADDITIONS TO THE SEGMENT     238       246       1,384       50       —         —         1,918  
                                                         
CONTINUING OPERATIONS                                                        
NET REVENUE     6,537       743       16,512       1,664       105       (333 )     25,228  
COST OF ENERGY AND GAS                                                        
Energy bought for resale     (4,026 )     —         (8,161 )     —         —         76       (12,111 )
Charges for use of the national grid     (199 )     —         (1,799 )     —         —         250       (1,748 )
Gas bought for resale     —         —         —         (1,083 )     —         —         (1,083 )
Total     (4,225 )     —         (9,960 )     (1,083 )     —         326       (14,942 )
                                                         
OPERATING COSTS AND EXPENSES                                                        
Personnel     (192 )     (114 )     (886 )     (60 )     (24 )     —         (1,276 )
Employees’ and managers’ profit sharing     (24 )     (12 )     (92 )     —         (14 )     —         (142 )
Post-employment obligations     (53 )     (41 )     (297 )     —         (47 )     —         (438 )
Materials     (13 )     (4 )     (61 )     (1 )     —         —         (79 )
Outsourced services     (113 )     (46 )     (1,055 )     (25 )     (33 )     7       (1,265 )
Depreciation and amortization     (207 )     (5 )     (668 )     (106 )     (3 )     —         (989 )
Operating provisions (reversals)     (122 )     (10 )     (272 )     (1 )     (18 )     —         (423 )
Construction costs     —         (147 )     (1,384 )     (50 )     —         —         (1,581 )
Other operating expenses, net     (68 )     11       (212 )     (12 )     (16 )     —         (297 )
Total cost of operation     (792 )     (368 )     (4,927 )     (255 )     (155 )     7       (6,490 )
                                                         
OPERATING COSTS AND EXPENSES     (5,017 )     (368 )     (14,887 )     (1,338 )     (155 )     333       (21,432 )
                                                         
Equity in earnings of unconsolidated investees, net     (129 )     494       —         —         (8 )     —         357  
Periodic Tariff Review adjustments     —         502       —         —         —         —         502  
Gain on a bargain purchase and remeasurement of previously held equity interest in subsidiary acquired in business combinations transactions     —         51       —         —         —         —         51  
                                                         
OPERATING INCOME BEFORE  FINANCE INCOME (EXPENSES)     1,391       1,422       1,625       326       (58 )     —         4,706  
Finance income     1,711       175       514       44       —         —         2,444  
Finance  expenses     (2,509 )     (274 )     (505 )     (58 )     (4 )     —         (3,350 )
INCOME BEFORE INCOME TAX AND SOCIAL CONTRIBUTION TAX     593       1,323       1,634       312       (62 )     —         3,800  
Income tax and social contribution tax     (206 )     (209 )     (430 )     (85 )     (6 )     —         (936 )
NET INCOME FROM CONTINUING OPERATIONS     387       1,114       1,204       227       (68 )     —         2,864  
                                                         
Equity holders of the parent     387       1,114       1,204       226       (68 )     —         2,863  
Non-controlling interests     —         —         —         1       —         —         1  
      387       1,114       1,204       227       (68 )     —         2,864  

 

The following is a breakdown of the revenue of the Company by activity:

 

2020   ENERGY   GAS   OTHER   ELIMINATIONS   TOTAL
  GENERATION   TRANSMISSION   DISTRIBUTION
 Revenue from supply of energy     7,337       —         19,174       —         —         (79 )     26,432  
 Revenue from Use of Distribution Systems (the TUSD charge)     —         —         3,046       —         —         (24 )     3,022  
 CVA and Other financial components in tariff adjustment     —         —         455       —         —         —         455  
Reimbursement of  PIS/Pasep and Cofins over ICMS credits to customers– realization     —         —         266       —         —         —         266  
 Transmission operation and maintenance revenue     —         506       —         —         —         (226 )     280  
 Transmission construction revenue     —         201       —         —         —         —         201  
 Interest revenue arising from the financing component in transmission contract asset     —         438       —         —         —         —         438  
 Distribution construction revenue     —         —         1,385       51       —         —         1,436  
 Adjustment to expectation of cash flow from Financial assets of distribution concession to be indemnified     —         —         16       —         —         —         16  
 Gain on inflation updating of Concession Grant Fee     347       —         —         —         —         —         347  
 Transactions in energy on the CCEE     154       —         —         —         —         —         154  
Mechanism for the sale of surplus     —         —         234       —         —         —         234  
 Supply of gas     —         —         —         2,011       —         —         2,011  
 Fine for violation of continuity indicator     —         —         (51 )     —         —         —         (51 )
 Other operating revenues     5       34       1,561       —         113       (4 )     1,709  
 Sector / Regulatory charges reported as Deductions from revenue     (1,306 )     (436 )     (9,574 )     (398 )     (8 )     —         (11,722 )
Net revenue     6,537       743       16,512       1,664       105       (333 )     25,228  
INFORMATION BY SEGMENT AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2019
    ENERGY                          
DESCRIPTION   Generation and sale     Transmission     Distribution     Gas     Other     Eliminations     TOTAL  
SEGMENT ASSETS     14,749       4,712       25,616       2,689       3,888       (1,127 )     50,527  
INVESTMENTS IN SUBSIDIARIES AND JOINTLY-CONTROLLED ENTITIES     4,133       1,237       —         —         29       —         5,399  
INVESTMENTS IN AFFILIATES CLASSIFIED AS HELD FOR SALE     —         —         1,258       —         —         —         1,258  
ADDITIONS TO THE SEGMENT     102       220       936       934       9       —         2,201  
                                                         
CONTINUING OPERATIONS                                                        
NET REVENUE     6,882       811       15,919       1,858       323       (307 )     25,486  
COST OF ENERGY AND GAS                                                        
Energy bought for resale     (3,841 )     —         (7,517 )     —         —         72       (11,286 )
Charges for use of the national grid     (190 )     —         (1,459 )     —         —         223       (1,426 )
Gas bought for resale     —         —         —         (1,436 )     —         —         (1,436 )
Total     (4,031 )     —         (8,976 )     (1,436 )     —         295       (14,148 )
                                                         
OPERATING COSTS AND EXPENSES                                                        
Personnel     (207 )     (115 )     (869 )     (46 )     (35 )     —         (1,272 )
Employees’ and managers’ profit sharing     (36 )     (27 )     (183 )     —         (17 )     —         (263 )
Post-employment obligations     (50 )     (38 )     (277 )     —         (43 )     —         (408 )
Materials     (17 )     (6 )     (63 )     (2 )     (3 )     —         (91 )
Outsourced services     (125 )     (45 )     (1,016 )     (20 )     (40 )     7       (1,239 )
Depreciation and amortization     (210 )     (6 )     (652 )     (86 )     (4 )     —         (958 )
Operating provisions (reversals)     (975 )     (135 )     (1,101 )     (2 )     (188 )     —         (2,401 )
Construction costs     —         (220 )     (937 )     (43 )     —         —         (1,200 )
Other operating expenses, net     (175 )     (16 )     (298 )     (10 )             5       (494 )
Total cost of operation     (1,795 )     (608 )     (5,396 )     (209 )     (330 )     12       (8,326 )
                                                         
OPERATING COSTS AND EXPENSES     (5,826 )     (608 )     (14,372 )     (1,645 )     (330 )     307       (22,474 )
                                                         
Equity in earnings of unconsolidated investees, net     (88 )     215       —         —         (2 )     —         125  
Dividends declared by investee classified as held for sale     —         —         73       —         —         —         73  
                                                         
OPERATING INCOME BEFORE  FINANCE INCOME (EXPENSES)     968       418       1,620       213       (9 )     —         3,210  
Finance income     1,282       98       1,535       21       271       —         3,207  
Finance  expenses     (1,035 )     (115 )     (632 )     (46 )     (19 )     —         (1,847 )
INCOME BEFORE INCOME TAX AND SOCIAL CONTRIBUTION TAX     1,215       401       2,523       188       243       —         4,570  
Income tax and social contribution tax     (551 )     (70 )     (806 )     (48 )     (124 )     —         (1,599 )
NET INCOME FROM CONTINUING OPERATIONS     664       331       1,717       140       119       —         2,971  
                                                         
DISCONTINUED OPERATIONS                                                        
NET INCOME AFTER TAX FROM DISCONTINUED OPERATIONS     —         —         224       —         —         —         224  
NET INCOME (LOSS) FOR THE YEAR     664       331       1,941       140       119       —         3,195  
                                                         
Equity holders of the parent     664       331       1,941       139       119       —         3,194  
Non-controlling interests     —         —         —         1       —         —         1  
      664       331       1,941       140       119       —         3,195  

The following is a breakdown of the revenue of the Company by activity:

 

    ENERGY                          

 2019 

(Restated)

   GENERATION     TRANSMISSION     DISTRIBUTION     GAS     OTHER     ELIMINATIONS     TOTAL  
 Revenue from supply of energy     7,037       —         19,967       —         —         (76 )     26,928  
 Revenue from Use of Distribution Systems (the TUSD charge)     —         —         2,747       —         —         (25 )     2,722  
 CVA and Other financial components in tariff adjustment     —         —         58       —         —         —         58  
Transmission operation and maintenance     —         550       —         —         —         (198 )     352  
 Transmission construction revenue     —         312       —         —         —         —         312  
Interest revenue arising from the financing component in transmission contract asset     —         328       —         —         —         —         328  
 Distribution construction revenue     —         —         937       43       —         —         980  
 Adjustment to expectation of cash flow from Financial assets of distribution concession to be indemnified     —         —         18       —         —         —         18  
 Gain on inflation updating of Concession Grant Fee     318       —         —         —         —         —         318  
 Transactions in energy on the CCEE     439       —         (7 )     —         —         —         432  
 Supply of gas     —         —         —         2,298       —         —         2,298  
 Fine for violation of continuity indicator     —         —         (58 )     —         —         —         (58 )
PIS/Pasep and Cofins taxes credits over ICMS     414       —         830       —         184       —         1,428  
 Other operating revenues     82       28       1,468       —         151       (8 )     1,721  
 Sector / Regulatory charges reported as Deductions from revenue     (1,408 )     (407 )     (10,041 )     (483 )     (12 )     —         (12,351 )
Net revenue     6,882       811       15,919       1,858       323       (307 )     25,486  
INFORMATION BY SEGMENT AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2018 (Restated)
DESCRIPTION   ENERGY   Gas   Telecom*   Other   Eliminations   TOTAL
  Generation and sale   Transmission   Distribution  
SEGMENT ASSETS     14,671       4,346       37,840       1,822       10       2,607       (957 )     60,339  
INVESTMENTS IN SUBSIDIARIES AND JOINTLY-CONTROLLED ENTITIES     4,055       1,163       —         —         —         17       —         5,235  
ADDITIONS TO THE SEGMENT     559       138       856       70       9       —         —         1,632  
                                                                 
CONTINUING OPERATIONS                                                                
NET REVENUE     6,374       708       13,757       1,619       —         134       (293 )     22,299  
COST OF ENERGY AND GAS                                                                
Energy bought for resale     (3,917 )     —         (7,238 )     —         —         —         71       (11,084 )
Charges for use of the national grid     (216 )     —         (1,463 )     —         —         —         199       (1,480 )
Gas bought for resale                             (1,238 )                             (1,238 )
Total     (4,133 )     —         (8,701 )     (1,238 )     —         —         270       (13,802 )
                                                                 
OPERATING COSTS AND EXPENSES                                                                
Personnel     (230 )     (108 )     (965 )     (60 )     (18 )     (29 )     —         (1,410 )
Employees’ and managers’ profit sharing     (10 )     (7 )     (51 )     —         —         (9 )     —         (77 )
Post-employment obligations     (46 )     (27 )     (224 )     —         —         (40 )     —         (337 )
Materials     (39 )     (4 )     (58 )     (2 )     (1 )     —         —         (104 )
Outsourced services     (123 )     (40 )     (880 )     (20 )     (9 )     (30 )     15       (1,087 )
Depreciation and amortization     (164 )     —         (595 )     (74 )     (1 )     (1 )     —         (835 )
Operating provisions (reversals)     (107 )     (12 )     (332 )     2       1       (18 )     —         (466 )
Construction costs     —         (96 )     (757 )     (44 )     —         —         —         (897 )
Other operating expenses, net     (65 )     (17 )     (203 )     (13 )     (3 )     (112 )     8       (405 )
Total cost of operation     (784 )     (311 )     (4,065 )     (211 )     (31 )     (239 )     23       (5,618 )
                                                                 
OPERATING COSTS AND EXPENSES     (4,917 )     (311 )     (12,766 )     (1,449 )     (31 )     (239 )     293       (19,420 )
                                                                 
Equity in earnings of unconsolidated investees, net     (353 )     231       33       —         (1 )     (14 )     —         (104 )
Remeasurement of previously held equity interest in subsidiaries acquired     80       —         (52 )     —         —         (147 )     —         (119 )
Impairment of investments     (127 )     —         —         —         —         —         —         (127 )
                                                                 
OPERATING INCOME BEFORE  FINANCE INCOME (EXPENSES)     1,057       628       972       170       (32 )     (266 )     —         2,529  
Finance income     1,113       61       434       84       1       13       —         1,706  
Finance  expenses     (1,536 )     (5 )     (621 )     (38 )     (5 )     (19 )     —         (2,224 )
INCOME BEFORE INCOME TAX AND SOCIAL CONTRIBUTION TAX     634       684       785       216       (36 )     (272 )     —         2,011  
Income tax and social contribution tax     (276 )     (133 )     (217 )     (53 )     12       57       —         (610 )
NET INCOME (LOSS) FROM CONTINUING OPERATIONS     358       551       568       163       (24 )     (215 )     —         1,401  
                                                                 
DISCONTINUED OPERATIONS                                                                
NET INCOME AFTER TAX FROM DISCONTINUED OPERATIONS     11       —         62       —         290       —         —         363  
   
                                                                 
Equity holders of the parent     361       551       599       162       266       (217 )     —         1,722  
Non-controlling interests     8       —         31       1       —         2       —         42  
      369       551       630       163       266       (215 )     —         1,764  

(*) On March 31, 2018 Cemig Telecom assets and liabilities were merged into the Company.

 

The following is a breakdown of the revenue of the Company by activity:

 

 2018 

(Restated)

   ENERGY   GAS   OTHER   ELIMINATIONS   TOTAL
  GENERATION   TRANSMISSION   DISTRIBUTION  
 Revenue from supply of energy     7,065       —         17,885       —         —         (78 )     24,872  
 Revenue from Use of Distribution Systems (the TUSD charge)     —         —         2,067       —         —         (22 )     2,045  
 CVA and Other financial components in tariff adjustment     —         —         1,973       —         —         —         1,973  
 Transmission operation and maintenance     —         520       —         —         —         (177 )     343  
 Transmission construction revenue     —         138       —         —         —         —         138  
 Interest revenue arising from the financing component in transmission contract asset     —         311       —         —         —         —         311  
 Generation assets –  indemnity revenue     55       —         —         —         —         —         55  
 Distribution construction revenue     —         —         757       45       —         —         802  
 Adjustment to expectation of cash flow from Financial assets of distribution concession to be indemnified     —         —         —         —         —         —         —    
 Gain on inflation updating of Concession Grant Fee     321       —         —         —         —         —         321  
 Transactions in energy on the CCEE     217       —         —                 —         —         217  
 Supply of gas     —         —         —         1,995       —         —         1,995  
 Fine for violation of continuity indicator     —         —         (44 )     —         —         —         (44 )
 Other operating revenues     82       29       1,345       —         145       (16 )     1,585  
 Sector / Regulatory charges reported as Deductions from revenue     (1,366 )     (290 )     (10,226 )     (421 )     (11 )     —         (12,314 )
Net revenue     6,374       708       13,757       1,619       134       (293 )     22,299  

 

For further details of operating revenue, see Note 27.

 

As stated in Note 2.8, the effects of the retrospective application adjustments in balances for December 31, 2019 and 2018 only affected the transmission segment.