bakpcaob2q14_6k.htm - Generated by SEC Publisher for SEC Filing
 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

 
FORM 6-K
 
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16
OR 15D-16 OF THE SECURITIES EXCHANGE ACT OF 1934

For the month of August, 2014

(Commission File No. 1-14862 )

 

 
BRASKEM S.A.
(Exact Name as Specified in its Charter)
 
N/A
(Translation of registrant's name into English)
 


Rua Eteno, 1561, Polo Petroquimico de Camacari
Camacari, Bahia - CEP 42810-000 Brazil
(Address of principal executive offices)



Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F ___X___       Form 40-F ______

Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(1). _____

Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(7). _____

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes ______       No ___X___

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- _____.


 
 

 

Braskem S.A.

Quarterly Information (ITR) at

June 30, 2014

and Independent Auditors’ Report Review

 

 

 


 
 

 

Report of Independent Registered Public Accounting Firm

 

 

To the Board of Directors and Shareholders

Braskem S.A.

 

We have reviewed the accompanying condensed consolidated balance sheet of Braskem S.A. and its subsidiaries as of June 30, 2014, and the related condensed consolidated statements of operations and statement of comprehensive income, and statement of changes in shareholders’ equity for the three month and six month periods ended June 30, 2014, and June 30, 2013 and the condensed consolidated statement of cash flows for the six month periods ended June 30, 2014 and June 30, 2013. These interim financial statements are the responsibility of the Company’s management.

 

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States).  A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters.  It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole.  Accordingly, we do not express such an opinion.

 

Based on our review, we are not aware of any material modifications that should be made to the accompanying condensed consolidated interim financial statements for them to be in conformity with IAS 34 — Interim Financial Reporting issued by the International Accounting Standard Board (IASB).

 

We previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet as of December 31, 2013, and the related consolidated statements of operations, comprehensive income, and changes in equity, and of cash flows for the year then ended (not presented herein), and in our report dated February 13, 2014, we expressed an unqualified opinion on those consolidated financial statements.  In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2013, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived.

 

/s/ PricewaterhouseCoopers Auditores Independentes

Salvador-Bahia,

August 7, 2014

 

 


 
 

Braskem S.A.

 

Balance sheet

at June 30, 2014

All amounts in thousands of reais                                                                                                                                      

 

 

         

Assets

Note

 

Jun/14

 

Dec/13

   

2.1.1(a)

     

Revised

Current assets

         
 

Cash and cash equivalents

3

 

3,150,894

 

4,335,859

 

Financial investments

4

 

155,307

 

86,719

 

Trade accounts receivable

5

 

2,799,470

 

2,810,520

 

Inventories

6

 

5,118,116

 

5,033,593

 

Taxes recoverable

8

 

2,363,511

 

2,237,213

 

Dividends and interest on capital

7

 

-

 

150

 

Prepaid expenses

   

152,475

 

62,997

 

Related parties

7

 

166,057

 

124,487

 

Derivatives operations

14.1.1

 

32,341

 

34,101

 

Other receivables

   

247,509

 

233,808

       

 

 

 

       

14,185,680

 

14,959,447

             

Non-current assets held for sale

1(a)

     

37,681

             
       

14,185,680

 

14,997,128

             

Non-current assets

         
 

Financial investments

4

 

22,622

 

20,779

 

Trade accounts receivable

5

 

27,189

 

61,875

 

Advances to suppliers

6

 

77,177

 

116,714

 

Taxes recoverable

8

 

1,099,224

 

1,285,990

 

Deferred income tax and social contribution

16

 

705,573

 

1,123,313

 

Judicial deposits

   

211,603

 

209,910

 

Related parties

7

 

136,013

 

133,649

 

Insurance claims

   

162,597

 

139,497

 

Derivatives operations

14.1.1

 

63,851

 

137,345

 

Other receivables

   

138,848

 

141,526

 

Investments in subsidiaries and jointly-controlled investments

9

 

116,465

 

115,385

 

Other investments

   

6,510

 

6,501

 

Property, plant and equipment

10

 

26,687,540

 

25,413,548

 

Intangible assets

11

 

2,851,273

 

2,912,630

       

 

 

 

       

32,306,485

 

31,818,662

             

Total assets

   

46,492,165

 

46,815,790

             

 

The Management notes are an integral part of the financial statements

 

1

 


 
 

Braskem S.A.

 

Balance sheet

at June 30, 2014

All amounts in thousands of reais

Continued

 

Liabilities and shareholders' equity

Note

 

Jun/14

 

Dec/13

   

2.1.1(a)

     

Revised

Current liabilities

         
 

Trade payables

   

9,766,021

 

10,421,687

 

Borrowings

12

 

1,329,292

 

1,248,804

 

Project finance

13

 

26,966

 

25,745

 

Derivatives operations

14.1.1

 

53,400

 

95,123

 

Payroll and related charges

   

436,779

 

490,816

 

Taxes payable

15

 

524,644

 

445,424

 

Dividends and interest on capital

   

4,533

 

131,799

 

Advances from customers

   

213,829

 

297,403

 

Sundry provisions

17

 

92,616

 

105,856

 

Post-employment benefits

18

 

-

 

158,137

 

Other payables

   

148,732

 

174,007

       

 

 

 

       

12,596,812

 

13,594,801

             

Non-current liabilities

         
 

Borrowings

12

 

16,482,787

 

17,353,687

 

Project finance

13

 

5,447,011

 

4,705,661

 

Derivatives operations

14.1.1

 

367,438

 

396,040

 

Taxes payable

15

 

819,638

 

902,875

 

Long-term incentives

   

-

 

9,274

 

Deferred income tax and social contribution

16

 

842,295

 

863,405

 

Post-employment benefits

18

 

276,502

 

44,054

 

Advances from customers

   

108,404

 

152,635

 

Sundry provisions

17

 

453,609

 

449,694

 

Other payables

   

736,604

 

662,330

       

 

 

 

   

 

 

25,534,288

 

25,539,655

   

 

       

Shareholders' equity

20

       
 

Capital

   

8,043,222

 

8,043,222

 

Capital reserve

   

232,430

 

232,430

 

Revenue reserves

   

55,307

 

410,149

 

Other comprehensive income

   

(577,370)

 

(1,092,691)

 

Treasury shares

   

(48,892)

 

(48,892)

 

Accumulated profit

   

547,885

 

 

   

 

 

 

 

 

 

Total attributable to the Company's shareholders

 

 

8,252,582

 

7,544,218

   

 

       
 

Non-controlling interest in Braskem Idesa

 

 

108,483

 

137,116

   

 

     

 

   

 

 

8,361,065

 

7,681,334

             

Total liabilities and shareholders' equity

   

46,492,165

 

46,815,790

 

 

 

The Management notes are an integral part of the financial statements

2

 


 
 

Braskem S.A.

 

Statement of operations and statement of comprehensive income

at June 30, 2014

All amounts in thousands of reais 

 

  

                       
     

Note

 

Q2/14

 

YTD/14

 

Q2/13

 

YTD/13

     

2.1.1(b)

 

 

 

 

 

Revised

 

Revised

                       

Net sales revenue

 

22

 

10,853,109

 

22,695,735

 

9,747,244

 

19,248,414

 

Cost of products sold

     

(9,599,795)

 

(19,924,421)

 

(8,654,081)

 

(17,144,235)

         

 

     

 

   

Gross profit

     

1,253,314

 

2,771,314

 

1,093,163

 

2,104,179

         

 

     

 

   

Income (expenses)

     

 

     

 

   
 

Selling and distribution

     

(281,691)

 

(551,200)

 

(245,199)

 

(497,238)

 

General and administrative

     

(289,726)

 

(564,740)

 

(248,368)

 

(501,730)

 

Research and development

     

(32,876)

 

(67,018)

 

(26,677)

 

(51,241)

 

Results from equity investments

 

9(c)

 

592

 

586

 

1,528

 

(3,194)

 

Other operating income (expenses), net

 

23

 

(14,966)

 

174,983

 

(24,914)

 

(53,678)

         

 

     

 

   

Operating profit

     

634,647

 

1,763,925

 

549,533

 

997,098

         

 

     

 

   

Financial results

 

24

 

 

     

 

   
 

Financial expenses

     

(522,589)

 

(1,099,617)

 

(1,002,054)

 

(1,232,967)

 

Financial income

     

44,861

 

61,744

 

330,401

 

453,513

         

 

     

 

   
         

(477,728)

 

(1,037,873)

 

(671,653)

 

(779,454)

         

 

     

 

   

Profit before income tax and

     

 

     

 

   

social contribution

     

156,919

 

726,052

 

(122,120)

 

217,644

         

 

     

 

   
 

Current and deferred income tax and social contribution

 

16

 

(32,516)

 

(205,306)

 

(2,965)

 

(109,831)

         

 

     

 

   

Profit for the period

     

124,403

 

520,746

 

(125,085)

 

107,813

         

 

     

 

   

Attributable to:

     

 

     

 

   
 

Company's shareholders

     

128,477

 

533,783

 

(114,087)

 

101,920

 

Non-controlling interest in Braskem Idesa

     

(4,074)

 

(13,037)

 

(10,998)

 

5,893

         

 

     

 

   

Profit for the period

     

124,403

 

520,746

 

(125,085)

 

107,813

 

 

                The Management notes are an integral part of the financial statements

 

 

 

3

 


 
 

Braskem S.A.

 

Statement of operations and statement of comprehensive income

at June 30, 2014

All amounts in thousands of reais 

 

                     
   

Note

 

Q2/14

 

YTD/14

 

Q2/13

 

YTD/13

   

2.1.1(b)

 

 

 

 

 

Revised

 

Revised

                     

Profit for the period

     

124,403

 

520,746

 

(125,085)

 

107,813

                     

Other comprehensive income:

                   

Items that will be subsequently reclassified to profit or loss

                   

Fair value of cash flow hedge

     

6,893

 

31,583

       

Income tax and social contribution

     

(2,343)

 

(10,738)

       

Fair value of cash flow hedge Braskem Idesa

     

(17,811)

 

(37,867)

       
       

(13,261)

 

(17,022)

 

 

 

 

                     

Exchange variation of foreign sales hedge

 

14.1.1(c)

 

408,812

 

946,688

 

(1,517,598)

 

(1,517,598)

Income tax and social contribution

     

(138,996)

 

(321,874)

 

515,983

 

515,983

       

269,816

 

624,814

 

(1,001,615)

 

(1,001,615)

                     

Foreign currency translation adjustment

     

(44,296)

 

(93,965)

 

111,427

 

108,250

       

 

 

 

 

 

 

 

       

212,259

 

513,827

 

(890,188)

 

(893,365)

                     
                     

Total comprehensive income for the period

     

336,662

 

1,034,573

 

(1,015,273)

 

(785,552)

                     

Attributable to:

                   

Company's shareholders

     

347,783

 

1,063,206

 

(1,009,153)

 

(799,967)

Non-controlling interest in Braskem Idesa

     

(11,121)

 

(28,633)

 

(6,120)

 

14,415

       

 

 

 

 

 

 

 

Total comprehensive income for the period

     

336,662

 

1,034,573

 

(1,015,273)

 

(785,552)

                     
               

YTD/14

 

YTD/13

   

Note

         

Basic and Diluted

 

Basic and Diluted

   

2.1.1(b)

         

 

 

Revised

Profit per share attributable to the shareholders of the Company

                   

of continued operations at the end of the period (R$)

 

21

               

Earnings per share - common

             

0.6705

 

-

Earnings per share - preferred shares class "A"

             

0.6705  

 

0.2959

Earnings per share - preferred shares class "B"

             

0.6062  

 

0.2964

                     

 

 

4

 


 
 

Braskem S.A.

 

Statement of changes in shareholder’s equity

All amounts in thousands of reais 

 

     

Attributed to shareholders' interest

         
             

Revenue reserves

             

Total

       
                     

Additional

 

Other

         

Braskem

 

Non-controlling

 

Total

         

Capital

 

Legal

 

Returns

 

dividends

 

comprehensive

 

Treasury

 

Accumulated

 

shareholders'

 

interest

 

shareholders'

 

Note

 

Capital

 

reserve

 

reserve

 

Earnings

 

proposed

 

income

 

shares

 

profit (loss)

 

interest

 

in Braskem Idesa

 

equity

                                               

At December 31, 2012

   

8,043,222

 

797,979

 

 

337,411

(48,892)

(565,549)

8,564,171

87,813

8,651,984

                                               

Comprehensive income for the period:

 

                                           

Profit for the period

 

 

 

 

 

 

 

 

 

 

101,920

 

101,920

 

5,893

 

107,813

Fair value of cash flow hedge, net of taxes

 

 

 

 

 

 

 

 

(1,001,615)

 

 

 

(1,001,615)

 

 

(1,001,615)

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

99,728

 

 

 

99,728

 

8,522

 

108,250

 

 

 

 

 

 

 

 

 

(901,887)

 

 

101,920

 

(799,967)

 

14,415

 

(785,552)

 

 

                                           

Equity valuation adjustments:

 

                                         

Realization of additional property, plant and equipment price-level restatement, net of taxes

 

 

  

 

 

 

 

 

(13,618)

 

 

13,618

 

 

 

Realization of deemed cost of jointly-controlled investment, net of taxes

 

 

  

 

 

 

 

 

(484)

 

 

484

 

 

 

 

 

 

 

 

 

 

 

 

(14,102)

 

 

14,102

 

 

 

 

 

                                           

Contributions to shareholders:

 

                                           

Absorption of losses

 

 

 

 

(565,549)

 

 

 

 

 

 

565,549

 

 

 

Capital loss from non-controlling interest

 

 

 

 

 

 

 

 

 

 

 

 

35,405

 

35,405

Loss on interest in subsidiary

 

 

 

 

 

 

 

 

 

(1,994)

 

 

 

 

(1,994)

 

 

 

(1,994)

 

 

 

 

 

(565,549)

 

 

 

 

 

 

 

(1,994)

 

 

 

565,549

 

(1,994)

 

35,405

 

33,411

 

 

                                           

At June 30, 2013 (Revised)

2.1.1(b)

 

8,043,222

 

232,430

 

 

 

 

 

 

 

(580,572)

 

(48,892)

 

116,022

 

7,762,210

 

137,633

 

7,899,843

 

 

                                           

At December 31, 2013

 

 

8,043,222

 

232,430

 

26,895

 

28,412

 

354,842

 

(1,092,691)

 

(48,892)

 

 

 

7,544,218

 

137,116

 

7,681,334

 

 

                                           

Comprehensive income for the period:

 

                                           

Profit (loss) for the period

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

533,783

 

533,783

 

(13,037)

 

520,746

Exchange variation of foreign sales hedge, net of taxes

 

 

 

 

 

 

 

 

 

 

 

 

624,814

 

 

 

 

 

624,814

 

 

 

624,814

Fair value of cash flow hedge, net of taxes

 

 

 

 

 

 

 

 

 

 

 

 

(7,555)

 

 

 

 

 

(7,555)

 

(9,467)

 

(17,022)

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

(87,836)

 

 

 

 

 

(87,836)

 

(6,129)

 

(93,965)

 

 

 

 

 

 

 

 

 

 

 

 

 

529,423

 

 

 

533,783

 

1,063,206

 

(28,633)

 

1,034,573

 

 

                                           

Equity valuation adjustments:

 

                                           

Realization of additional property, plant and equipment price-level restatement, net of taxes

 

 

 

 

 

 

 

 

 

 

 

 

(13,620)

 

 

 

13,620

 

 

 

 

 

 

Realization of deemed cost of jointly-controlled investment, net of taxes

 

 

 

 

 

 

 

 

 

 

 

 

(482)

 

 

 

482

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(14,102)

 

 

 

14,102

 

 

 

 

 

 

 

 

                                           

Contributions and distributions to shareholders:

 

                                           

Additional dividends proposed

20(b)

 

 

 

 

 

 

 

 

 

(354,842)

 

 

 

 

 

 

 

(354,842)

 

 

 

(354,842)

 

 

 

 

 

 

 

 

 

 

 

(354,842)

 

 

 

 

 

 

 

(354,842)

 

 

 

(354,842)

 

 

                                           

At June 30, 2014

 

 

8,043,222

 

232,430

 

26,895

 

28,412

 

 

 

(577,370)

 

(48,892)

 

547,885

 

8,252,582

 

108,483

 

8,361,065

                                               

 

 

The Management notes are an integral part of the financial statements

5

 


 
 

Braskem S.A.

 

Statement of cash flows

at June 30, 2014

All amounts in thousands of reais 

 

           

Note

 

Jun/14

 

Jun/13

           

2.1.1(b)

     

Revised

           

 

       

Profit before income tax and social contribution

       

0

 

726,052

 

217,644

           

 

       

Adjustments for reconciliation of profit

       

0

       
 

Depreciation, amortization and depletion

       

 

 

1,002,504

 

971,728

 

Results from equity investments

       

9(c)

 

(586)

 

3,194

 

Interest and monetary and exchange variations, net

       

 

 

567,397

 

512,015

 

Cost amount of the investment sold in the divestment date

       

23

 

(277,338)

 

 

 

Provision for losses and asset write-downs of long-term

       

 

 

4,899

 

43,919

           

 

 

 

 

 

           

 

 

2,022,928

 

1,748,500

           

 

       

Changes in operating working capital

       

 

       
 

Held-for-trading financial investments

       

 

 

(64,543)

 

101,391

 

Trade accounts receivable

       

 

 

35,768

 

(103,943)

 

Inventories

       

 

 

(20,830)

 

(280,945)

 

Taxes recoverable

       

 

 

102,834

 

(109,662)

 

Prepaid expenses

         

(89,478)

 

(80,565)

 

Other receivables

         

(75,020)

 

18,738

 

Trade payables

         

(310,079)

 

534,074

 

Taxes payable

         

(145,337)

 

(8,789)

 

Long-term incentives

         

(9,274)

 

(562)

 

Advances from customers

         

(127,805)

 

200,988

 

Sundry provisions

         

(9,325)

 

(41,539)

 

Other payables

         

59,068

 

363,945

             

 

 

 

Cash from operations

         

1,368,907

 

2,341,631

                   
 

Interest paid

         

(499,792)

 

(512,935)

 

Income tax and social contribution paid

         

(42,366)

 

(34,765)

             

 

 

 

Net cash generated by operating activities

         

826,749

 

1,793,931

                   

Proceeds from the sale of fixed assets

       

0

 

9,968

 

1,141

Proceeds from the sale of investments

       

0

 

315,000

 

233,000

Beginning cash of Quantiq and IQAG

       

2.1.1(b)

 

 

 

9,985

Acquisitions of investments in subsidiaries and associates

       

0

 

 

 

(31)

Acquisitions to property, plant and equipment

       

0

 

(2,657,047)

 

(2,150,379)

Acquisitions of intangible assets

       

0

 

(14,467)

 

(8,264)

Held-for-maturity and available for sale financial investments

         

10,826

 

19,584

             

 

 

 

Net cash used in investing activities

         

(2,335,720)

 

(1,894,964)

                   

Short-term and long-term debt

               
 

Obtained borrowings

         

3,312,446

 

4,584,995

 

Payment of borrowings

         

(3,549,037)

 

(4,382,268)

Project finance

       

13

 

 

 

 

 

Obtained funds

         

1,021,760

 

 

Dividends paid

         

(482,108)

 

(30)

Non-controlling interests in Braskem Idesa

         

(70)

 

32,712

             

 

 

 

Net cash provided by financing activities

         

302,991

 

235,409

                   

Exchange variation on cash of foreign subsidiaries

         

21,015

 

(12,328)

             

 

 

 

Increase (decrease) in cash and cash equivalents

         

(1,184,965)

 

122,048

                   

Represented by

               
 

Cash and cash equivalents at the beginning for the period

         

4,335,859

 

3,287,622

 

Cash and cash equivalents at the end for the period

         

3,150,894

 

3,409,670

             

 

 

 

Increase (decrease) in cash and cash equivalents

       

0

 

(1,184,965)

 

122,048

                     

The Management notes are an integral part of the financial statement

6

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, unless otherwise stated 

 

1.                       Operations 

 

Braskem S.A. is a public corporation headquartered in Camaçari, Bahia (“BA”), which jointly with its subsidiaries (hereinafter “Braskem” or “Company”), operates 36 industrial units, 29 in Brazil, 5 in the United States and 2 in Germany.

 

The Company is controlled by Odebrecht S.A. (“Odebrecht”), which directly and indirectly holds interests of 50.11% and 38.32% in its voting and total capital, respectively.

 

(a)               Significant corporate and operating events impacting these financial statements

 

On December 31, 2013, Braskem S.A. entered into a share sales agreement with Odebrecht Ambiental (“OA”), through which it sold its interest in the subsidiary Distribuidora de Águas Triunfo S.A. (“DAT”) for R$315 million, which were received over the course of the second quarter of 2014.

The assets of DAT were shown in the balance sheet of December 31, 2013 as “assets available for sale”. DAT did not register results or hold liabilities in the year ended on December 31, 2013.

On February 3, 2014, the Extraordinary Shareholders’ Meeting of DAT approved the change in its management and consequently the transfer of the management of the operations from Braskem to OA, upon the recognition of a gain of R$277,338 (Note 23).

 

Other corporate events of 2013 and which did not produce significant impact on these financial statements were presented in the 2013 annual financial statements of the Company in Note 1(b).

 

(b)               Solvay Indupa

 

On December 17, 2013, Braskem S.A. entered into a share purchase agreement (“Agreement”) with Solvay Argentina S.A. (“Solvay Argentina”), by which it committed to acquire, upon fulfillment of certain conditions envisaged in the Agreement ("Acquisition"), 292,453,490 shares representing 70.59% of the total and voting capital of Solvay Indupa S.A.I.C. (“Solvay Indupa”), at the unit price of US$0.085, to be paid on the date of consummation of the acquisition. The acquisition price is based on the Enterprise Value of US$ 290 million.

 

Solvay Indupa, which produces PVC and caustic soda, has two integrated production sites located in: (i) Santo André, São Paulo, with the capacity to produce 300 kton of PVC* and 170 kton of caustic soda*; and (ii) Bahía Blanca in the Province of Buenos Aires, Argentina, with the capacity to produce 240 kton of PVC* and 180 kton of caustic soda*.

 

Solvay Indupa holds (i) 158,534,671 shares in Solvay Indupa do Brasil S.A. (“Indupa Brasil”) representing 99.99% of its total and voting capital; and (ii) 1,010,638 shares in Solalban Energía S.A. (“Solalban”) representing 58.00% of its total and voting capital.

 

On December 18, 2013, Braskem submitted to the Securities and Exchange Commission of Argentina (“CNV”) a proposal to carry out a public tender offer for shares representing 29.41% of the capital of Solvay Indupa traded on the Buenos Aires Stock Exchange, pursuant to applicable legislation. This initial proposal was not fully accepted by CNV, and on February 21, 2014 Braskem submitted a new proposal, which is still under analysis by CNV. Moreover, Braskem also intends to cancel the registration of Solvay Indupa do Brasil with the Securities and Exchange Commission of Brazil (CVM).

 

7

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, unless otherwise stated 

 

The Brazil’s antitrust agency CADE (Conselho Administrativo de Defesa Econômica) issued on June 24, 2014, opinion challenging the operation, however, this opinion has no power of decision or binding, as a first step of the analysis process operation. The plenary CADE shall enjoy the said procedure until the end of this year.

 

* Unaudited

 

(c)               Effect of foreign exchange variation

 

The Company is exposed to foreign exchange variation on the balances and transactions made in currencies other than its functional currencies, particularly in U.S. dollar, such as financial investments, trade accounts receivable, trade payables, borrowings and sales. In addition to the exchange effect of the U.S. dollar in relation to the Brazilian real, Braskem is exposed to the U.S. dollar through its subsidiaries abroad, particularly those where the functional currency is the euro and the Mexican peso. The balances of assets and liabilities are translated based on the exchange rate at the end of each period, while transactions are based on the effective exchange rate on the date of each operation.

 

The following table shows the U.S. dollar average and end-of-period exchange rates for the periods in this report:

 

 

End of period rate

 

 

 

 

 

 

 

               

U.S. dollar - Brazilian real, June/2014

2.2025

 

U.S. dollar - Mexican peso, June/2014

12.9710

 

U.S. dollar - euro, June/2014

0.7305

U.S. dollar - Brazilian real, Dec/2013

2.3426

 

U.S. dollar - Mexican peso, Dec/2013

13.1005

 

U.S. dollar - euro, Dec/2013

0.7260

Devaluation of the U.S. dollar in relation to the Brazilian real

-5.98%

 

Devaluation of the U.S. dollar in relation to the Mexican peso

-0.99%

 

Appreciation of the U.S. dollar in relation to the euro

0.61%

               

Average rate for the period

 

 

 

 

 

 

 

               

U.S. dollar - Brazilian real, June/2014

2.2974

 

U.S. dollar - Mexican peso, June/2014

13.1143

 

U.S. dollar - euro, June/2014

0.7297

U.S. dollar - Brazilian real, June/2013

2.0333

 

U.S. dollar - Mexican peso, June/2013

12.5571

 

U.S. dollar - euro, June/2013

0.7619

Appreciation of the U.S. dollar in relation to the Brazilian real

12.99%

 

Appreciation of the U.S. dollar in relation to the Mexican peso

4.44%

 

Devaluation of the U.S. dollar in relation to the euro

-4.23%

 

 

2.                       Summary of significant accounting policies

 

2.1.                 Basis of preparation

 

This Quarterly Information should be read together with the financial statements of Braskem as of December 31, 2013, which were prepared and presented in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB).

 

The preparation of the quarterly information requires the use of certain critical accounting estimates. It also requires the Management of the Company to exercise its judgment in the process of applying its accounting policies. There were no significant changes in the assumptions and judgments made by the Company’s management in the use of estimates for the preparation of the Quarterly Information in relation to those used in the December 31, 2013 financial statements.

 

On June 30, 2014, the Company started to include in its balance sheet the net value, per legal entity, of the amounts related to deferred income and social contribution tax assets and liabilities on its profit, due to due legal right of each entity to offset these amounts. The balance sheet at December 31, 2013 was revised to reflect such adjustment, as shown in Note 2.1.1 (a).

 

 

8

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, unless otherwise stated 

 

2.1.1        Revised 

 

The financial statements for the period ended December 31, 2013 and June 30, 2013 were revised as follows:

 

(a)      December 31, 2013 – The balance sheets and respective notes were revised to reflect deferred Income Tax (“IR”) and Social Contribution (“CSL”) on a net basis (Note 2.1); and

 

The effects of this revision are shown below:

 

Balance Sheet

 

   

 

 

 

 

Dec/2013

   

Published

 

Effects

 

Revised

Assets

         
 

Current assets

14,997,128

 

  

 

14,997,128

             
 

Non-current assets

         
 

Deferred income tax and social contribution

2,653,606

 

(1,530,293)

 

1,123,313

 

Other assets

30,695,349

 

 

 

30,695,349

   

33,348,955

 

(1,530,293)

 

31,818,662

             

Total assets

48,346,083

 

(1,530,293)

 

46,815,790

             

Liabilities and shareholders' equity

         
 

Current liabilities

13,594,801

 

  

 

13,594,801

             
 

Non-current liabilities

         
 

Deferred income tax and social contribution

2,393,698

 

(1,530,293)

 

863,405

 

Other liabilities

24,676,250

 

-

 

24,676,250

   

27,069,948

 

(1,530,293)

 

25,539,655

             
 

Shareholders' equity

7,681,334

 

 

 

7,681,334

             

Total liabilities and shareholders' equity

48,346,083

 

(1,530,293)

 

46,815,790

             

 

 

 

 

9

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, unless otherwise stated 

 

(b)   June 30, 2013 – The statement of operations, of changes in equity, of cash flows and respective notes were revised to include the results of the operations of Quantiq Distribuidora Ltda. (“Quantiq”) and IQAG Armazéns Gerais Ltda. (“IQAG”) as a result of the decision by the Company not to sell these assets.

 

The effects of these revisions were as follows:

 

Statement of operations for the period

 

 

   

Jun/2013

             
   

Published

 

Effects

 

Revised

             

Net sales revenue

18,823,375

 

425,039

 

19,248,414

 

Cost of products sold

(16,786,296)

 

(357,939)

 

(17,144,235)

             

Gross profit

2,037,079

 

67,100

 

2,104,179

             

Income (expenses)

         
 

Selling and distribution

(486,568)

 

(10,670)

 

(497,238)

 

General and administrative

(465,159)

 

(36,571)

 

(501,730)

 

Research and development

(51,241)

   

(51,241)

 

Results from equity investments

(3,194)

   

(3,194)

 

Other operating income (expenses), net

(54,158) 

 

480

 

(53,678)

   

 

 

 

   

Operating profit

976,759

 

20,339

 

997,098

             

Financial results

         
 

Financial expenses

(1,225,814)

 

(7,153)

 

(1,232,967)

 

Financial income

452,831

 

682

 

453,513

   

 

 

 

   
   

(772,983)

 

(6,471)

 

(779,454)

             

Profit before income tax and

         

social contribution

203,776

 

13,868

 

217,644

             
 

Current and deferred income tax and social contribution

(105,197) 

 

(4,634)

 

(109,831)

             

Profit for the period

98,579

 

9,234

 

107,813

             

Attributable to:

         
 

Company's shareholders

92,686

 

9,234

 

101,920

 

Non-controlling interest in Braskem Idesa

5,893  

    

5,893

             
   

98,579

 

9,234

 

107,813

             

 

 

 

10

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, unless otherwise stated 

 

Statement of cash flows

 

   

 

 

 

 

Jun/2013

   

Published

 

Effects

 

Revised

             

Profit before income tax and social contribution

203,776

 

13,868

 

217,644

         

-

Adjustments for reconciliation of profit

      

-

 

Depreciation, amortization and depletion

967,935

 

3,793

 

971,728

 

Results from equity investments

3,194

 

3,194

 

Interest and monetary and exchange variations, net

511,995

 

20

 

512,015

 

Provision for losses and asset write-downs of long-term

43,919

   

43,919

             
   

1,730,819

 

17,681

 

1,748,500

             

Changes in operating working capital

         
 

Held-for-trading financial investments

101,391

 

 

 

101,391

 

Trade accounts receivable

(82,981)

 

(20,962)

 

(103,943)

 

Inventories

(269,298)

 

(11,647)

 

(280,945)

 

Taxes recoverable

(98,296)

 

(11,366)

 

(109,662)

 

Prepaid expenses

(79,802)

 

(763)

 

(80,565)

 

Other receivables

(13,013)

 

31,751

 

18,738

 

Trade payables

537,764

 

(3,690)

 

534,074

 

Taxes payable

(8,645)

 

(144)

 

(8,789)

 

Long-term incentives

(562)

 

 

 

(562)

 

Advances from customers

201,441

 

(453)

 

200,988

 

Sundry provisions

(42,216)

 

677

 

(41,539)

 

Other payables

365,045

 

(1,100)

 

363,945

             

Cash from (used in) operations

2,341,647

 

(16)

 

2,341,631

             
 

Interest paid

(512,935)

 

(512,935)

 

Income tax and social contribution paid

(34,765)

   

(34,765)

             

Net cash generated (used in) by operating activities

1,793,947

 

(16)

 

1,793,931

             

Proceeds from the sale of fixed assets

1,141

   

1,141

Proceeds from the sale of investments

233,000

   

233,000

Beginning cash of Quantiq and IQAG

 

 

9,985

 

9,985

Acquisitions of investments in subsidiaries and associates

(31) 

 

(31)

Acquisitions to property, plant and equipment

(2,150,117)

 

(262)

 

(2,150,379)

Acquisitions of intangible assets

(8,264)

 

(8,264)

Held-for-maturity and available for sale financial investments

19,584

 

19,584

             

Net cash generated (used in) investing activities

(1,904,687)

 

9,723

 

(1,894,964)

           

Short-term and long-term debt

       
 

Obtained borrowings

4,584,995

   

4,584,995

 

Payment of borrowings

(4,381,882)

 

(386)

 

(4,382,268)

Dividends paid

(30)

   

(30)

Non-controlling interests in Braskem Idesa

32,712

   

32,712

             

Net cash provided (used in) by financing activities

235,795

 

(386)

 

235,409

             

Exchange variation on cash of foreign subsidiaries

(12,328)

     

(12,328)

             

Increase in cash and cash equivalents

112,727

 

9,321

 

122,048

             

Represented by

         
 

Cash and cash equivalents at the beginning for the period

3,287,622

 

3,287,622

 

Cash and cash equivalents at the end for the period

3,400,349

 

9,321

 

3,409,670

             

Increase in cash and cash equivalents

112,727

 

9,321

 

122,048

             

 

11

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, unless otherwise stated 

 

2.1.2        Quarterly information

 

The Quarterly Information was prepared and is being presented in accordance with the pronouncement IAS 34 - Interim Financial Reporting, which establish the minimum content for interim financial statements.

 

2.2.                 Accounting policies

 

There were no changes in the accounting practices used in the preparation of the Quarterly Information in relation to those presented in the December 31, 2013 financial statements, except as presented in Note 2.2.1.

 

2.2.1      Deferred income tax and social contribution

 

Deferred income and social contribution tax assets and liabilities are stated at their net value in the balance sheet when there is a legal and enforceable right to offset current income and social contribution taxes, related to the same legal entity and tax authority.

 

2.2.2      Transaction costs with debt renegotiation

 

Costs incurred with debt renegotiation that meet the qualitative and quantitative criteria determined by the standards for reclassification as debt exchange, are deemed transaction costs and amortized through the maturity of the renegotiated debt. The effects of this change in accounting practice are described in Note 12 (a).

 

 

12

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, unless otherwise stated 

 

2.3.                 Consolidated quarterly information

 

The consolidated quarterly information includes the quarterly information of Braskem companies in which it, directly or indirectly, maintains a controlling equity interest or controls the activities, as presented below:

 

 

         

Total interest - %

         

Headquarters

       
         

(Country)

 

Jun/14

 

Dec/13

Direct and Indirect subsidiaries

               

Braskem America Finance Company ("Braskem America Finance")

 

0

 

USA

 

100.00

 

100.00

Braskem America, Inc. (“Braskem America”)

 

0

 

USA

 

100.00

 

100.00

Braskem Argentina S.A. (“Braskem Argentina”)

 

0

 

Argentina

 

100.00

 

100.00

Braskem International GmbH ("Braskem Austria")

 

0

 

Austria

 

100.00

 

100.00

Braskem Austria Finance GmbH ("Braskem Austria Finance")

 

0

 

Austria

 

100.00

 

100.00

Braskem Chile Ltda. ("Braskem Chile")

 

0

 

Chile

 

100.00

 

100.00

Braskem Europe GmbH ("Braskem Alemanha")

 

0

 

Germany

 

100.00

 

100.00

Braskem Finance Limited (“Braskem Finance”)

 

0

 

Cayman Islands

 

100.00

 

100.00

Braskem Idesa S.A.P.I ("Braskem Idesa")

 

0

 

Mexico

 

75.00

 

75.00

Braskem Idesa Servicios S.A. de CV ("Braskem Idesa Serviços")

 

0

 

Mexico

 

75.00

 

75.00

Braskem Importação e Exportação Ltda. ("Braskem Importação")

 

0

 

Brazil

 

100.00

 

100.00

Braskem Incoporated limited ("Braskem Inc")

 

0

 

Cayman Islands

 

100.00

 

100.00

Braskem Mexico, S. de RL de CV ("Braskem México")

 

0

 

Mexico

 

100.00

 

100.00

Braskem Mexico Servicios S. RL de CV ("Braskem México Serviços")

 

0

 

Mexico

 

100.00

 

100.00

Braskem Netherlands B.V (“Braskem Holanda”)

 

0

 

Netherlands

 

100.00

 

100.00

Braskem Participações S.A. ("Braskem Participações")

 

0

 

Brazil

 

100.00

 

100.00

Braskem Petroquímica Chile Ltda. (“Petroquímica Chile”)

 

0

 

Chile

 

100.00

 

100.00

Braskem Petroquímica Ibérica, S.L. ("Braskem Espanha")

 

0

 

Spain

 

100.00

 

100.00

Braskem Petroquímica Ltda ("Braskem Petroquímica")

 

0

 

Brazil

 

100.00

 

100.00

Braskem Qpar S.A. ("Braskem Qpar")

 

0

 

Brazil

 

100.00

 

100.00

Common Industries LTD. ("Common")

 

(i)

 

British Virgin Islands

 

100.00

 

100.00

DAT

 

0

 

Brazil

 

 

 

100.00

IQAG

 

0

 

Brazil

 

100.00

 

100.00

Lantana Trading Co. Inc. (“Lantana”)

 

0

 

Bahamas

 

100.00

 

100.00

Norfolk Trading S.A. (“Norfolk”)

 

(i)

 

Uruguay

 

100.00

 

100.00

Politeno Empreendimentos Ltda. (“Politeno Empreendimentos”)

 

0

 

Brazil

 

100.00

 

100.00

Quantiq

 

0

 

Brazil

 

100.00

 

100.00

     

0

           

Specific Purpose Entity ("SPE")

 

0

           

Fundo de Investimento Multimercado Crédito Privado Sol (“FIM Sol”)

 

0

 

Brazil

 

100.00

 

100.00

Fundo de Investimento Caixa Júpiter Multimercado Crédito Privado

 

0

           

Longo Prazo ("Fundo Júpiter)

 

0

 

Brazil

 

100.00

 

100.00

 

 

(i) Subsidiaries in the process of dissolution.

 

 

13

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, unless otherwise stated 

 

 

2.4.                 New standards

 

(i)                      Accounting standard that will be in force in 2014

 

The following standards will be in force in 2014 and will not cause any impacts on the consolidated financial statements of the Company:

 

•      IFRIC 21 – Levies; and

•      IAS 39 – Novation of Derivatives and Continuation of Hedge Accounting - Amendments to IAS 39.

 

(ii)                    Accounting standard that will be in force after 2014

 

The Company is analyzing the impacts of adopting the standards issued by IASB in 2014 that will be in force after 2014:

 

•      IAS 16 and IAS 38 (applies to fiscal years beginning as of January 1, 2016) – Clarification of Acceptable Methods of Depreciation and Amortization - Amendments to IAS 16 and IAS 38;

•      IFRS 15 (applies to fiscal years beginning as of January 1, 2017) – Revenue from Contracts with Customers; and

•      IFRS 9 (applies to fiscal years beginning as of January 1, 2018) – Financial Instruments.

 

 

3.                       Cash and cash equivalents

 

The information on cash and cash equivalents were presented in the 2013 annual financial statements of the Company, in Note 7.

 

   

Jun/14

 

Dec/13

       

 

Cash and banks (i)

330,420

 

987,824

Cash equivalents:

     
 

Domestic market

1,821,268

 

1,906,790

 

Foreign market (i)

999,206

 

1,441,245

Total

3,150,894

 

4,335,859

         

 

(i)         On June 30, 2014, it includes cash and banks of R$86,789 (R$656,427 on December 31, 2013) and cash equivalents of R$99,072 (R$153,448 on December 31, 2013) of the subsidiary Braskem Idesa, available for use in its project.

 

 

14

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, unless otherwise stated 

 

4.                       Financial investments

 

 The information on financial investments was presented in the 2013 annual financial statements of the Company, in Note 8.

 

     

Jun/14

 

Dec/13

Held-for-trading

       
 

Investments in FIM Sol

-

74,316

 

61,670

 

Investments in foreign currency

-

2,534

 

3,773

 

Shares

-

1,170

 

1,170

Loans and receivables

-

     
 

Investments in FIM Sol

-

61,148

 

 

Held-to-maturity

-

     
 

Quotas of investment funds in credit rights

-  

37,165

 

40,696

 

Restricted deposits

-

1,596

 

 

 

Time deposit investment

-

 

 

189

 

Investments in foreign currency

(i)

330,858

 

469,376

 

Compensation of investments in foreign currency

(i)  

(330,858)

 

(469,376)

Total

-

177,929

 

107,498

   

-

     

In current assets

-

155,307

 

86,719

In non-current assets

-

22,622

 

20,779

Total

-

177,929

 

107,498

   

-

     

 

(i)       On June 30, 2014, Braskem Holanda had a financial investments held-to-maturity that was irrevocably offset by an export prepayment agreement with Braskem S.A., in the same amount, as provided for in the credit assignment agreement entered into between these two companies and Banco Bradesco (Note 12). This accounting offset was carried out in accordance with IAS 32, which provides for the possibility of offsetting financial instruments when there is intent and rightfully executable right to realize an asset and settle a liability simultaneously.

 

 

15

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, unless otherwise stated 

 

5.                       Trade accounts receivable

 

 

The information on trade accounts receivable was presented in the 2013 annual financial statements of the Company, in Note 9.

 

 

                 

Jun/14

 

Dec/13

Customers

                 

 

 

Domestic market

             

1,569,071

 

1,578,008

 

Foreign market

             

1,572,353

 

1,577,140

Allowance for doubtful accounts

           

(314,765)

 

(282,753)

Total

             

2,826,659

 

2,872,395

                       

In current assets

             

2,799,470

 

2,810,520

In non-current assets

             

27,189

 

61,875

Total

             

2,826,659

 

2,872,395

                       

 

 

6.                       Inventories 

 

The information on inventories was presented in the 2013 annual financial statements of the Company, in Note 10.

 

 

                 

Jun/14

 

Dec/13

                     

 

Finished goods

             

3,573,288

 

3,429,979

Raw materials, production inputs and packaging

           

1,052,582

 

1,113,272

Maintenance materials

             

234,100

 

230,822

Advances to suppliers

             

229,345

 

236,672

Imports in transit and other

           

105,978

 

139,562

Total

             

5,195,293

 

5,150,307

                       

In current assets

             

5,118,116

 

5,033,593

In non-current assets

             

77,177

 

116,714

Total

             

5,195,293

 

5,150,307

                       

 

 

16

 


 

 

 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, except where stated otherwise 

 

7.                       Related parties

 

The information concerning related parties was presented in the 2013 annual financial statements of the Company, in Note 11.

 

   

Balances at June 30, 2014

   

Assets

 

Liabilities

   

Current

 

Non-current

 

Current

   

Trade accounts receivable

 

Related parties

 

Other

 

Total

 

Related parties

 

Other

 

Total

 

Trade payables

       

Receivable notes

 

Other receivable

       

 

Loan agreements

 

Other receivable

 

 

 

 

 

 
                     

 

 

 

 

 

 

 

 

 

 

Jointly-controlled investment

                                       

Refinaria de Petróleo

                                       

Riograndense S.A. ("RPR")

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,009

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,009

                   

 

 

 

 

 

 

 

 

 

 

 

Associated companies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Borealis Brasil S.A. ("Borealis")

6,731

 

187

 

 

 

 

 

6,918

 

 

 

 

 

 

 

 

 

 

   

6,731

 

187

 

 

 

 

 

6,918

 

 

 

 

 

 

 

 

 

 

                   

 

 

 

 

 

 

 

 

 

 

 

Related companies

                                       

Odebrecht and subsidiaries

 

4,483

 

108,984

 

50

 

72,963

(i)

186,480

 

 

 

 

 

77,177

(i)

77,177

 

381,991

Petrobras and subsidiaries

 

72,474

 

9,925

 

46,911

 

41,413

(i)

170,723

 

69,711

 

66,302

 

 

 

136,013

 

1,756,604

Other

 

14,626

 

 

 

 

 

 

 

14,626

 

 

 

 

 

 

 

 

 

 

   

91,583

 

118,909

 

46,961

 

114,376

 

371,829

 

69,711

 

66,302

 

77,177

 

213,190

 

2,138,595

                   

 

 

 

 

 

 

 

 

 

 

 
                   

 

 

 

 

 

 

 

 

 

 

 

Total

 

98,314

 

119,096

 

46,961

 

114,376

 

378,747

 

69,711

 

66,302

 

77,177

 

213,190

 

2,140,604

                     

 

 

 

 

 

 

 

 

 

 

 

(i)         Amount in “inventory – advance to suppliers” (Note 6)

 

 

 

 

Income statement transactions from January to June 30, 2014

       

Purchases of

     

Cost of

       

raw materials,

 

Financial

 

production/general

   

Sales

 

services and

 

income

 

and administrative

   

of products

 

utilities

 

(expenses)

 

expenses

                 

Jointly-controlled investment

               

RPR

 

5,745

 

22,652

 

 

 

 

Odebrecht Comercializadora de Energia S.A. ("OCE")

 

 

 

314

 

 

 

 

   

5,745

 

22,966

 

   

 

 

                 

Associated companies

               

Borealis

 

91,829

 

 

 

 

 

 

   

91,829

 

 

 

 

 

 

                 

Related companies

               

Odebrecht and subsidiaries

 

18,479

 

177,163

 

-

 

 

Petrobras and subsidiaries

 

737,371

 

9,452,398

 

2,364

 

 

Other

 

12,291

 

5,477

 

-

 

 

   

768,141

 

9,635,038

 

2,364

 

 

                 

Post employment benefit plan

               

Odebrecht Previdência Privada ("Odeprev")

 

 

 

 

 

 

 

10,811

   

 

 

 

 

 

 

10,811

                 
                 

Total

 

865,715

 

9,658,004

 

2,364

 

10,811

 

 

 

 

         

 

 

 

17

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, except where stated otherwise 

 

 

 

   

Balances at December 31, 2013

   

Assets

 

Liabilities

   

Current

 

Non-current

 

Current

   

Trade accounts receivable

 

Related parties

 

Other

 

Total

 

Related parties

 

Other

 

Total

 

Trade payables

       

Receivable notes

 

Other receivable

       

 

Loan agreements

 

Other receivable

 

 

 

 

 

 
                     

 

 

 

 

 

 

 

 

 

 

Jointly-controlled investment

                                       

RPR

 

 

 

 

 

 

 

150

(i)

150

 

 

 

 

 

 

 

 

 

3,106

   

 

 

 

 

 

 

150

 

150

 

 

 

 

 

 

 

 

 

3,106

                   

 

 

 

 

 

 

 

 

 

 

 

Associated companies

                 

 

 

 

 

 

 

 

 

 

 

 

Borealis

 

11,368

 

187

 

 

 

 

 

11,555

 

 

 

 

 

 

 

 

 

 

   

11,368

 

187

 

 

 

 

 

11,555

 

 

 

 

 

 

 

 

 

 

                   

 

 

 

 

 

 

 

 

 

 

 

Related companies

                                       

Odebrecht and subsidiaries

 

440

 

 

 

78,068

 

37,436

(ii)

115,944

 

 

 

 

 

782,565

(iii)

782,565

 

533,498

Petrobras and subsidiaries

 

99,018

 

9,925

 

36,307

 

42,013

(ii)

187,263

 

67,348

 

66,301

 

 

 

133,649

 

1,833,040

Other

 

15,135

 

 

 

 

 

 

 

15,135

 

 

 

 

 

 

     

 

   

114,593

 

9,925

 

114,375

 

79,449

 

318,342

 

67,348

 

66,301

 

782,565

 

916,214

 

2,366,538

                   

 

 

 

 

 

 

 

 

 

 

 

Total

 

125,961

 

10,112

 

114,375

 

79,599

 

330,047

 

67,348

 

66,301

 

782,565

 

916,214

 

2,369,644

 

(i)    Amounts in “dividends and interest on capital”.

(ii)   Amount in “inventory – advance to suppliers” (Note 6)

(iii) Amount of R$665,851 under “Property, plant and equipment” related to ongoing construction works, and R$116,714 under “inventory – advance to suppliers” (Note 6).

 

 

 

Income statement transactions from January to June 30, 2013

       

Purchases of

     

Cost of

       

raw materials,

 

Financial

 

production/general

   

Sales

 

services and

 

income

 

and administrative

   

of products

 

utilities

 

(expenses)

 

expenses

                 

Jointly-controlled investment

               

RPR

 

10,521

 

20,316

 

 

 

 

   

10,521

 

20,316

 

 

 

 

                 

Associated companies

               

Borealis

 

180,194

 

 

 

 

 

 

Other

 

18,556

 

4,352

 

 

 

 

   

198,750

 

4,352

 

 

 

 

                 

Related companies

               

Odebrecht and subsidiaries

 

10,798

 

142,166

 

 

 

 

Petrobras and subsidiaries

 

667,142

 

8,930,305

 

2,206

 

 

   

677,940

 

9,072,471

 

2,206

 

 

                 

Post employment benefit plan

               

Odeprev

 

 

 

 

 

 

 

8,840

   

 

 

 

 

 

 

8,840

                 
                 

Total

 

887,211

 

9,097,139

 

2,206

 

8,840

 

 

 

 

         

 

 

18

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, except where stated otherwise 

 

(a)               Key management personnel

 

 

 

Non-current liabilities

 

Jun/14

 

Dec/13

         

Long-term incentives

(i)

 

 

2,333

Total

 

 

 

2,333

         
     
     

Income statement transactions

 

Jun/14

 

Jun/13

Remuneration

       

Short-term benefits to employees and managers

 

7,736 

 

23,432

Post-employment benefit

 

143

 

140

Long-term incentives

 

560

 

51

Total

 

8,439

 

23,623

         

 

(i)       In a meeting held on May 7, 2014, the Board of Directors approved the termination of the long-term incentive plan. The plan had been created in September 2005 and was not based on the Company’s shares. Through this plan, members of strategic programs could acquire securities issued by the Company called “Certificates of Investment Units”. These securities did not entitle their holder to the status of Braskem shareholder or to any rights or privileges inherent to such status, especially voting and other political rights. The amount paid to terminate the plan was R$14,002.

 

 

19

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, except where stated otherwise 

 

8.                       Taxes recoverable

 

The information on taxes recoverable was presented in the 2013 annual financial statements of the Company, in Note 12.

 

     

Jun/14

 

Dec/13

Brazil

       
 

IPI

 

26,449

 

28,701

 

Value-added tax on sales and services (ICMS) - normal operations

 

499,415

 

738,282

 

ICMS - credits from PP&E

 

130,077

 

123,354

 

Social integration program (PIS) and social contribution on revenue (COFINS) - normal operations

 

733,745

 

719,448

 

PIS and COFINS - credits from PP&E

 

284,364

 

269,006

 

PIS and COFINS - Law 9,718/98

 

11,526

 

24,207

 

PIS - Decree-Law 2,445 and 2,449/88

 

91,230

 

88,339

 

IR and CSL

 

541,291

 

542,686

 

REINTEGRA program

 

198,996

 

267,049

 

Other

 

133,270

 

155,965

     

 

 

 

Other countries

 

 

 

 

 

Value-added tax

(a)

810,642

 

563,650

 

Income tax

 

1,730

 

2,516

Total

 

3,462,735

 

3,523,203

           

Current assets

 

2,363,511

 

2,237,213

Non-current assets

 

1,099,224

 

1,285,990

Total

 

3,462,735

 

3,523,203

           

 

 

(a)                    Value added tax (“VAT”)

 

On June 30, 2014, this line included:

 

(i)     R$34,018 from sales by Braskem Alemanha to other countries. These credits are refunded in cash by the local government; and

 

(ii)   R$776,624 from purchases of machinery and equipment for the Ethylene XXI Project. These credits will be reimbursed, in cash, by the local government, after their validation.

 

The Management expects these credits to be received in the short term based on the legislation of the countries involved.

 

 

20

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, except where stated otherwise 

 

9.                       Investments 

 

The information related to investments was presented in the Company’s annual financial statements, in Note 16.

 

(a)                    Information on investments

 

 

           

Interest in total capital

 

Adjusted net profit (loss)

 

Adjusted

           

total (%) - Jun/2014

 

for the period

 

equity

       

Note

 

Direct

 

Direct and Indirect

 

Jun/2014

 

Jun/2013

 

Jun/14

 

Dec/13

       

2.1.1(b)

             

Revised

     

 

           

 

 

 

 

 

     

 

   

Jointly-controlled investment

0

   

 

 

 

 

 

 

 

 

 

 

 

 

RPR

 

-

   

33.20

 

33.20

 

(1,236)

 

6,483

 

123,743

 

124,980

 

OCE

 

(i)

   

20.00

 

20.00

 

224

 

 

 

554

 

689

 

Propilsur

-

       

49.00

 

(88)

 

(2,433)

 

111,561

 

109,300

     

0

                         

Associates

 

0

   

 

 

 

 

 

 

 

 

 

 

 

 

Borealis

0

   

20.00

 

20.00

 

4,345

 

5,492

 

166,746

 

166,746

 

Companhia de Desenvolvimento

0

   

 

                   
 

Rio Verde ("Codeverde")

0

   

35.97

 

35.97

 

(596)

 

(406)

 

46,342

 

46,342

 

 

(i)              Shares acquired in July 2013.

 

(b)                    Changes in investments

 

 

             

Equity in results of investees

       
         

Dividends

   

Currency

   
     

Balance at

 

and interest

 

Effect

 

translation

 

Balance at

     

Dec/13

 

on equity

 

of results

 

adjustments

 

Dec/13

Jointly-controlled investment

                     

RPR

   

41,500

 

 

 

(410)

 

 

 

41,090

OCE

   

138

 

(3)

 

(24)

 

 

 

111

Propilsur

   

40,398

     

(74)

 

633

 

40,957

     

82,036

 

(3)

 

(508)

 

633

 

82,158

                       

Associate

                     

Borealis

   

33,349

 

 

 

957

 

 

 

34,306

     

33,349

 

 

 

957

 

 

 

34,306

                       

Total

   

115,385

 

(3)

 

449

 

633

 

116,464

                       

 

 

(c)                    Equity accounting results - breakdown

 

 

               

Jun/2014

 

Jun/2013

                     

Equity in the results

             

448

 

(3,194)

Other

             

138

 

-

               

586

 

(3,194)

 

21

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, except where stated otherwise 

 

10.                   Property, plant and equipment

 

The information on property, plant and equipment was presented in the Company’s 2013 annual financial statements, in Note 17.

 

       

 

 

 

 

Jun/2014

 

 

 

 

 

Dec/2013

           

Accumulated

         

Accumulated

   
           

depreciation/

         

depreciation/

   
       

Cost

 

depletion

 

Net

 

Cost

 

depletion

 

Net

                             

Land

   

422,692

 

 

 

422,692

 

428,908

 

 

 

428,908

Buildings and improvements

 

1,839,758

 

(814,950)

 

1,024,808

 

1,830,245

 

(783,084)

 

1,047,161

Machinery, equipment and installations

 

25,954,081

 

(11,873,845)

 

14,080,236

 

25,671,115

 

(11,044,102)

 

14,627,013

Projects in progress

   

10,683,802

 

 

 

10,683,802

 

8,832,906

 

 

 

8,832,906

Other

   

971,189

 

(495,187)

 

476,002

 

936,228

 

(458,668)

 

477,560

Total

   

39,871,522

 

(13,183,982)

 

26,687,540

 

37,699,402

 

(12,285,854)

 

25,413,548

                             

 

 

Impairment test for property, plant and equipment

 

There were no significant events or circumstances in the period ended June 30, 2014 that indicate the need for impairment testing on the property, plant and equipment.

 

11.                   Intangible assets

 

The information on intangible assets was presented in the 2013 annual financial statements of the Company, in Note 18.

 

       

 

 

 

 

Jun/2014

 

Dec/2013

           

Accumulated

         

Accumulated

   
       

Cost

 

amortization

 

Net

 

Cost

 

amortization

 

Net

                             

Goodwill based on future profitability

 

3,187,722  

 

(1,128,804)

 

2,058,918

 

3,187,722

 

(1,128,804)

 

2,058,918

Trademarks and patents

 

210,845

 

(86,253)

 

124,592

 

208,574

 

(82,176)

 

126,398

Software and use rights

 

482,935

 

(270,928)

 

212,007

 

473,560

 

(244,924)

 

228,636

Contracts with customers and suppliers

 

691,476  

 

(235,720)

 

455,756

 

712,499

 

(213,821)

 

498,678

Total

   

4,572,978

 

(1,721,705)

 

2,851,273

 

4,582,355

 

(1,669,725)

 

2,912,630

                             

 

 

Impairment of intangible assets with definite and indefinite useful life

 

There were no significant events or circumstances in the period ended June 30, 2014 that indicated the need for updating the impairment testing of intangible assets with indefinite useful life made in October 2013, or that indicated the need to perform an impairment testing of intangible assets with definite useful life.

  

 

22

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, except where stated otherwise 

 

12.                   Borrowings 

 

The information on borrowings was presented in the 2013 annual financial statements of the Company, in Note 19.

 

         

Annual financial charges

       
             

Average interest (unless otherwise stated)

       
         

Monetary restatement

   

Jun/14

 

Dec/13

Foreign currency

                 

 

 

Bonds and Medium term notes (MTN)

     

Note 12 (a)

 

Note 12 (a)

 

9,793,844

 

10,432,526

 

Advances on exchange contracts

     

US dollar exchange variation

 

0.88%

 

165,188

 

117,132

 

Export prepayment

     

Note 12 (b)

 

Note 12 (b)

 

375,607

 

540,744

 

BNDES

     

Note 12 (c)

 

Note 12 (c)

 

377,567

 

453,065

 

Export credit notes

     

Note 12 (d)

 

Note 12 (d)

 

792,207

 

843,060

 

Working capital

     

US dollar exchange variation

 

1.68% above Libor

 

981,971

 

633,632

 

Other

     

US dollar exchange variation

 

4.00% above Libor

 

1,218

 

1,268

 

Transactions costs

             

(268,137)

 

(81,375)

                       

Local currency

                   
 

Export credit notes

     

Note 12 (d)

 

Note 12 (d)

 

2,530,186

 

2,528,077

 

BNDES

     

Note 12 (c)

 

Note 12 (c)

 

2,425,382

 

2,464,987

 

BNB/ FINAME/ FINEP/ FUNDES

         

6.44%

 

612,243

 

658,372

 

BNB/ FINAME/ FINEP/ FUNDES

     

TJLP

 

0.42%

 

12,281

 

16,093

 

Other

     

CDI

 

0.04%

 

28,356

 

-

 

Transactions costs

             

(15,834)

 

(5,090)

Total

             

17,812,079

 

18,602,491

                       

Current liabilities

             

1,329,292

 

1,248,804

Non-current liabilities

             

16,482,787

 

17,353,687

Total

             

17,812,079

 

18,602,491

                       

 

(a)                    Bonds and MTN

 

     

Issue amount

     

Interest

   

Issue date

 

 

(US$ in thousands)

 

Maturity

 

(% per year)

 

Jun/14

 

Dec/13

July 1997

   

250,000

 

June 2015

 

9.38

 

129,351

 

152,328

January 2004

   

250,000

 

January 2014

 

11.75

 

-

 

178,897

September 2006

(i)

 

275,000

 

January 2017

 

8.00

 

148,936

 

305,006

June 2008

(i)

 

500,000

 

June 2018

 

7.25

 

328,428

 

1,000,375

May 2010

(i)

 

400,000

 

May 2020

 

7.00

 

106,091

 

940,780

May 2010

   

350,000

 

May 2020

 

7.00

 

778,819

 

828,360

October 2010

   

450,000

 

no maturity date

 

7.38

 

1,008,587

 

1,072,742

April 2011

   

750,000

 

April 2021

 

5.75

 

1,666,091

 

1,772,070

July 2011

   

500,000

 

July 2041

 

7.13

 

1,135,687

 

1,207,927

February 2012

   

250,000

 

April 2021

 

5.75

 

557,221

 

592,666

February 2012

   

250,000

 

no maturity date

 

7.38

 

560,326

 

595,968

May 2012

   

500,000

 

May 2022

 

5.38

 

1,110,787

 

1,181,443

July 2012

   

250,000

 

July 2041

 

7.13

 

567,843

 

603,964

February 2014

(i)

 

500,000

 

February 2024

 

6.45

 

1,130,451

   

May 2014

(i)

 

250,000

 

February 2024

 

6.45

 

565,226

 

-

Total

   

5,725,000

         

9,793,844

 

10,432,526

                       

 

(i)       The Bonds issued in February and May 2014 were primarily to refinance the Bonds issued in September 2006, June 2008 and May 2010. The issues in 2014 were considered as refinancing of previous debt in accordance with IFRS 9, and hence all expenses involved in structuring the operations, including premiums paid to holders of the refinanced bonds, were deemed transaction costs.

 

 

23

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, except where stated otherwise 

 

(b)                    Export prepayments (“EPP”)

 

 

     

Initial amount

               
     

of the transaction

           

Issue date

 

 

(US$ thousand)

 

Maturity

 

Charges (% per year)

 

Jun/14

 

Dec/13

December 2010

 

(i)

100,000

 

December-2017

 

US dollar exchange variation + semiannual Libor + 2.47

 

-  

 

118,505

January 2013

   

200,000

 

November-2022

 

US dollar exchange variation + semiannual Libor + 2.47

 

375,607

 

422,239

Total

   

300,000

         

375,607

 

540,744

                       

 

(i)       Settled early in June 2014.

 

(c)                    BNDES borrowings

 

 

Projects

 

Issue date

 

Maturity

 

Charges (% per year)

 

Jun/2014

 

Dec/2013

                     

Foreign currency

                   

Other

 

2006

 

October-2016

 

US dollar exchange variation + 6.82

 

5,058

 

6,533

Braskem Qpar expansion

 

2006/2007/2008

 

April-2016

 

US dollar exchange variation + 6.67 to 6.82

 

7,668

 

10,389

Green PE plant

 

2009

 

July-2017

 

US dollar exchange variation + 6.60

 

32,228

 

39,838

Limit of credit II

 

2009

 

January-2017

 

US dollar exchange variation + 6.60

 

63,667

 

80,826

New plant PVC Alagoas

 

2010

 

January-2020

 

US dollar exchange variation + 6.60

 

99,303

 

115,082

Limit of credit III

 

2011

 

October-2018

 

US dollar exchange variation + 6.44 to 6.47

 

134,272

 

159,917

Butadiene plant

 

2011

 

January-2021

 

US dollar exchange variation + 6.47

 

35,371

 

40,480

               

377,567

 

453,065

                     

Local currency

                   

Other

 

2006

 

September-2016

 

TJLP + 2.80

 

40,323

 

49,294

Braskem Qpar expansion

 

2006/2007/2008

 

February-2016

 

TJLP + 2.15 to 3.30

 

58,225

 

75,867

Green PE plant

 

2008/2009

 

June-2017

 

TJLP + 0.00 to 4.78

 

239,542

 

280,631

Limit of credit II

 

2009

 

January-2017

 

TJLP + 2.58 to 3.58

 

201,804

 

240,915

Limit of credit II

 

2009

 

January-2017

 

4.50

 

9,017

 

10,763

New plant PVC Alagoas

 

2010

 

December-2019

 

TJLP + 0.00 to 3.58

 

322,867

 

352,364

New plant PVC Alagoas

 

2010

 

December-2019

 

5.50

 

36,745

 

40,091

Limit of credit III

 

2011

 

October-2019

 

TJLP + 0.00 to 3.58

 

1,028,742

 

969,715

Limit of credit III

 

2011

 

October-2019

 

SELIC + 2.58

 

109,099

 

82,362

Limit of credit III

 

2011

 

November-2019

 

3.50 to 5.50

 

254,242

 

228,583

Butadiene plant

 

2011

 

December-2020

 

TJLP + 0.00 to 3.45

 

124,776

 

134,402

               

2,425,382

 

2,464,987

                     

Total

             

2,802,949

 

2,918,052

                     

 

 

 

24

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, except where stated otherwise 

 

(d)                    Export credit notes (“NCE”)

 

 

     

Initial amount

               

Issue date

 

 

of the transaction

 

Maturity

 

Charges (% per year)

 

Jun/2014

 

Dec/2013

                       

Foreign currency

                   

November 2006

 

167,014

 

May 2018

 

Us dollar exchange variation + 8.10

 

173,689

 

184,778

April 2007

 

101,605

 

March 2018

 

Us dollar exchange variation + 7.87

 

112,099

 

119,255

May 2007

 

146,010

 

May 2019

 

Us dollar exchange variation + 7.85

 

166,196

 

176,806

January 2008

 

266,430

 

February 2020

 

Us dollar exchange variation + 7.30

 

340,223

 

362,221

   

681,059

         

792,207

 

843,060

                     

Local currency

                   

April-2010

 

50,000

 

October-2021

 

105% of CDI

 

50,971

 

50,880

June-2010

 

200,000

 

October-2021

 

105% of CDI

 

203,883

 

203,521

February-2011

 

250,000

 

October-2021

 

105% of CDI

 

203,883

 

203,521

April-2011

(i)

 

450,000

 

April-2019

 

112.5% of CDI

 

459,999

 

459,408

June-2011

 

80,000

 

October-2021

 

105% of CDI

 

81,553

 

81,408

August-2011

(i)

 

400,000

 

August-2019

 

112.5% of CDI

 

403,865

 

403,513

June-2012

 

100,000

 

October-2021

 

105% of CDI

 

101,942

 

101,761

September-2012

 

300,000

 

October-2021

 

105% of CDI

 

305,825

 

305,282

October-2012

 

85,000

 

October-2021

 

105% of CDI

 

86,651

 

86,496

February-2013

(ii)

 

100,000

 

February-2016

 

8.00

 

101,183

 

101,183

February-2013

(iii)

 

50,000

 

February-2016

 

7.50

 

 

 

50,505

February-2013

(ii)

 

100,000

 

February-2016

 

8.00

 

101,032

 

101,010

February-2013

(ii)

 

50,000

 

February-2016

 

8.00

 

50,440

 

50,440

February-2013

(ii)

 

100,000

 

February-2016

 

8.00

 

100,988

 

100,923

March-2013

(ii)

 

50,000

 

March-2016

 

8.00

 

50,246

 

50,257

March-2013

(iii)

 

17,500

 

March-2016

 

8.00

 

 

 

17,583

August-2013

(iii)

 

10,000

 

August-2016

 

8.00

 

 

 

10,129

December-2013

(ii)

 

150,000

 

December-2016

 

8.00

 

150,225

 

150,257

June-2014

(ii)

 

50,000

 

June-2017

 

7.50

 

50,000

 

 

June-2014

(ii)

 

17,500

 

June-2017

 

8.00

 

17,500

 

 

June-2014

(ii)

 

10,000

 

June-2017

 

8.00

 

10,000

   

Total

   

2,620,000

         

2,530,186

 

2,528,077

                       

 

(i)         The Company enters into swap transactions to offset the variation in the Interbank Certificate of Deposit (CDI) rate (Note 14.1.1 (b)).

(ii)       The Company enters into swap transactions for these contracts (from 67.10% to 92.70% of CDI) (Note 14.1.1 (a)).

(iii)      Financing settled early in June 2014.

 

 

25

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, except where stated otherwise 

 

(e)                    Payment schedule

 

The maturity profile of the long-term amounts is as follows:

 

       

Jun/2014

 

Dec/2013

2015

     

564,619

 

1,121,998

2016

     

1,740,234

 

1,738,496

2017

     

969,143

 

1,576,790

2018

     

1,319,268

 

1,881,848

2019

     

2,083,676

 

1,479,686

2020

     

1,446,179

 

2,366,125

2021

     

2,398,652

 

2,561,516

2022

     

1,155,045

 

1,248,355

2023

     

2,464

 

1,676

2024

     

1,648,912

 

-

2025 and thereafter

     

3,154,595

 

3,377,197

Total

     

16,482,787

 

17,353,687

             

 

(f)                     Capitalized financial charges

 

In the period ended June 30, 2014, a total of R$ 40,890 corresponding to financial charges were capitalized (R$48,618 in the period ended June 30, 2013), including monetary variation and part of the exchange variation. The average rate of these charges in the period was 7.53% p.a. (6.90% p.a. in the period ended June 30, 2013).

 

(g)                    Guarantees 

 

Braskem gave collateral for part of its borrowings as follows:

 

 

       

Total debt

 

Total

   

Loans

 

Maturity

 

Jun/2014

 

guaranteed

 

Guarantees

                 

BNB

 

March-2023

 

314,627

 

314,627

 

Mortgage of plants, pledge of machinery and equipment

BNDES

 

January-2021

 

2,802,949

 

2,802,949

 

Mortgage of plants, land and property, pledge of machinery and equipment

FUNDES

 

June-2020

 

191,685

 

191,685

 

Mortgage of plants, land and property, pledge of machinery and equipment

FINEP

 

August-2023

 

115,137

 

115,137

 

Bank surety

FINAME

 

February-2022

 

3,075

 

3,075

 

Pledge of equipment

Total

     

3,427,473

 

3,427,473

   
                 

 

 

 

26

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, except where stated otherwise 

 

13.                   Project finance

 

The information on project finance was presented in the 2013 annual financial statements in Note 20.

 

 

   

Contract value

 

Value received

           

Identification

 

US$ thousands

 

US$ thousands

 

Maturity

 

Charges (% per year)

 

Jun/2014

 

Dec/2013

Project finance I

 

700,000

 

571,098

 

February-2027

 

Us dollar exchange variation + quarterly Libor + 3.25

 

1,263,898

 

1,141,515

Project finance II

 

210,000

 

79,050

 

February-2027

 

Us dollar exchange variation + 6.17

 

221,162

 

121,387

Project finance III

 

600,000

 

404,046

 

February-2029

 

Us dollar exchange variation + 4.33

 

895,552

 

621,410

Project finance IV

 

660,000

 

630,743

 

February-2029

 

Us dollar exchange variation + quarterly Libor + 3.88

 

1,351,513

 

1,298,791

Project finance V

 

400,000

 

326,342

 

February-2029

 

Us dollar exchange variation + quarterly Libor + 4.65

 

723,399

 

653,288

Project finance VI

 

90,000

 

49,593

 

February-2029

 

Us dollar exchange variation + quarterly Libor + 2.73

 

109,780

 

79,630

Project finance VII

 

533,095

 

434,928

 

February-2029

 

Us dollar exchange variation + quarterly Libor + 4.64

 

990,096

 

866,581

Transactions costs

 

-

 

-

         

(81,423)

 

(51,196)

Total

 

3,193,095

 

2,495,800

         

5,473,977

 

4,731,406

                         

Current liabilities

                 

26,966

 

25,745

Non-current liabilities

               

5,447,011

 

4,705,661

Total

                 

5,473,977

 

4,731,406

                         

 

On April 8, 2014, Braskem Idesa received the third tranche of the Project Finance in the amount of R$1,021,760 (US$ 464,986 thousand).

 

Braskem Idesa capitalized the charges incurred on this financing in the period ending June 30, 2014, in the amount of R$178,305 (R$18,076 in the period ended June 30, 2013), including a portion of exchange variation. The average interest rate over these charges in the period was 7.00% p.a.

 

The maturity profile of this long-term financing, by year of maturity, is as follows:

 

 

   

Jun/2014

 

Dec/2013

         

2016

 

102,945

 

85,068

2017

 

299,844

 

254,883

2018

 

367,631

 

313,944

2019

 

382,707

 

327,391

2020

 

453,166

 

389,584

2021

 

518,924

 

447,535

2022

 

434,279

 

377,156

2023

 

571,794

 

493,770

2024

 

618,608

 

534,866

2025 and thereafter

 

1,697,113

 

1,481,464

Total

 

5,447,011

 

4,705,661

         

 

In accordance with the Company’s risk management strategy and based on its financial policy, the Management contracted and designated derivative operations under hedge accounting (Note 14.1.1 (d.i)) in order to offset the change in future debt-related financial expenses caused by the fluctuation of the Libor rate.

 

27

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, except where stated otherwise 

 

14.                   Financial instruments

 

The information related to financial instruments was presented in the 2013 financial statements of the Company, in Note 21.

 

14.1.             Non-derivative financial instruments – measured at fair value

 

           

Fair value

 

Book value

 

Fair value

   

Note

 

Classification by category

 

hierarchy

 

Jun/2014

 

Dec/2013

 

Jun/2014

 

Dec/2013

                   

 

     

 

Cash and cash equivalents

 

3

                       

Cash and banks

             

330,420

 

987,824

 

330,420

 

987,824

Financial investments in Brazil

     

Held-for-trading

 

Level 2

 

357,127

 

687,938

 

357,127

 

687,938

Financial investments in Brazil

     

Loans and receivables

     

1,464,141

 

1,218,852

 

1,464,141

 

1,218,852

Financial investments abroad

     

Held-for-trading

 

Level 2

 

999,206

 

1,441,245

 

999,206

 

1,441,245

               

3,150,894

 

4,335,859

 

3,150,894

 

4,335,859

                   

 

     

 

Financial investments

 

4

             

 

     

 

FIM Sol investments

     

Held-for-trading

 

Level 2

 

74,316

 

61,670

 

74,316

 

61,670

Investments in foreign currency

     

Held-for-trading

 

Level 2

 

2,534

 

3,773

 

2,534

 

3,773

Investments in foreign currency

     

Held-to-maturity

     

 

 

189

 

 

 

189

Shares

     

Held-for-trading

     

1,170

 

1,170

 

1,170

 

1,170

FIM Sol investments

     

Loans and receivables

     

61,148

 

 

 

61,148

 

 

Quotas of receivables investment fund
in credit rights

     

Held-to-maturity

     

37,165

 

40,696

 

37,165

 

40,696

Restricted deposits

     

Held-to-maturity

     

1,596

 

 

 

1,596

 

 

               

177,929

 

107,498

 

177,929

 

107,498

                   

 

     

 

Trade accounts receivable

 

5

         

2,826,659

 

2,872,395

 

2,826,659

 

2,872,395

                   

 

     

 

Related parties credits

 

7

 

Loans and receivables

     

302,070

 

258,136

 

302,070

 

258,136

                             

Trade payables

             

9,766,021

 

10,421,687

 

9,766,021

 

10,421,687

                   

 

     

 

Borrowings

 

12

             

 

     

 

Foreign currency - Bond

         

Level 1

 

9,793,844

 

10,432,526

 

9,955,102

 

10,241,359

Foreign currency - other borrowings

             

2,693,758

 

2,588,901

 

2,693,758

 

2,588,901

Local currency

             

5,608,448

 

5,667,529

 

5,608,448

 

5,667,529

               

18,096,050

 

18,688,956

 

18,257,308

 

18,497,789

                   

 

     

 

Project finance

 

13

         

5,555,400

 

4,782,602

 

5,555,400

 

4,782,602

                   

 

     

 

Other payables

                 

 

     

 

Creditors for the acquisitions of shares

             

286,072

 

275,743

 

286,072

 

275,743

Accounts payable to non-controlling (Braskem Idesa)

           

475,470

 

341,993

 

475,470

 

341,993

               

761,542

 

617,736

 

761,542

 

617,736

 

 

(a)   Fair value hierarchy

 

Level 1 – fair value obtained through prices quoted (without adjustments) in active markets for identical assets or liabilities, such as the stock exchange; and

 

Level 2 – fair value obtained from discounted cash flow models, when the instrument is a forward purchase or sale or a swap contract, or valuation models of option contracts, such as the Black-Scholes model, when the derivative has the characteristics of an option.

 

 

28

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, except where stated otherwise 

 

14.1.1    Derivative financial instruments designated and not designated for hedge accounting

 

 

           

Operation characteristics

               
       

Fair value

 

Principal exposure

     

Balance at

 

Change in

 

Financial

 

Balance at

Identification

 

Note

 

hierarchy

   

Derivatives

 

Dec/2013

 

fair value

 

settlement

 

Jun/2014

                                 

Non-hedge accounting transactions

                               

Commodity swap - Naphtha

 

 

 

Level 2

 

Fixed price

 

Variable price

 

(470)

 

5

 

465

 

 

Interest rate swaps

 

14.1.1 (a)

 

Level 2

 

Fixed rate

 

CDI

 

20,751

 

(6,538)

 

(665)

 

13,548

Contract for the future purchase

 

 

 

Level 2

 

Euro

 

Dollar

 

(5,022)

 

1,892

 

3,272

 

142

                   

15,259

 

(4,641)

 

3,072

 

13,690

                                 

Hedge accounting transactions

                               

Exchange swap

 

14.1.1 (b)

 

Level 2

 

CDI

 

Dollar

 

367,559

 

(17,571)

 

(14,734)

 

335,254

Commodity swap - ethylene

 

 

 

Level 2

 

Variable price

 

Fixed price

 

(69)

 

(72)

 

58

 

(83)

Commodity swap - PGP

 

 

 

Level 2

 

Fixed price

 

Variable price

 

(59)

 

(132)

 

73

 

(118)

Interest rate swaps

 

14.1.1 (d.i)

 

Level 2

 

Libor

 

Dollar

 

(110,253)

 

71,950

 

6,989

 

(31,314)

Contract for the future purchase - Currency

 

14.1.1 (d.ii)

 

Level 2

 

Mexican peso

 

Dollar

 

47,280

 

(26,657)

 

(13,406)

 

7,217

                   

304,458

 

27,518

 

(21,020)

 

310,956

                                 

Derivative operations

                               

Current assets

                 

(34,101)

 

 

 

 

 

(32,341)

Non current assets

                 

(137,345)

 

 

 

 

 

(63,851)

Current liabilities

                 

95,123

 

 

 

 

 

53,400

Non current liabilities

                 

396,040

 

 

 

 

 

367,438

                   

319,717

 

22,877

 

(17,948)

 

324,646

                                 

 

The regular changes in the fair value of derivatives not designated as hedge accounting were recorded as financial income or expenses in the same period in which they occur.

 

(a)                    Interest rate swap linked to NCE

 

 

Identification

 

 

 

Interest rate

 

Maturity

 

Fair value

 

Nominal value

 

(hedge)

 

 

Jun/2014

 

Dec/2013

Swap NCE I

 

100,000

 

90.65% CDI

 

February-2016

 

3,012

 

4,086

Swap NCE II

 

50,000

 

88.20% CDI

 

February-2016

 

1,648

 

2,243

Swap NCE III

 

100,000

 

92.64% CDI

 

February-2016

 

3,267

 

4,435

Swap NCE IV

 

50,000

 

92.70% CDI

 

February-2016

 

1,671

 

2,315

Swap NCE V

 

100,000

 

91.92% CDI

 

February-2016

 

(414)

 

4,407

Swap NCE VI

 

50,000

 

92.25% CDI

 

March-2016

 

3,176

 

2,310

Swap NCE VII

 

17,500

 

91.10% CDI

 

March-2016

 

1,624

 

765

Swap NCE VIII

 

10,000

 

77.52% CDI

 

August-2016

 

534

 

190

Swap NCE IX

 

50,000

 

68.15% CDI

 

December - 2016

 

110

 

-

Swap NCE X

 

50,000

 

67.15% CDI

 

December - 2016

 

(536)

 

-

Swap NCE XI

 

50,000

 

67.10% CDI

 

December - 2016

 

(544)

 

-

Total

 

627,500

         

13,548

 

20,751

                     

Derivatives operations

                   

Current liabilities

 

 

 

 

 

 

 

13,548

 

20,751

Total

 

 

 

 

 

13,548

 

20,751

 

 

 

29

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, except where stated otherwise 

 

(b)                    Swaps related to export credit notes (NCE)

 

Identification

     

US$ thousands

Interest rate

 

Maturity

 

Fair value

 

Nominal value

 

(hedge)

(hedge)

   

Jun/2014

 

Dec/2013

Swap NCE I

 

200,000

 

122,100

5.44%

 

August 2019

 

99,229

 

101,904

Swap NCE II

 

100,000

 

60,187

5.40%

 

August 2019

 

47,406

 

48,414

Swap NCE III

 

100,000

 

59,588

5.37%

 

August 2019

 

45,874

 

46,642

Swap NCE IV

 

100,000

 

56,205

5.50%

 

April 2019

 

32,676

 

39,005

Swap NCE V

 

100,000

 

56,180

5.50%

 

April 2019

 

32,613

 

38,939

Swap NCE VI

 

150,000

 

83,372

5.43%

 

April 2019

 

43,579

 

52,745

Swap NCE VII

 

100,000

 

58,089

4.93%

 

April 2019

 

33,877

 

39,910

Total

 

850,000

 

494,721

       

335,254

 

367,559

                   

 

Derivatives operations

                   

Current assets

             

(32,141)

 

(28,481)

Non Current liabilities

             

367,395

 

396,040

Total

         

335,254

 

367,559

                     

 

 

(c)                    Non-derivative liabilities designated for export hedge accounting

 

On May 1, 2013, Braskem S.A. designated non-derivative financial instrument liabilities, denominated in U.S. dollars, as hedge for the flow of its highly probable future exports.

 

Certain liabilities that were selected as hedge instruments are protecting dollar-denominated export flows scheduled to occur after the original maturities of these liabilities. For these cases, the Company maintains a strategy to refinance, roll over or swap the liability. The column “Maturity” in the following table already presents the new maturities in accordance with the hedged flows, considering the refinancing, rollover or swap strategy. If these events do not occur, the exchange variation equivalent to the period for which the hedge ratio was effective will be recorded under shareholders' equity through the export period.

 

 

30

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, except where stated otherwise 

 

On June 30, 2014, the following non-derivative liabilities were designated as hedge for the flow of its exports:

 

 

 

 

Financial liabilities

 

 

       

Nominal value

       

Identification

 

Maturity

 

Hedge

 

US$ thousands

 

Jun/2014

 

Dec/2013

 

 

 

 

 

 

 

 

 

 

 

Operations designated for hedge accounting

 

 

 

 

 

 

 

 

 

 

Trade payables

0

2016

0

Dollar

0

839,447

 

1,848,881

 

1,966,488

Trade payables

0

2017

0

Dollar

0

749,685

 

1,651,181

 

1,756,212

Export prepayments

0

2017

0

Dollar

0

80,000

 

176,200

 

187,408

Trade payables

0

2018

0

Dollar

0

787,894

 

1,735,336

 

1,744,207

Export prepayments

0

2018

0

Dollar

0

 

 

 

 

101,513

Bond

0

2019

0

Dollar

0

65,143

 

143,477

 

152,604

Accounts payable

0

2019

0

Dollar

0

50,000

 

110,125

 

117,130

Export prepayments

0

2019

0

Dollar

0

618,836

 

1,362,988

 

1,449,688

Accounts payable

0

2020

0

Dollar

0

282,000

 

621,105

 

674,669

Trade payables

0

2020

0

Dollar

0

62,000

 

136,555

 

131,186

Export prepayments

0

2020

0

Dollar

0

380,000

 

836,950

 

890,188

Accounts payable

0

2021

0

Dollar

0

328,000

 

722,420

 

777,743

Trade payables

0

2021

0

Dollar

0

64,000

 

140,960

 

23,426

Export prepayments

0

2021

0

Dollar

0

324,000

 

713,610

 

876,132

Accounts payable

0

2022

0

Dollar

0

216,000

 

475,740

 

506,002

Export credit notes

0

2022

0

Dollar

0

353,000

 

777,483

 

826,938

Export prepayments

0

2022

0

Dollar

0

150,000

 

330,375

 

351,388

Accounts payable

0

2023

0

Dollar

0

653,972

 

1,440,372

 

1,531,994

Export prepayments

0

2023

0

Dollar

0

64,400

 

141,841

 

150,863

Accounts payable

0

2024

0

Dollar

0

113,854

 

250,764

 

266,715

Export prepayments

 

2024

0

Dollar

0

575,000

 

1,266,438

 

1,346,995

0

0

 

#

 

0

6,757,231

 

14,882,801

 

15,829,489

 

(d)                    Hedge operations by Braskem Idesa related to project finance

 

The hedge operations of Braskem Idesa share the same guarantees with the Project Finance (Note 13).

 

(d.i)     Interest rate swap linked to Libor – operation not designated for hedge accounting

 

 

Identification

 

Nominal value

 

Interest rate

 

Maturity

 

 

 

Fair value

 

 

US$ thousands

 

(hedge)

 

 

 

Jun/2014

 

Dec/2013

Swap Libor I

 

299,996

 

1.9825%

 

May-2025

 

(7,181)

 

(25,124)

Swap Libor II

 

299,996

 

1.9825%

 

May-2025

 

(7,143)

 

(25,213)

Swap Libor III

 

299,996

 

1.9825%

 

May-2025

 

(7,143)

 

(25,213)

Swap Libor IV

 

129,976

 

1.9825%

 

May-2025

 

(3,111)

 

(10,924)

Swap Libor V

 

132,996

 

1.9825%

 

May-2025

 

(3,167)

 

(11,178)

Swap Libor VI

 

149,932

 

1.9825%

 

May-2025

 

(3,569)

 

(12,601)

Total

 

1,312,892

 

 

 

 

 

(31,314)

 

(110,253)

 

 

 

 

 

 

 

 

 

 

 

Derivatives operations

 

 

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

(63,850)

 

-

Non-Current assets

 

 

 

 

 

 

 

-

 

(137,345)

Current liabilities

 

 

 

 

 

 

 

32,536

 

27,092

Total

 

 

 

 

 

 

 

(31,314)

 

(110,253)

 

In the period ended June 30, 2014, the Company recognized a financial expense of R$1,892.

 

 

 

31

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, except where stated otherwise 

 

(d.ii)    Currency futures contract– Mexican Peso – operation designated for hedge accounting

 

  

Identification

 

Nominal value

 

Foreign exchange

 

Maturity

 

 

 

Fair value

 

US$ thousands

 

(hedge)

   

Jun/2014

 

Dec/2013

Deliverable Forward

 

41,020

 

12.6185

 

January-2014

 

 

 

3,620

Deliverable Forward

 

35,453

 

12.5394

 

February-2014

 

 

 

3,815

Deliverable Forward

 

39,206

 

12.5926

 

March-2014

 

 

 

4,065

Deliverable Forward

 

54,084

 

12.8643

 

April-2014

 

 

 

3,468

Deliverable Forward

 

52,182

 

12.9268

 

June-2014

 

 

 

3,164

Deliverable Forward

 

51,191

 

12.8909

 

June-2014

 

769

 

3,624

Deliverable Forward

 

46,889

 

12.8789

 

July-2014

 

1,002

 

3,612

Deliverable Forward

 

45,959

 

12.9465

 

September-2014

 

671

 

3,281

Deliverable Forward

 

36,561

 

12.9044

 

September-2014

 

936

 

2,988

Deliverable Forward

 

37,215

 

12.9570

 

Octuber-2014

 

787

 

2,923

Deliverable Forward

 

31,908

 

12.9465

 

December-2014

 

862

 

2,707

Deliverable Forward

 

28,169

 

12.9881

 

December-2014

 

678

 

2,344

Deliverable Forward

 

23,381

 

12.9518

 

February-2015

 

807

 

2,202

Deliverable Forward

 

29,047

 

13.1969

 

March-2015

 

(47)

 

1,788

Deliverable Forward

 

18,625

 

13.0980

 

March-2015

 

351

 

1,519

Deliverable Forward

 

10,230

 

13.0490

 

April-2015

 

319

 

961

Deliverable Forward

 

5,897

 

13.1167

 

June-2015

 

148

 

525

Deliverable Forward

 

7,014

 

13.4329

 

June-2015

 

(155)

 

317

Deliverable Forward

 

2,245

 

13.2538

 

July-2015

 

27

 

176

Deliverable Forward

 

1,840

 

13.1486

 

August-2015

 

62

 

181

Total

 

598,116

         

7,217

 

47,280

                     

Derivatives operations

                   

Current liabilities

             

7,174

 

47,280

Non-Current liabilities

             

43

 

-

Total

             

7,217

 

47,280

 

 

Before designating these swap operations as hedge accounting, on March 1, 2014, the Company recognized financial income of R$112. After recognizing such designation, in shareholders’ equity, the Company recognized a credit of R$26,545 relating to changes in the fair value of these swaps since the designation through June 30, 2014.

 

(e)                    Estimated maximum loss

 

The amount at risk of the derivatives held by Braskem on June 30, 2014, which is defined as the highest loss that could result in one month and in 95% of the cases under normal market conditions, was estimated by the Company at R$26,403 (US$11,988 thousand) for the NCE swap designated for hedge accounting and R$1,009 for the NCE swap that is not designated for hedge accounting.

 

The value at risk of derivatives related to the Ethylene XXI Project in Mexico in 95% of the cases, under normal market conditions, was estimated at R$5,442 (US$2,471 thousand) for the Libor derivative and R$369 (US$168 thousand) for the derivative of Mexican pesos.

 

 

32

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, except where stated otherwise 

 

14.2.             Credit quality of financial assets

 

(a)                    Trade accounts receivable

 

On June 30, 2014, the credit ratings for the domestic market were as follows:

 

 

 

 

 

 

(%)

 

 

 

Jun/2014

 

Dec/2013

1

Minimum risk

 

5.74

 

16.56

2

Low risk

 

38.18

 

32.61

3

Moderate risk

 

30.13

 

23.54

4

High risk

 

25.05

 

26.26

5

Very high risk

(i)

0.91

 

1.03

 

(i) Most clients in this group are inactive and the respective accounts are in the process of collection actions in the courts. Clients in this group that are still active buy from Braskem and pay in advance.

 

Default indicators for the periods ended

 

 

Last 12 months

 

Domestic

 

Export

 

Market

 

Market

June 30, 2014

0.50%

 

0.09%

June 30, 2013

0.30%

 

0.45%

December 31, 2013

0.14%

 

0.13%

December 31, 2012

0.28%

 

0.37%

 

 

33

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, except where stated otherwise 

 

(b)                    Other financial assets

 

In order to determine the credit ratings of counterparties in financial assets classified as cash and cash equivalents, held-for-trading, held-to-maturity and loans and receivables, Braskem uses the following credit rating agencies: Standard & Poor’s, Moody’s and Fitch Ratings.

 

 

     

Jun/2014

 

Dec/2013

Financial assets with risk assessment

         

AAA

   

2,946,172

 

3,436,378

AA

   

68,935

 

93,955

A

   

272,935

 

865,105

A-

   

 

 

1,485

     

3,288,042

 

4,396,923

Financial assets without risk assessment

       

Quotas of investment funds in credit rights (i)

   

37,165

 

40,696

Sundry funds (ii)

   

2,534

 

3,773

Other financial assets with no risk assessment

   

1,082

 

1,965

     

40,781

 

46,434

           

Total

   

3,328,823

 

4,443,357

           

 

(i)         Financial assets with no internal or external ratings and approved by the Management of the Company.

(ii)       Investment funds with no internal and external risk assessment whose portfolio is composed of assets from major financial institutions and that comply with Braskem’s financial policy.

 

Braskem’s financial policy determines “A-” as the minimum rating for financial investments.

 

14.3.             Sensitivity analysis

 

Financial instruments, including derivatives, may be subject to changes in their fair value as a result of the variation in commodity prices, foreign exchange rates, interest rates, shares and share indexes, price indexes and other variables. The sensitivity of the derivative and non-derivative financial instruments to these variables are presented below:

 

(a)               Selection of risks

 

On June 30, 2014, the main risks that can affect the value of Braskem’s financial instruments are:

 

·      Brazilian real/U.S. dollar exchange rate;

·      U.S. dollar/Mexican peso exchange rate;

·      U.S. dollar/Euro exchange rate;

·      Libor floating interest rate;

·      CDI interest rate; and

·      TJLP interest rate.

 

For the purposes of the risk sensitivity analysis, Braskem presents the exposures to currencies as if they were independent, that is, without reflecting in the exposure to a foreign exchange rate the risks of the variation in other foreign exchange rates that could be directly influenced by it.

 

 

34

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, except where stated otherwise 

 

(b)               Selection of scenarios

 

(b.1)    Probable scenario

 

The Market Readout published by the Central Bank of Brazil on June 27, 2014 was used to create the probable scenario for the U.S. dollar/Brazilian real exchange rate and the CDI interest rate, using the reference date of June 30, 2014. The Market Readout presents a consensus of market expectations based on a survey of the forecasts made by various financial and non-financial institutions.

 

The Market Readout does not publish forecasts for the interest rates Libor and TJLP. Therefore, Braskem considered the expectations for the CDI interest rate for determining the probable scenario for those rates, given their correspondence. The probable scenario for the TJLP is an increase of 0.5% from the current rate of 5%, in line with the size of the government’s most recent decisions to increase or decrease the rate, and accompanying the forecast for the cumulative increase in the CDI rate by end-2014 of 0.50%.

 

 

35

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, except where stated otherwise 

 

(b.2)    Possible and extreme adverse scenarios

 

The sensitivity values in the table below are the changes in the value of the financial instruments in each scenario and show the changes in future cash flows. 

 

 

       

Possible adverse

 

Extreme adverse

Instrumento / Sensibilidade

 

Probable

(25%)

(50%)

             

Brazilian real/U.S. dollar exchange rate

           

Bonds and MTN

 

(1,072,227)

 

(2,385,435)

 

(4,770,871)

Advance on exchange contracts

 

(18,563)

 

(41,297)

 

(82,594)

BNDES

 

(42,428)

 

(94,392)

 

(188,783)

Export credit notes

 

(199,346)

 

(443,495)

 

(886,990)

Export prepayments

 

(40,565)

 

(90,247)

 

(180,495)

Financial investments abroad

 

160,643

 

357,389

 

714,778

Swaps

 

139,903

 

311,249

 

622,497

             

U.S. dollar/Mexican peso exchange rate

           

Project finance

 

(62,303)

 

(621,337)

 

(1,242,674)

Deliverable Forward

 

(17,177)

 

(140,726)

 

(234,855)

             

U.S. dollar/Euro exchange rate

           

Deliverable Forward

 

479

 

(26,179)

 

(52,358)

             

Libor floating interest rate

           

Borrowings

 

(699)

 

(3,494)

 

(6,987)

Export prepayments

 

(1,705)

 

(8,525)

 

(17,051)

Swaps

 

411

 

(2,055)

 

(4,110)

             

CDI interest rate

           

Export credit notes

 

(85,556)

 

(220,460)

 

(399,930)

Financial investments in local currency

 

(19,475)

 

(53,543)

 

(107,048)

   

 

 

 

 

 

   

Probable

 

Possible adverse

 

Extreme adverse

Instrumento / Sensibilidade

 

5.5%

 

6.0%

 

6.5%

             

TJLP interest rate

           

BNDES

 

(37,659)

 

(74,441)

 

(110,371)

FINEP

 

(60)

 

(118)

 

(177)

Other governmental agents

 

(54)

 

(107)

 

(158)

 

36

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, except where stated otherwise 

 

 

15.                   Taxes payable

 

The information related to taxes payable was presented in the Company’s 2013 annual financial statements, in Note 22.

 

 

                 

Jun/2014

 

Dec/2013

                     

 

Brazil

                   
 

IPI

             

85,171

 

81,282

 

PIS and COFINS

             

2,976

 

615

 

IR and CSL

             

156,653

 

52,226

 

ICMS

             

83,823

 

120,941

 

Federal tax payment program - Law 11,941/09

           

946,784

 

1,024,127

 

Other

             

63,414

 

67,680

                       

Other countries

                   
 

Other

             

5,461

 

1,428

Total

             

1,344,282

 

1,348,299

                       

Current liabilities

             

524,644

 

445,424

Non-current liabilities

             

819,638

 

902,875

Total

             

1,344,282

 

1,348,299

                       

 

 

16.                   Income tax (“IR”) and social contribution (“CSL”)

 

The information related to income tax and social contribution was presented in the Company’s 2013 annual financial statements, in Note 23.

 

(a)               Reconciliation of the effects of income tax and social contribution on profit or loss

 

 

           

Note

 

Jun/2014

 

Dec/2013

           

2.1.1(b)

     

Revised

Income before IR and CSL

             

726,052

 

217,644

                     

IR and CSL at the rate of 34%

             

(246,858)

 

(73,999)

                     

Permanent adjustments to the IR and CSL calculation basis

                   

IR and CSL on equity in results of investees

             

(32,619)

 

(1,086)

Other permanent adjustments

             

74,171

 

(34,746)

                     

Effect of IR and CSL on results of operations

             

(205,306)

 

(109,831)

                     

Breakdown of IR and CSL:

                   
                     

Current IR and CSL

             

(125,819)

 

(83,323)

Deferred IR and CSL

             

(79,487)

 

(26,508)

Total IR and CSL on income statement

             

(205,306)

 

(109,831)

                     

 

 

 

37

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, except where stated otherwise 

 

(b)               Breakdown of deferred income tax and social contribution

 

  

             

Deferred tax - assets

             

Jun/2014

 

Dec/2013

                     

Tax losses (IR) and negative base (CSL)

             

1,126,150

 

1,015,587

Goodwill amortized

             

10,766

 

12,065

Exchange variations

             

388,039

 

791,508

Temporary adjustments

             

388,629

 

408,233

Business combination

             

234,840

 

232,039

Pension plan

             

87,979

 

61,927

Deferred charges - write-off

             

43,154

 

37,971

Investiments in subsidiaries

                 

94,276

               

2,279,557

 

2,653,606

                     

Deferred tax - liabilities

                   
                     

Amortization of goodwill based on future profitability

             

675,846

 

643,050

Tax depreciation

             

622,522

 

541,325

Temporary differences

             

341,489

 

426,186

Business combination

             

565,520

 

585,250

Additional indexation PP&E

             

133,141

 

140,157

Other

             

77,761

 

57,730

               

2,416,279

 

2,393,698

                     

Deffered tax net

             

(136,722)

 

259,908

                     

Asset in Balance Sheet

             

705,573

 

1,123,313

(-) Liability in Balance Sheet

             

842,295

 

863,405

                     

Deffered tax net

             

(136,722)

 

259,908

 

   

(c)               Net balance of deferred income and social contribution tax assets and liabilities

 

 

           

 

 

Jun/2014

         

Headquarters (Country)

 

IR-CSL Asset

 

IR-CSL Liability

 

Net

                       

Assests

                     

Braskem S.A.

       

Brazil

 

1,475,309

 

(1,140,049)

 

335,260

Braskem Argentina

       

Argentina

 

5,131

 

 

 

5,131

Braskem Alemanha

       

Germany

 

69,719

 

 

 

69,719

Braskem Idesa Serviços

       

Mexico

 

2,863

 

 

 

2,863

Braskem Petroquímica

       

Brazil

 

206,428

 

(140,724)

 

65,704

Braskem Qpar

       

Brazil

 

370,350

 

(291,825)

 

78,525

IQAG

       

Brazil

 

21

 

 

 

21

Quantiq

       

Brazil

 

4,556

 

(1,276)

 

3,280

Braskem Qpar - Bussines combination effect

       

Brazil

 

145,070

 

 

 

145,070

             

2,279,447

 

(1,573,874)

 

705,573

                         

Liabilitys

                     

Braskem Idesa

       

México

 

 

 

(24,746)

 

(24,746)

Braskem Qpar - Bussines combination effect

       

Brasil

 

 

 

(483,062)

 

(483,062)

Petroquímica Chile

       

Chile

 

110

 

(231)

 

(121)

Braskem America

       

EUA

 

 

 

(334,366)

 

(334,366)

               

110

 

(842,405)

 

(842,295)

 

38

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, except where stated otherwise 

 

   

           

 

 

Dec/2013

           

Headquarters (Country)

 

IR-CSL Asset

 

IR-CSL Liability

 

Net

Assests

                     

Braskem S.A.

       

Brazil

 

1,769,683

 

(1,095,410)

 

674,273

Braskem Argentina

       

Argentina

 

5,552

 

 

 

5,552

Braskem Alemanha

       

Germany

 

67,910

 

 

 

67,910

Braskem Idesa

       

Mexico

 

57,613

 

(52,554)

 

5,059

Braskem Petroquímica

       

Brazil

 

215,348

 

(129,022)

 

86,326

Braskem Qpar

       

Brazil

 

390,017

 

(253,307)

 

136,710

Petroquímica Chile

       

Chile

 

123

 

 

 

123

IQAG

       

Brazil

 

23

 

 

 

23

Quantiq

       

Brazil

 

5,069

 

 

 

5,069

Braskem Qpar - Bussines combination effect

       

Brazil

 

142,268

 

 

 

142,268

               

2,653,606

 

(1,530,293)

 

1,123,313

                         

Liabilitys

                     

Braskem Qpar - Bussines combination effect

       

Brazil

 

 

 

(501,699)

 

(501,699)

Braskem America

       

USA

 

 

 

(361,706)

 

(361,706)

               

 

 

(863,405)

 

(863,405)

 

(d)               Realization of deferred income tax and social contribution

             

In the period ended June 30, 2014, there were no material events or circumstances that indicate any compromise of the realization of these deferred taxes.

 

(e)               Law 12,973 on May 13, 2014

 

Provisional Presidential Decree 627 of November 11, 2013 was made into Law 12,973 on May 13, 2014, which, among others, revoked the Transitional Tax System (RTT) and included additional measures, notably: (i) changes in the federal tax laws related to income and social contribution (IRPJ & CSLL), PIS/PASEP and COFINS taxes in order to align tax accounting with corporate accounting; (ii) provisions on the calculation of interest on equity;  and (ii) considerations on investments valued using the equity accounting method. The provisions in this law are applicable as from 2015, except in the event of early adoption as from 2014, which is currently being assessed by the Management of the Company.                       

 

 

  

39

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, except where stated otherwise 

 

 

17.                   Sundry provisions

 

The information on sundry provisions was presented in the 2013 annual financial statements of the Company, in Note 24.

 

             
               

Jun/2014

 

Dec/2013

Measures to

                   

Provision for customers bonus

           

41,810

 

45,060

Provision for recovery of environmental damages

           

113,616

 

132,762

Judicial and administrative provisions

           

379,683

 

362,896

Other

             

11,116

 

14,832

Total

             

546,225

 

555,550

                     

Current liabilities

             

92,616

 

105,856

Non-current liabilities

           

453,609

 

449,694

Total

             

546,225

 

555,550

 

 

 

40

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, except where stated otherwise 

 

The composition of provisions for judicial and administrative suits is as follows:

 

             
               

Jun/2014

 

Dec/2013

                     

Labor claims

             

126,776

 

125,887

                     

Tax claims

                   

IR and CSL

             

33,867

 

32,319

PIS and COFINS

           

37,423

 

35,634

ICMS - interstate purchases

           

90,562

 

86,233

ICMS - other

             

12,006

 

11,432

Other

             

69,031

 

61,372

                     

Societary claims and other

           

10,018

 

10,019

               

379,683

 

362,896

 

 

18.                   Post-employment benefits (defined-benefit plans)

 

The information on post-employment (defined-benefit plans) was presented in the 2013 annual financial statements of the Company, in Note 26.

 

The amounts recognized are as follows:

 

 

               

Jun/2014

 

Dec/2013

                     

Petros Plans

         

(a)

 

235,134

 

158,122

Novamont Braskem America

           

7,010

 

9,554

Braskem Alemanha

           

34,358

 

34,515

               

276,502

 

202,191

                     

Current liabilities

             

-

 

158,137

Non-current liabilities

           

276,502

 

44,054

Total

             

276,502

 

202,191

                     

 

 

(a)               Petros Plans

 

In August and October 2012, the Brazilian Private Pension Plan Superintendence (PREVIC - Superintendência Nacional de Previdência Complementar) approved the withdrawal of the sponsorship by Braskem of these plans, which required the payment of the mathematical reserves of the respective beneficiaries and in turn the monetization of the assets of the plans administered by Petros. In view of the unlikelihood of said monetization after almost two years since the approval by PREVIC, the Management of the Company had no alternative but to initiate the necessary procedures to resume sponsorship of the plans. This decision was formalized through a legal instrument, on April 3, 2014, to preserve Braskem’s rights. The Company expects the conditions for resumption of sponsorship of the plans to be established in the coming months, based on discussions currently being held with PREVIC and Petros. Only after signing the cancelation of the withdrawal of sponsorship and the consequent preparation of actuarial reports will the company be able to measure and account for these plans as defined benefit plans, including the estimation of future contributions to be made by the Company and participants. The provision maintained by the Company is still measured based on the criteria that adopted after the decision to withdraw sponsorship. In the first quarter, the provision was increased based on the estimated costs of past services (Note 23), and was reclassified to non-current liabilities.

 

 

41

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, except where stated otherwise 

 

19.                   Contingencies 

 

The description of the main contingent liabilities of the Company was presented in the 2013 annual financial statements, in Note 29.

 

In the period ended June 30, 2014, there were no material events or changes in the previsions reported on December 31, 2013.

 

20.                   Shareholders’ Equity

 

The information related to the Company’s shareholders’ equity was presented in its 2013 annual financial statements, in Note 30.

 

(a)                    Capital 

 

 

     

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares unit

             

Preferred

     

Preferred

           
     

Common

     

shares

     

shares

           
     

shares

 

%

 

class A

 

%

 

class B

 

%

 

Total

 

%

                                   

OSP e Odebrecht

   

226,334,623

 

50.11%

 

79,182,498

 

22.96%

 

-

     

305,517,121

 

38.32%

Petrobras

   

212,426,951

 

47.03%

 

75,259,779

 

21.81%

 

-

     

287,686,730

 

36.08%

BNDESPAR

   

 

 

0.00%

 

40,102,837

 

11.62%

 

-

     

40,102,837

 

5.03%

ADR

(i)

 

 

 

0.00%

 

34,191,744

 

9.91%

 

-

     

34,191,744

 

4.29%

Other

   

12,907,078

 

2.86%

 

115,111,262

 

33.37%

 

593,818

 

100.00%

 

128,612,158

 

16.13%

Total

   

451,668,652

 

100.00%

 

343,848,120

 

99.67%

 

593,818

 

100.00%

 

796,110,590

 

99.86%

Braskem shares owned
by Braskem Petroquímica

(ii)

 

 

     

1,154,758

 

0.33%

 

-

     

1,154,758

 

0.14%

Total

   

451,668,652

 

100.00%

 

345,002,878

 

100.00%

 

593,818

 

100.00%

 

797,265,348

 

100.00%

                                   

 

(i)       American Depositary Receipts traded on the New York Stock Exchange (USA);

(ii)     These share are considered “treasury shares” in the consolidated shareholders’ equity, amounting to R$48,892.

 

(b)                    Dividends 

 

The Annual Shareholders’ Meeting held on April 9, 2014 approved the declaration of dividends in the amount of R$ 482,593, the payment of which started to be paid on April 22, 2014, of which R$ 273,796 was paid to holders of common shares and R$ 208,437 and R$ 360 to holders of class A and class B preferred shares, respectively.

 

42

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, except where stated otherwise 

 

(c)                    Other comprehensive income - shareholders' equity

 

 

 

 

 

 

 

 

 

Defined

 

 

 

Foreign

 

 

 

 

 

 

 

Additional

 

Deemed

 

benefit

 

 

 

currency

 

Loss

 

 

 

 

 

indexation of

 

cost of

 

plan actuarial

 

Fair value

 

translation

 

on interest

 

 

 

 

 

PP&E

 

PP&E

 

Gain (loss)

 

of hedge

 

adjustment

 

in subsidiary

 

 

 

 

 

(i)

 

(i)

 

(ii)

 

(iii)

 

(iv)

 

(v)

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At December 31, 2012

 

299,305

 

20,207

 

(11,816)

 

 

37,158

 

(7,443)

 

337,411

 

 

 

Additional indexation

 

 

Realization by depreciation or write-off assets

 

(20,634)

(20,634)

 

IR and CSL

 

7,016

7,016

 

 

 

Deemed cost of jointly-controlled investment

 

 

Realization by depreciation or write-off assets

 

(733)

(733)

 

IR and CSL

 

249

249

 

 

 

Foreign sales hedge

 

 

Exchange rate

 

(1,517,598)

(1,517,598)

 

IR and CSL

 

515,983

515,983

 

 

 

Loss on interest in subsidiary

 

(1,994)

(1,994)

 

 

 

Foreign currency translation adjustment

 

99,728

99,728

 

 

 

At June 30, 2013

 

285,687

 

19,723

 

(11,816)

 

(1,001,615)

 

136,886

 

(9,437)

 

(580,572)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At December 31, 2013

 

272,069

19,240

(11,647)

(1,605,356)

242,407

(9,404)

(1,092,691)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional indexation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Realization by depreciation or write-off assets

 

(16,026)

(16,026)

 

IR and CSL

 

2,406

2,406

 

 

 

Deemed cost of jointly-controlled investment

 

 

Realization by depreciation or write-off assets

 

(732)

(732)

 

IR and CSL

 

250

250

 

 

 

Foreign sales hedge

 

 

Exchange rate

 

946,688

946,688

 

IR and CSL

 

(321,874)

(321,874)

 

 

 

Fair value of Cash flow hedge

 

 

Change in fair value

 

3,904

3,904

 

Transfer to result

 

(720)

(720)

 

IR and CSL

 

(10,739)

(10,739)

 

 

 

Foreign currency translation adjustment

 

(87,836)

(87,836)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At June 30, 2014

 

258,449

 

18,758

 

(11,647)

 

(988,097)

 

154,571

 

(9,404)

 

(577,370)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(i)

Realization as the asset is depreciated or written-off.

(ii)

Realization upon extinction of the plan.

(iii)

Realization upon maturity, prepayment or loss of efficacy for hedge accounting.

(iv)

Realization upon write-off of subsidiary abroad.

(v)

Realization upon divestment or transfer of control of subsidiary.

                               

43

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, except where stated otherwise 

 

21.                   Earnings per share

 

The information related to the earnings per share of the Company was presented in its 2013 annual financial statements, in Note 31.

 

The table below shows the reconciliation of profit or loss for the period adjusted for the amounts used to calculate basic and diluted earnings per share.  

 

 

 

 

 

Basic and diluted

 

 

 

 

 

 

Note

 

Jun/2014

Jun/2013

 

2.1.1(b)

 

 

Revised

 

 

 

 

 

Profit for the period attributed to Company's shareholders

 

 

533,783

101,920

 

 

 

 

 

Distribution of dividends attributable to priority:

 

 

 

 

Preferred shares class "A"

 

 

208,437

101,744

Preferred shares class "B"

 

 

360

176

 

 

 

208,797

101,920

 

 

 

 

 

Distribution of the remaining results to common shares

 

 

273,796

 

 

 

 

 

 

Distribution of plus income, by class

 

 

 

 

Common shares

 

 

29,064

 

Preferred shares class "A"

 

 

22,126

 

 

 

 

51,190

 

 

 

 

 

 

Reconciliation of income available for distribution, by class (numerator):

 

 

 

 

Common shares

 

 

302,860

 

Preferred shares class "A"

 

 

230,563

101,744

Preferred shares class "B"

 

 

360

176

 

 

 

533,783

101,920

 

 

 

 

 

Weighted average number of shares, by class (denominator):

 

 

 

 

Common shares

 

 

451,668,652

 

Preferred shares class "A"

 

 

343,848,120

343,848,120

Preferred shares class "B"

 

 

593,818

593,818

 

 

 

796,110,590

344,441,938

 

 

 

 

 

Profit (loss) per share (in R$)

 

 

 

 

Common shares

 

 

0.6705

 

Preferred shares class "A"

 

 

0.6705

0.2959

Preferred shares class "B"

 

 

0.6062

0.2964

         

 

 

44

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, except where stated otherwise 

 

22.                   Net sales revenues

 

The information on net sales revenue was presented in the 2013 annual financial statements of the Company, in Note 32.

 

 

 

 

 

 

 

 

Note

 

Jun/2014

 

Jun/2013

 

 

 

 

 

 

 

2.1.1(b)

 

 

 

Revised

Sales revenue

 

 

 

 

 

 

 

 

 

 

 

Domestic market

 

 

 

 

 

 

 

16,579,765

 

14,847,261

 

Foreign market

 

 

 

 

 

 

 

9,616,078

 

7,874,635

 

 

 

 

 

 

 

 

 

26,195,843

 

22,721,896

Sales deductions

 

 

 

 

 

 

 

 

 

 

 

Taxes

 

 

 

 

 

 

 

(3,328,430)

 

(3,272,251)

 

Sales returns and other

 

 

 

 

 

 

 

(171,678)

 

(201,231)

 

 

 

 

 

 

 

 

 

(3,500,108)

 

(3,473,482)

 

 

 

 

 

 

 

 

 

 

 

 

Net sales revenue

 

 

 

 

 

 

 

22,695,735

 

19,248,414

 

 

 

 

 

 

 

 

 

 

 

 

                         

 

23.                   Other operating income (expenses)

 

In the period ended June 30, 2014, the main effects on this item were as follows:

 

·      Gain from divestment of DAT (Note 1(a)):

 

 

 

 

 

 

 

 

 

Amount

Proceeds from the sale

 

 

 

 

 

315,000

Cost value of the investment at the date of disposal

 

 

(37,662) 

Gain on disposal

 

 

 

 

 

277,338

 

 

 

 

 

 

 

 

                       

 

·      Expense with additional provision accrued for the Petros Plans in the amount of R$65,000 (Note 18(a)).

 

45

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, except where stated otherwise 

 

24.                   Financial results

      

The information on financial results was presented in the 2013 annual financial statements of the Company, in Note 35.

 

             

Note

 

Jun/2014

 

Jun/2013

             

2.1.1(b)

     

Revised

Financial income

                   
 

Interest income

             

131,068

 

117,738

 

Monetary variations

           

22,756

 

7,779

 

Exchange rate variations

           

(113,059)

 

244,433

 

Other

             

20,979

 

83,563

                 

61,744

 

453,513

                       

Financial expenses

                   
 

Interest expenses

             

(576,717)

 

(525,942)

 

Monetary variations

           

(163,128)

 

(147,454)

 

Exchange rate variations

           

140,594

 

(47,382)

 

Inflation adjustments on fiscal debts

           

(57,614) 

 

(104,944)

 

Tax expenses on financial operations

           

(6,805) 

 

(14,312)

 

Discounts granted

             

(55,792)

 

(38,169)

 

Loans transaction costs - amortization

           

(16,109)

 

(2,987)

 

Adjustment to present value - appropriation

           

(295,442) 

 

(292,373)

 

Other

             

(68,604)

 

(59,404)

                 

(1,099,617)

 

(1,232,967)

                       
                 

(1,037,873)

 

(779,454)

                       

 

 

 

           

Note

 

Jun/2014

 

Jun/2013

           

2.1.1(b)

     

Revised

Interest income - origins by application type

                 

Held for sale

             

13,287

 

4,596

Loans and receivables

           

64,541

 

45,706

Held-to-maturity

             

16,919

 

11,728

               

94,747

 

62,030

Other assets not classifiable

           

36,321

 

55,708

Total

             

131,068

 

117,738

                     

 

 

46

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, except where stated otherwise 

 

25.                   Expenses by nature

 

The information on expenses by nature was presented in the 2013 annual financial statements of the Company, in Note 36.

 

 

             

Note

 

Jun/2014

 

Jun/2013

             

2.1.1(b)

     

Revised

Classification by nature:

                 
 

Raw materials other inputs

           

(17,301,232)

 

(14,585,362)

 

Personnel expenses

           

(1,053,411)

 

(909,747)

 

Outsourced services

           

(810,617)

 

(747,250)

 

Tax expenses

           

(6,358)

 

(4,053)

 

Depreciation, amortization and depletion

           

(993,645)

 

(962,869)

 

Freights

           

(708,934)

 

(733,237)

 

Other expenses

           

(58,199)

 

(305,604)

 

Total

           

(20,932,396)

 

(18,248,122)

                       

Classification by function:

                 
 

Cost of products sold

           

(19,924,421)

 

(17,144,235)

 

Selling and distribution

           

(551,200)

 

(497,238)

 

General and administrative

           

(564,740)

 

(501,730)

 

Research and development

           

(67,018)

 

(51,241)

 

Other operating income (expenses), net

             

174,983  

 

(53,678)

 

Total

           

(20,932,396)

 

(18,248,122)

                       

 

47


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, except where stated otherwise 

 

26.                   Segment information

 

The information by segment was presented in the 2013 annual financial statements, in Note 37.

 

     

Jun/2014

     

Reporting segments

 

Total

         

Braskem

       
     

Basic

         

USA and

 

Chemical

 

reportable

 

Other

 

Corporate

 

consolidated

     

Braskem

 

Note

 

petrochemicals

 

Polyolefins

 

Vinyls

 

Europe

 

distribution

 

segments

 

segments

 

unit

 

before eliminations

 

Eliminations

 

consolidated

                                               

Net sales revenue

   

12,660,681

 

8,899,048

 

1,330,720

 

3,983,307

 

426,764

 

27,300,520

 

138,748

 

 

 

27,439,268

 

(4,743,533)

 

22,695,735

Cost of products sold

   

(11,572,694)

 

(7,607,747)

 

(1,243,347)

 

(3,733,551)

 

(357,928)

 

(24,515,267)

 

(126,546)

 

 

 

(24,641,813)

 

4,717,392

 

(19,924,421)

Gross profit

   

1,087,987

 

1,291,301

 

87,373

 

249,756

 

68,836

 

2,785,253

 

12,202

 

 

 

2,797,455

 

(26,141)

 

2,771,314

                                               

Operating expenses

                                             

Selling, general and distribution expenses

   

(320,878) 

 

(446,267)

 

(90,491)

 

(150,204)

 

(46,950)

 

(1,054,790)

 

(41,449)

 

(86,719)

 

(1,182,958)

 

 

 

(1,182,958)

Results from equity investments

   

 

 

 

 

 

 

 

 

-

 

-

 

-

 

586

 

586

 

 

 

586

Other operating income (expenses), net

   

208,027  

 

(13,777)

 

25,578

 

1,601

 

(4,511)

 

216,918

 

1,488

 

(43,423)

 

174,983

 

 

 

174,983

     

(112,851)

 

(460,044)

 

(64,913)

 

(148,603)

 

(51,461)

 

(837,872)

 

(39,961)

 

(129,556)

 

(1,007,389)

 

 

 

(1,007,389)

                                               

Operating profit (loss)

   

975,136

 

831,257

 

22,460

 

101,153

 

17,375

 

1,947,381

 

(27,759)

 

(129,556)

 

1,790,066

 

(26,141)

 

1,763,925

                                               
                                               
     

Jun/2013

 

2.1.1(b)

 

 

 

 

 

 

 

 

 

 

 

                   

Revised

     

Reporting segments

 

Total

         

Braskem

       
     

Basic

         

USA and

 

Chemical

 

reportable

 

Other

 

Corporate

 

consolidated

     

Braskem

     

petrochemicals

 

Polyolefins

 

Vinyls

 

Europe

 

distribution

 

segments

 

segments

 

unit

 

before eliminations

 

Eliminations

 

consolidated

                                               

Net sales revenue

   

12,012,422

 

7,928,361

 

1,266,851

 

3,170,811

 

429,631

 

24,808,076

 

46,942

 

 

 

24,855,018

 

(5,606,604)

 

19,248,414

Cost of products sold

   

(11,113,942)

 

(6,956,871)

 

(1,157,013)

 

(3,036,140)

 

(362,530)

 

(22,626,496)

 

(52,093)

 

 

 

(22,678,589)

 

5,534,354

 

(17,144,235)

Gross profit

   

898,480

 

971,490

 

109,838

 

134,671

 

67,101

 

2,181,580

 

(5,151)

 

 

 

2,176,429

 

(72,250)

 

2,104,179

     

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     

 

 

 

Operating expenses

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     

 

 

 

Selling, general and distribution expenses

   

(242,365) 

 

(398,535)

 

(78,996)

 

(126,863)

 

(47,241)

 

(894,000)

 

(20,197)

 

(136,012)

 

(1,050,209)

 

 

 

(1,050,209)

Results from equity investments

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,194)

 

(3,194)

 

 

 

(3,194)

Other operating income (expenses), net

   

(14,346) 

 

34

 

958

 

48

 

480

 

(12,826)

 

(2,753)

 

(38,099)

 

(53,678)

 

 

 

(53,678)

     

(256,711)

 

(398,501)

 

(78,038)

 

(126,815)

 

(46,761)

 

(906,826)

 

(22,950)

 

(177,305)

 

(1,107,081)

 

 

 

(1,107,081)

     

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     

 

 

 

Operating profit (loss)

   

641,769

 

572,989

 

31,800

 

7,856

 

20,340

 

1,274,754

 

(28,101)

 

(177,305)

 

1,069,348

 

(72,250)

 

997,098

 

 

48

 


 
 

Braskem S.A.

 

Notes to the financial statements

at June 30, 2014

All amounts in thousands of reais, except where stated otherwise 

 

27.                   Subsequent events

 

In view of the reopening of installment payment of federal taxes, authorized by Law No. 12,996 of June 18, 2014 and amended by Provisional Measure No. 651 of July 9, 2014, a program was added to the program the value of R $ 76,260 on July 31, 2014, to be paid in 180 months.

               

28.                   Information related to guaranteed securities issued by subsidiaries

 

Braskem S.A. has fully and unconditionally guaranteed the obligations of Braskem Finance, Braskem Austria Finance and Braskem America Finance, 100-percent-owned finance subsidiaries of Braskem, under indentures  pursuant to which debt securities have been issued and may be issued in the future. There are no significant restrictions on the ability of Braskem to obtain funds from Braskem Finance, Braskem Austria Finance or Braskem America Finance.

 

 

 

SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: August 8, 2014
  BRASKEM S.A.
 
 
  By:      /s/     Mário Augusto da Silva
 
    Name: Mário Augusto da Silva
    Title: Chief Financial Officer

 

FORWARD-LOOKING STATEMENTS

This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates offuture economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.