cbditr3q10_6k.htm - Generated by SEC Publisher for SEC Filing

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934

For the month of November, 2010

           Brazilian Distribution Company           
(Translation of Registrant’s Name Into English)

Av. Brigadeiro Luiz Antonio,
3142 São Paulo, SP 01402-901
     Brazil     
(Address of Principal Executive Offices)

        (Indicate by check mark whether the registrant files or will file annual reports under cover of 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)):

Yes ___ No   X  

(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)):

Yes ___ No   X  

        (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  


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

Registration with CVM SHOULD not BE CONSTRUED AS AN appreciation on the company. company management is responsible for the information provided.

 

01.01 - IDENTIFICATION

 

1 - CVM CODE

2 - COMPANY NAME

3 - CNPJ (Corporate Taxpayer’s ID)

01482-6

COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

47.508.411/0001-56

4 - NIRE (Corporate Registry ID)

35.300.089.901

                                                     

01.02 - HEADQUARTERS

 

1 - ADDRESS

Av. Brigadeiro Luis Antonio, 3142

2 - DISTRICT

Jardim Paulista

3 - ZIP CODE

01402-901

4 - CITY

São Paulo

5 - STATE

SP

6 - AREA CODE

11

7 - TELEPHONE

3886-0421

8 - TELEPHONE

-

9 - TELEPHONE

-

10 - TELEX

 

11 - AREA CODE

11

12 - FAX

3886-2677

13 - FAX

 -

14 - FAX

 -

 

15 - E-MAIL

gpa.ri@grupopaodeacucar.com.br

 

01.03 - INVESTORS RELATIONS OFFICER (Company Mailing Address)

 

1- NAME

VITOR FAGÁ DE ALMEIDA

2 - ADDRESS

Av. Brigadeiro Luis Antonio, 3142

3 - DISTRICT

Jardim Paulista

4 - ZIP CODE

01402-901

5 - CITY

SÃO PAULO

6 - STATE

SP

7 - AREA CODE

11

8 - TELEPHONE

3886-0421

9 - TELEPHONE

 -

10 - TELEPHONE

 -

11 - TELEX

 

12 - AREA CODE

11

13 - FAX

3884-2677

14 - FAX

 -

15 - FAX

 -

 

16 - E-MAIL

gpa.ri@grupopaodeacucar.com.br

 

01.04 – ITR REFERENCE AND AUDITOR INFORMATION

 

CURRENT YEAR

CURRENT QUARTER

PREVIOUS QUARTER

1 - BEGINNING

2 - END

3 - QUARTER

4 - BEGINNING

5 - END

6 - QUARTER

7 - BEGINNING

8 - END

1/1/2010

12/31/2010

3

7/1/2010

9/30/2010

2

4/1/2010

6/30/2010

09 - INDEPENDENT AUDITOR

ERNST & YOUNG TERCO AUDITORES INDEPENDENTES S.S.

10 - CVM CODE

00471-5

11. TECHNICIAN  IN CHARGE

SERGIO CITERONI

12 – TECHNICIAN’S CPF (INDIVIDUAL TAXPAYER’S ID)

042.300.688-67

1


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01.01 - IDENTIFICATION

 

1 - CVM CODE

01482-6

2 - COMPANY NAME

COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

3 - CNPJ (Corporate Taxpayer’s ID)

47.508.411/0001-56

 

01.05 – CAPITAL STOCK 

 

Number of Shares

(in thousands)

1 – CURRENT QUARTER

9/30/2010

2 – PREVIOUS QUARTER

6/30/2010

3 – SAME QUARTER, PREVIOUS YEAR

9/30/2009

Paid-up Capital

1 - Common

99,680

99,680

99,680

2 - Preferred

157,841

157,774

154,838

3 - Total

257,521

257,454

254,518

Treasury Stock

4 - Common

0

0

0

5 - Preferred

233

233

370

6 - Total

233

233

370

 

01.06 - COMPANY PROFILE

 

1 - TYPE OF COMPANY

Commercial, Industrial and Other

2 - STATUS

Operational

3 - NATURE OF OWNERSHIP

Private National

4 - ACTIVITY CODE

1190 – Trade (Wholesale and Retail)

5 - MAIN ACTIVITY

Retail Trade

 

6 - CONSOLIDATION TYPE

Full

7 – TYPE OF REPORT OF INDEPENDENT AUDITORS

 

 

01.07 - COMPANIES NOT INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENTS

 

1 – ITEM

2 - CNPJ (Corporate Taxpayer’s ID)

3 - COMPANY NAME

 

01.08 - CASH DIVIDENDS APPROVED AND/OR PAID DURING AND AFTER THE QUARTER

 

1 - ITEM

2 - EVENT

3 – APPROVAL

4 - TYPE

5 - DATE OF PAYMENT

6 - TYPE OF SHARE

7 - AMOUNT PER SHARE

01

RCA*

5/7/2010

Dividend

5/31/2010

Common Share

0.0727272727

02

RCA*

5/7/2010

Dividend

5/31/2010

Class A Preferred Share

0.0800000000

03

RCA*

7/27/2010

Dividend

8/17/2010

Class A Preferred Share

0.0800000000

04

RCA*

7/27/20100

Dividend

8/17/2010

Common Share

0.0727272727

*Board of Directors Meeting

2


 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR                                             

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01.01 – IDENTIFICATION

 

 

1 - CVM CODE

01482-6

 

2 - COMPANY NAME

COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

 

3 - CNPJ (Corporate Taxpayer’s ID)

47.508.411/0001-56

 

01.09 – SUBSCRIBED CAPITAL AND CHANGES IN THE CURRENT YEAR

 

1 - ITEM

2 - DATE OF CHANGE

3 - CAPITAL STOCK

 

(In thousands of reais)

4 - AMOUNT OF CHANGE

 

(In thousands of reais)

5 - NATURE OF CHANGE

7 - NUMBER OF SHARES ISSUED

 

(thousand)

8 - SHARE PRICE WHEN ISSUED

(in reais)

01

3/15/2010

5,375,003

252

Stock Option

10

24.6300000000

02

3/15/2010

5,375,003

0

Stock Option

2

0.0100000000

03

3/15/2010

5,375,064

61

Stock Option

2

26.9300000000

04

3/15/2010

5,375,064

0

Stock Option

2

0.0100000000

05

3/15/2010

5,378,061

2,997

Stock Option

109

27.4700000000

06

3/15/2010

5,378,062

1

Stock Option

89

0.0100000000

07

4/29/2010

5,463,542

85,480

Profit Reserve

0

0.0000000000

08

4/29/2010

5,480,324

16,782

Capital Reserve

0

0.0000000000

09

4/29/2010

5,547,451

67,127

Capital Reserve

0

0.0000000000

10

6/9/2010

5,554,893

7,442

Stock Option

244

30.5200000000

11

6/9/2010

5,554,953

60

Stock Option

2

39.7300000000

12

6/9/2010

5,568,829

13,877

Stock Option

563

24.6300000000

13

6/9/2010

5,568,830

2

Stock Option

162

0.0100000000

14

6/9/2010

5,571,369

2,539

Stock Option

94

26.9300000000

15

6/9/2010

5,571,370

1

Stock Option

60

0.0100000000

16

6/9/2010

5,573,438

2,068

Stock Option

75

27.4700000000

17

6/9/2010

5,573,439

1

Stock Option

75

0.0100000000

18

7/12/2010

5,573,514

75

Stock Option

2

40.2800000000

19

7/12/2010

5,573,579

65

Stock Option

3

24.6300000000

20

7/12/2010

5,573,881

302

Stock Option

11

26.9300000000

21

7/12/2010

5,573,881

0

Stock Option

11

0.0100000000

22

7/12/2010

5,574,264

383

Stock Option

14

27.4700000000

23

7/12/2010

5,574,264

0

Stock Option

14

0.0100000000

24

7/12/2010

5,574,379

115

Stock Option

2

46.4900000000

25

7/12/2010

5,574,379

0

Stock Option

10

0.0100000000

 

3


 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR                                             

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01.01 – IDENTIFICATION

 

 

1 - CVM CODE

01482-6

 

2 - COMPANY NAME

COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

 

3 - CNPJ (Corporate Taxpayer’s ID)

47.508.411/0001-56

 

01.09 – SUBSCRIBED CAPITAL AND CHANGES IN THE CURRENT YEAR

 

1 - ITEM

2 - DATE OF CHANGE

3 - CAPITAL STOCK

 

(In thousands of reais)

4 - AMOUNT OF CHANGE

 

(In thousands of reais)

5 - NATURE OF CHANGE

7 - NUMBER OF SHARES ISSUED

 

(thousand)

8 - SHARE PRICE WHEN ISSUED

(in reais)

 

01.10 – INVESTORS RELATIONS OFFICER

 

1 – DATE

11/11/2010

2 – SIGNATURE

4


 

(A free translation of the original in Portuguese)

 

(FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR                             

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01.01 - IDENTIFICATION

 

1 - CVM CODE

01482-6

2 - COMPANY NAME

COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

3 - CNPJ (Corporate Taxpayer’s ID)

47.508.411/0001-56

 

02.01 - BALANCE SHEET - ASSETS (in R$ thousand)

 

1 - CODE

2 - DESCRIPTION

3 – 9/30/2010

4 – 6/30/2010

1

Total Assets

13,925,915

13,364,232

1.01

Current Assets

4,419,947

4,163,806

1.01.01

Cash and Cash Equivalents

1,413,689

1,289,597

1.01.01.01

Cash and Banks

45,375

47,815

1.01.01.02

Financial Investments

1,368,314

1,241,782

1.01.02

Credits

1,459,794

1,423,350

1.01.02.01

Customers

753,743

734,602

1.01.02.02

Sundry Credits

706,051

688,748

1.01.02.02.01

Recoverable Taxes

353,514

365,682

1.01.02.02.02

Deferred Income and Social Contribution Taxes

134,868

88,743

1.01.02.02.03

Receivables Securitization Fund

0

0

1.01.02.02.04

Prepaid Expenses and Other

217,669

234,323

1.01.02.02.05

Dividends Receivables

0

0

1.01.02.02.06

Advance for Future Capital Increase

0

0

1.01.03

Inventories

1,546,464

1,450,859

1.01.04

Other

0

0

1.02

Noncurrent Assets

9,505,968

9,200,426

1.02.01

Long-term Receivables

1,705,243

1,552,278

1.02.01.01

Sundry Credits

701,529

719,169

1.02.01.01.01

Receivables Securitization Fund

116,067

113,484

1.02.01.01.02

Recoverable Taxes

121,120

106,532

1.02.01.01.03

Deferred Income and Social Contribution Taxes

127,727

198,895

1.02.01.01.04

Deposits for Judicial Appeals

269,231

231,819

1.02.01.01.05

Accounts Receivable

32,943

33,588

1.02.01.01.06

Prepaid Expenses and Other

34,441

34,851

1.02.01.01.07

Derivative Financial Instruments

0

0

1.02.01.02

Credits with Related Parties

1,003,714

833,109

1.02.01.02.01

In Direct and Indirect Associated Companies

0

0

1.02.01.02.02

Subsidiaries

970,468

793,692

1.02.01.02.03

Other Related Parties

33,246

39,417

1.02.01.03

Other

0

0

1.02.02

Permanent Assets

7,800,725

7,648,148

1.02.02.01

Investments

2,233,799

2,229,465

1.02.02.01.01

In Direct/Indirect Associated Companies

0

0

1.02.02.01.02

In Direct/Indirect Associated Companies - Goodwill

0

0

1.02.02.01.03

In Subsidiaries

2,233,794

2,229,460

1.02.02.01.04

In Subsidiaries – Goodwill

0

0

1.02.02.01.05

Other Investments

5

5

1.02.02.02

Property and Equipment

4,608,041

4,458,878

1.02.02.03

Intangible Assets

958,885

959,805

1.02.02.04

Deferred Charges

0

0

 

 

5


 

(A free translation of the original in Portuguese)

 

(FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR                             

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01.01 - IDENTIFICATION

 

1 - CVM CODE

01482-6

2 - COMPANY NAME

COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

3 - CNPJ (Corporate Taxpayer’s ID)

47.508.411/0001-56

 

02.02 - BALANCE SHEET - LIABILITIES (in R$ thousand)

 

1 - CODE

2 - DESCRIPTION

3 – 9/30/2010

4 – 6/30/2010

2

Total Liabilities

13,925,915

13,364,232

2.01

Current Liabilities

3,604,072

3,579,404

2.01.01

Loans and Financing

696,456

668,084

2.01.02

Debentures

491,204

502,964

2.01.03

Suppliers

1,825,942

1,815,552

2.01.04

Taxes, Fees and Contributions

104,298

131,304

2.01.05

Dividends Payable

1,348

1,674

2.01.06

Provisions

0

0

2.01.07

Debts with Related Parties

16,868

16,688

2.01.08

Other

467,956

443,138

2.01.08.01

Payroll and Social Contributions

263,997

205,351

2.01.08.02

Public Utilities

3,576

3,847

2.01.08.03

Rentals

21,174

20,052

2.01.08.04

Advertising

24,957

45,362

2.01.08.05

Insurance

55

113

2.01.08.06

Financing due to Purchase of Assets

14,211

14,211

2.01.08.07

Other Accounts Payable

83,514

91,585

2.01.08.08

Companies Acquisitions

6,527

12,577

2.01.08.09

 Tax Installment Payment

49,945

50,040

2.02

Noncurrent Liabilities

3,443,090

3,009,479

2.02.01

Long-term Liabilities

3,443,090

3,009,479

2.02.01.01

Loans and Financing

1,055,492

570,096

2.02.01.02

Debentures

1,051,519

1,035,695

2.02.01.03

Provisions

0

0

2.02.01.04

Debts with Related Parties

0

85,139

2.02.01.05

Advance for Future Capital Increase

0

0

2.02.01.06

Other

1,336,079

1,318,549

2.02.01.06.01

Provision for Litigations

124,620

116,909

2.02.01.06.02

 Tax Installment Payment

1,205,788

1,192,847

2.02.01.06.03

Provision for Capital Deficiency

15

2,504

2.02.01.06.04

Other Accounts Payable

5,656

6,289

2.03

Deferred Income

0

0

2.05

Shareholders' Equity

6,878,753

6,775,349

2.05.01

Paid-up Capital

5,574,379

5,573,438

2.05.02

Capital Reserves

448,729

441,782

2.05.02.01

Special Goodwill Reserve

344,605

344,605

2.05.02.02

Recognized Granted Options

104,086

97,139

2.05.02.03

Capital Reserve

38

38

2.05.03

Revaluation Reserves

0

0

2.05.03.01

Own Assets

0

0

2.05.03.02

Subsidiaries/Direct and Indirect Associated Companies

0

0

2.05.04

Profit Reserves

855,645

760,129

6


 

(A free translation of the original in Portuguese)

 

(FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR                             

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01.01 - IDENTIFICATION

 

1 - CVM CODE

01482-6

2 - COMPANY NAME

COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

3 - CNPJ (Corporate Taxpayer’s ID)

47.508.411/0001-56

 

02.02 - BALANCE SHEET - LIABILITIES (in R$ thousand)

 

1 - CODE

2 - DESCRIPTION

3 – 9/30/2010

4 – 6/30/2010

2.05.04.01

Legal

176,217

176,217

2.05.04.02

Statutory

0

0

2.05.04.03

For Contingencies

0

0

2.05.04.04

Unrealized Profits

0

0

2.05.04.05

Profit Retention

300,078

204,562

2.05.04.06

Special Reserve for Undistributed Dividends

0

0

2.05.04.07

Other Profit Reserves

379,350

379,350

2.05.05

Assets Valuation Adjustments

0

0

2.05.05.01

Securities Adjustments

0

0

2.05.05.02

Accumulated Translation Adjustments

0

0

2.05.05.03

Business Combination Adjustments

0

0

2.05.06

Retained Earnings/Accumulated Losses

0

0

2.05.07

Advance for Future Capital Increase

0

0

7


 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR                             

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01.01 – IDENTIFICATION

 

 

1 - CVM CODE

01482-6

 

2 - COMPANY NAME

COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

 

3 - CNPJ (Corporate Taxpayer’s ID)

47.508.411/0001-56

 

03.01 – STATEMENT OF INCOME (in R$ thousand)

 

1 - CODE

2 - DESCRIPTION

3 – 7/1/2010 to 9/30/2010

4 - 1/1/2010 to 9/30/2010

5 – 7/1/2009 to 9/30/2009

6 - 1/1/2009 to 9/30/2009

3.01

Gross Sales and/or Services

4,080,806

12,506,704

3,864,599

11,382,408

3.02

Gross Revenue Deductions

(405,610)

(1,229,472)

(380,598)

(1,268,001)

3.03

Net Sales and/or Services

3,675,196

11,277,232

3,484,001

10,114,407

3.04

Cost of Sales and/or Services Rendered

(2,657,378)

(8,282,428)

(2,561,283)

(7,447,784)

3.05

Gross Profit

1,017,818

2,994,804

922,718

2,666,623

3.06

Operating Income/Expenses

(857,574)

(2,586,416)

(782,216)

(2,225,397)

3.06.01

Selling

(563,018)

(1,718,958)

(527,770)

(1,532,817)

3.06.02

General and Administrative

(128,268)

(390,040)

(117,949)

(336,841)

3.06.03

Financial

(75,639)

(206,594)

(24,008)

(109,821)

3.06.03.01

Financial Income

73,687

182,218

64,496

179,076

3.06.03.02

Financial Expenses

(149,326)

(388,812)

(88,504)

(288,897)

3.06.04

Other Operating Income

(8,455)

(29,294)

7,306

7,413

3.06.04.01

Permanent Assets Income

(2,107)

(3,689)

(315)

(208)

3.06.04.02

Non-Recurring Income

(6,348)

(25,605)

7,621

7,621

3.06.05

Other Operating Expenses

(95,248)

(328,217)

(85,452)

(249,930)

3.06.05.01

Depreciation/Amortization

(90,451)

(267,930)

(85,452)

(249,930)

3.06.05.02

Other Operating Expenses

(4,797)

(60,287)

0

0

3.06.06

Equity in the Earnings of Subsidiaries and Associated Companies

13,054

86,687

(34,343)

(3,401)

3.07

Operating Result

160,244

408,388

140,502

441,226

3.08

Non-Operating Result

0

0

0

0

3.08.01

Revenues

0

0

0

0

3.08.02

Expenses

0

0

0

0

3.09

Income Before Taxation/Profit Sharing

160,244

408,388

140,502

441,226

3.10

Provision for Income Tax and Social Contribution

(13,685)

(3,285)

7,342

(9,029)

3.11

Deferred Income Tax

(25,043)

(83,527)

24,735

(27,255)

3.12

Statutory Profit Sharing /Contributions

(6,410)

(17,976)

(1,532)

(7,309)

3.12.01

Profit Sharing

(6,410)

(17,976)

(1,532)

(7,309)

3.12.02

Contributions

0

0

0

0

8


 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR                             

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01.01 – IDENTIFICATION

 

 

1 - CVM CODE

01482-6

 

2 - COMPANY NAME

COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

 

3 - CNPJ (Corporate Taxpayer’s ID)

47.508.411/0001-56

 

03.01 – STATEMENT OF INCOME (in R$ thousand)

 

1 - CODE

2 - DESCRIPTION

3 – 7/1/2010 to 9/30/2010

4 - 1/1/2010 to 9/30/2010

5 – 7/1/2009 to 9/30/2009

6 - 1/1/2009 to 9/30/2009

3.13

Reversal of Interest on Shareholders’ Equity

0

0

0

0

3.15

Income/Loss for the Period

115,106

303,600

171,047

397,633

 

No. SHARES, EX-TREASURY (in thousands)

257,288

257,288

254,148

254,148

 

EARNINGS PER SHARE (in reais)

0.44738

1.18000

0.67302

1.56457

 

LOSS PER SHARE (in reais)

 

 

 

 

9


 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR                             

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01.01 – IDENTIFICATION

 

 

1 - CVM CODE

01482-6

 

2 - COMPANY NAME

COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

 

3 - CNPJ (Corporate Taxpayer’s ID)

47.508.411/0001-56

 

04.01 – STATEMENT OF CASH FLOWS – INDIRECT METHOD (in R$ thousand)

 

1 - CODE

2 - DESCRIPTION

3 – 7/1/2010 to 9/30/2010

4 - 1/1/2010 to 9/30/2010

5 – 7/1/2009 to 9/30/2009

6 - 1/1/2009 to 9/30/2009

4.01

Net Cash from Operating Activities

(47,041)

(495,822)

308,561

724,348

4.01.01

Cash Generated in the Operations

301,375

778,977

336,896

893,583

4.01.01.01

Net Income for the Period

115,106

303,600

171,047

397,633

4.01.01.02

Deferred Income Tax

25,043

83,527

(24,735)

27,255

4.01.01.03

Income from Written-Off Permanent Assets

(284)

2,707

(489)

1,354

4.01.01.04

Depreciation and Amortization

90,451

267,930

85,452

249,930

4.01.01.05

Interest and Monetary Variation

60,288

148,366

52,445

166,578

4.01.01.06

Adjustment to Present Value

4,402

4,402

(2,155)

(2,155)

4.01.01.07

Equity in the Earnings of Subsidiaries and Associated Companies

(13,054)

(86,687)

34,343

3,401

4.01.01.08

Provision for Contingencies

12,175

35,200

10,584

33,153

4.01.01.09

Provision for Write-Offs/ Fixed Assets Losses

301

(287)

2,372

(2,073)

4.01.01.10

Share-Based Payment

6,947

20,219

8,032

18,507

4.01.02

Variation on Assets and Liabilities

(348,416)

(1,274,799)

(28,335)

(169,235)

4.01.02.01

Accounts Receivable

(18,756)

56,845

(129,004)

150,185

4.01.02.02

Inventories

(95,604)

(24,851)

(228,437)

(288,580)

4.01.02.03

Recoverable Taxes

889

(103,819)

188,324

216,719

4.01.02.04

Other Assets

17,063

(137,839)

(289,065)

(216,179)

4.01.02.05

Related Parties

(239,540)

(488,448)

62,756

39,643

4.01.02.06

Judicial Deposits

(24,546)

(43,857)

(20,318)

(26,850)

4.01.02.07

Suppliers

10,390

(501,503)

229,963

(80,731)

4.01.02.08

Payroll and Charges

58,646

38,447

51,781

57,411

4.01.02.09

Taxes and Social Contributions Payable

(16,231)

6,003

1,126,489

1,082,960

4.01.02.10

Other Accounts Payable

(40,727)

(75,777)

(1,020,824)

(1,103,813)

4.01.03

Other

0

0

0

0

4.02

Net Cash from Investment Activities

(238,756)

(605,055)

(529,483)

(679,243)

10


 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR                             

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01.01 – IDENTIFICATION

 

 

1 - CVM CODE

01482-6

 

2 - COMPANY NAME

COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

 

3 - CNPJ (Corporate Taxpayer’s ID)

47.508.411/0001-56

 

04.01 – STATEMENT OF CASH FLOWS – INDIRECT METHOD (in R$ thousand)

 

1 - CODE

2 - DESCRIPTION

3 – 7/1/2010 to 9/30/2010

4 - 1/1/2010 to 9/30/2010

5 – 7/1/2009 to 9/30/2009

6 - 1/1/2009 to 9/30/2009

4.02.01

Capital Increase in Subsidiaries

0

(28,553)

(373,423)

(373,363)

4.02.02

Acquisition of Fixed Assets

(232,580)

(558,427)

(152,831)

(273,335)

4.02.03

Increase in Intangible Assets

(7,477)

(20,986)

(3,651)

(34,512)

4.02.04

Sale of Fixed Assets

1,301

2,911

422

1,967

4.03

Net Cash from Financing Activities

409,889

586,129

516,751

529,839

4.03.01

Capital Increase/Decrease

940

30,240

673,318

663,747

4.03.02

Funding and Refinancing

490,258

823,878

1,660

221,596

4.03.03

Payments

(18,451)

(54,762)

(83,384)

(154,516)

4.03.04

Interest Paid

(42,942)

(81,280)

(43,944)

(1 08,441)

4.03.05

Payment of Dividends

(19,916)

(131,947)

(30,899)

(92,547)

4.04

Exchange Variation on Cash and Cash Equivalents

0

0

0

0

4.05

Increase (Decrease) in Cash and Cash Equivalents

124,092

(514,748)

295,829

574,944

4.05.01

Opening Balance of Cash and Cash Equivalents

1,289,597

1,928,437

1,532,842

1,253,727

4.05.02

Closing Balance of Cash and Cash Equivalents

1,413,689

1,413,689

1,828,671

1,828,671

 

11


 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR                             

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01.01 - IDENTIFICATION

 

1 - CVM CODE

01482-6

2 - COMPANY NAME

COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

3 - CNPJ (Corporate Taxpayer’s ID)

47.508.411/0001-56

 

05.01 – STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY FROM 7/1/2010 TO 9/30/2010 (in R$ thousand)

 

1 - CODE

2 – DESCRIPTION

3 – CAPITAL STOCK

4 – CAPITAL RESERVES

5 –REVALUATION RESERVES

6 – PROFIT RESERVES

7 – RETAINED EARNINGS/ACCUMULATED LOSSES

8 –ASSETS VALUATION ADJUSTMENTS

9 -  TOTAL SHAREHOLDERS' EQUITY

5.01

Opening Balance

5,573,438

441,782

0

590,850

169,279

0

6,775,349

5.02

Adjustments of Previous Years

0

0

0

0

0

0

0

5.03

Adjusted Balance

5,573,438

441,782

0

590,850

169,279

0

6,775,349

5.04

Net Income/Loss for the Period

0

0

0

0

115,106

0

115,106

5.05

Allocations

0

0

0

0

(19,590)

0

(19,590)

5.05.01

Dividends

0

0

0

0

(19,590)

0

(19,590)

5.05.02

Interest on Shareholders’ Equity

0

0

0

0

0

0

0

5.05.03

Other Allocations

0

0

0

0

0

0

0

5.06

Realization of Profit Reserves

0

0

0

0

0

0

0

5.07

Assets Valuation Adjustments

0

0

0

0

0

0

0

5.07.01

Securities Adjustments

0

0

0

0

0

0

0

5.07.02

Accumulated Translation Adjustments

0

0

0

0

0

0

0

5.07.03

Business Combination Adjustments

0

0

0

0

0

0

0

5.08

Increase/Decrease in Capital Stock

941

6,947

0

0

0

0

7,888

5.08.01

Subscribed Capital

941

0

0

0

0

0

941

5.08.02

Capitalization of Reserves

0

0

0

0

0

0

0

5.08.03

Recognized Granted Options

0

6,947

0

0

0

0

6,947

5.09

Recording/Realization of Capital Reserves

0

0

0

0

0

0

0

5.10

Treasury Shares

0

0

0

0

0

0

0

5.11

Other Capital Transactions

0

0

0

0

0

0

0

5.12

Other

0

0

0

0

0

0

0

5.13

Closing Balance

5,574,379

448,729

0

590,850

264,795

0

6,878,753


12


 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR                             

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01.01 - IDENTIFICATION

 

1 - CVM CODE

01482-6

2 - COMPANY NAME

COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

3 - CNPJ (Corporate Taxpayer’s ID)

47.508.411/0001-56

 

05.02 – STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY FROM 1/1/2010 TO 9/30/2010 (in R$ thousand)

 

1 - CODE

2 – DESCRIPTION

3 – CAPITAL STOCK

4 – CAPITAL RESERVES

5 –REVALUATION RESERVES

6 – PROFIT RESERVES

7 – RETAINED EARNINGS/ACCUMULATED LOSSES

8 –ASSETS VALUATION ADJUSTMENTS

9 -  TOTAL SHAREHOLDERS' EQUITY

5.01

Opening Balance

5,374,751

512,419

0

672,290

0

0

6,559,460

5.02

Adjustments of Previous Years

0

0

0

0

0

0

0

5.03

Adjusted Balance

5,374,751

512,419

0

672,290

0

0

6,559,460

5.04

Net Income/Loss for the Period

0

0

0

0

303,600

0

303,600

5.05

Allocations

0

0

0

0

(38,805)

0

(38,805)

5.05.01

Dividends

0

0

0

0

(38,805)

0

(38,805)

5.05.02

Interest on Shareholders’ Equity

0

0

0

0

0

0

0

5.05.03

Other Allocations

0

0

0

0

0

0

0

5.06

Realization of Profit Reserves

0

0

0

0

0

0

0

5.07

Assets Valuation Adjustments

0

0

0

0

0

0

0

5.07.01

Securities Adjustments

0

0

0

0

0

0

0

5.07.02

Accumulated Translation Adjustments

0

0

0

0

0

0

0

5.07.03

Business Combination Adjustments

0

0

0

0

0

0

0

5.08

Increase/Decrease in Capital Stock

199,628

(63,690)

0

(85,480)

0

0

50,458

5.08.01

Subscribed Capital

30,240

0

0

0

0

0

30,240

5.08.02

Capitalization of Reserves

169,388

(83,908)

0

(85,480)

0

0

0

5.08.03

Recognized Granted Options

0

20,218

0

0

0

0

20,218

5.09

Recording/Realization of Capital Reserves

0

0

0

0

0

0

0

5.10

Treasury Shares

0

0

0

4,040

0

0

4,040

5.11

Other Capital Transactions

0

0

0

0

0

0

0

5.12

Other

0

0

0

0

0

0

0

5.13

Closing Balance

5,574,379

448,729

0

590,850

264,795

0

6,878,753

13


 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR                             

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

 

01.01 - IDENTIFICATION

 

1 - CVM CODE

01482-6

2 - COMPANY NAME

COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

3 - CNPJ (Corporate Taxpayer’s ID)

47.508.411/0001-56

 

08.01 – CONSOLIDATED BALANCE SHEET – ASSETS (in R$ thousand)

 

1 – CODE

2 – DESCRIPTION

3 – 9/30/2010

4 – 6/30/2010

1

Total Assets

18,608,465

17,926,195

1.01

Current Assets

8,705,954

8,278,070

1.01.01

Cash and Cash Equivalents

2,128,035

1,768,200

1.01.01.01

Cash and Banks

265,687

226,538

1.01.01.02

Financial Investments

1,862,348

1,541,662

1.01.02

Credits

3,561,641

3,669,348

1.01.02.01

Customers

2,124,322

2,234,944

1.01.02.02

Sundry Credits

1,437,319

1,434,404

1.01.02.02.01

Recoverable Taxes

727,562

705,112

1.01.02.02.02

Deferred Income and Social Contribution Taxes

228,788

196,541

1.01.02.02.03

Prepaid Expenses and Other

480,969

532,751

1.01.03

Inventories

3,016,278

2,816,066

1.01.04

Other

0

24,456

1.01.04.01

Related Parties

0

24,456

1.01.04.02

Other

0

0

1.02

Noncurrent Assets

9,902,511

9,648,125

1.02.01

Long-term Receivables

2,549,774

2,519,192

1.02.01.01

Sundry Credits

2,260,437

2,249,035

1.02.01.01.01

Recoverable Taxes

208,795

191,553

1.02.01.01.02

Deferred Income and Social Contribution Taxes

1,041,255

1,106,956

1.02.01.01.03

Deposits for Judicial Appeals

523,626

472,628

1.02.01.01.04

Accounts Receivable

468,869

442,527

1.02.01.01.05

Prepaid Expenses and Other

17,892

35,371

1.02.01.02

Credits with Related Parties

289,337

270,157

1.02.01.02.01

In Direct and Indirect Associated Companies

0

0

1.02.01.02.02

Subsidiaries

217,775

217,824

1.02.01.02.03

Other Related Parties

71,562

52,333

1.02.01.03

Other

0

0

1.02.02

Permanent Assets

7,352,737

7,128,933

1.02.02.01

Investments

249,383

237,643

1.02.02.01.01

In Direct/Indirect Associated Companies

0

0

1.02.02.01.02

In Subsidiaries

249,378

237,638

1.02.02.01.03

Other Investments

5

5

1.02.02.02

Property and Equipment

5,650,599

5,437,575

1.02.02.03

Intangible Assets

1,452,755

1,453,715

1.02.02.04

Deferred Charges

0

0

 

 

14


 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR                             

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

1.01– IDENTIFICATION

 

1 – CVM CODE

01482-6

2 – COMPANY NAME

COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

3 – CNPJ (Corporate Taxpayer’s ID)

47.508.411/0001-56

 

08.02 – CONSOLIDATED BALANCE SHEET – LIABILITIES (in R$ thousand)

 

1 – CODE

2 – DESCRIPTION

3 – 9/30/2010

4 – 6/30/2010

2

Total Liabilities

18,608,465

17,926,195

2.01

Current Liabilities

5,903,834

5,856,278

2.01.01

Loans and Financing

825,946

810,445

2.01.02

Debentures

491,204

502,964

2.01.03

Suppliers

3,274,124

3,263,749

2.01.04

Taxes, Fees and Contributions

185,350

226,854

2.01.05

Dividends Payable

2,981

3,349

2.01.06

Provisions

0

0

2.01.07

Debts with Related Parties

94,332

36,892

2.01.08

Other

1,029,897

1,012,025

2.01.08.01

Payroll and Social Contributions

400,164

364,994

2.01.08.02

Public Utilities

7,221

7,517

2.01.08.03

Rentals

64,168

47,913

2.01.08.04

Advertising

25,160

45,825

2.01.08.05

Insurance

163

212

2.01.08.06

Financing due to Purchase of Assets

14,211

14,212

2.01.08.07

Other Accounts Payable

291,654

300,841

2.01.08.08

Advance for Future Capital Increase

6

0

2.01.08.09

Companies Acquisition

173,078

174,832

2.01.08.10

Tax Installment Payment

54,072

55,679

2.02

Noncurrent Liabilities

5,764,064

5,226,007

2.02.01

Long-term Liabilities

5,764,064

5,226,007

2.02.01.01

Loans and Financing

2,919,768

2,399,241

2.02.01.02

Debentures

1,051,519

1,035,695

2.02.01.03

Provisions

0

0

2.02.01.04

Debts with Related Parties

0

0

2.02.01.05

Advance for Future Capital Increase

0

0

2.02.01.06

Other

1,792,777

1,791,071

2.02.01.06.01

Provision for Litigations

297,295

284,237

2.02.01.06.02

Tax Installment Payment

1,313,313

1,294,751

2.02.01.06.03

Other Accounts Payable

182,169

212,083

2.03

Deferred Income

0

0

2.04

Minority Shareholders

61,814

68,561

2.05

Shareholders’ Equity

6,878,753

6,775,349

2.05.01

Paid-up Capital

5,574,379

5,573,438

2.05.02

Capital Reserve

448,729

441,782

2.05.02.01

Goodwill Special Reserve

344,605

344,605

2.05.02.02

Recognized Granted Options

104,086

97,139

2.05.02.03

Capital Reserve

38

38

2.05.03

Revaluation Reserves

0

0

2.05.03.01

Own Assets

0

0

2.05.03.02

Subsidiaries/Direct and Indirect Associated Companies

0

0

2.05.04

Profit Reserves

855,645

760,129

2.05.04.01

Legal

176,217

176,217

2.05.04.02

Statutory

0

0

 

15


 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR                             

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01.01– IDENTIFICATION

 

1 – CVM CODE

01482-6

2 – COMPANY NAME

COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

3 – CNPJ (Corporate Taxpayer’s ID)

47.508.411/0001-56

 

08.02 – CONSOLIDATED BALANCE SHEET – LIABILITIES (in R$ thousand)

 

1 – CODE

2 – DESCRIPTION

3 – 9/30/2010

4 – 6/30/2010

2.05.04.03

For Contingencies

0

0

2.05.04.04

Unrealized Profits

0

0

2.05.04.05

Profit Retention

300,078

204,562

2.05.04.06

Special for Non-Distributed Dividends

0

0

2.05.04.07

Other Profit Reserves

379,350

379,350

2.05.05

Assets Valuation Adjustments

0

0

2.05.05.01

Securities Adjustments

0

0

2.05.05.02

Accumulated Translation Adjustments

0

0

2.05.05.03

Business Combination Adjustments

0

0

2.05.06

Retained Earnings/Accumulated Losses

0

0

2.05.07

Advance for Future Capital Increase

0

0

 

16


 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR                             

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01.01 – IDENTIFICATION

 

 

1 - CVM CODE

01482-6

 

2 - COMPANY NAME

COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

 

3 - CNPJ (Corporate Taxpayer’s ID)

47.508.411/0001-56

 

09.01 – CONSOLIDATED STATEMENT OF INCOME (in R$ thousand)

 

1 - CODE

2 - DESCRIPTION

3 – 7/1/2010 to 9/30/2010

4 - 1/1/2010 to 9/30/2010

5 – 7/1/2009 to 9/30/2009

6 - 1/1/2009 to 9/30/2009

3.01

Gross Sales and/or Services

7,939,559

23,540,650

6,931,337

17,864,000

3.02

Gross Revenue Deductions

(839,204)

(2,488,897)

(780,322)

(2,064,689)

3.03

Net Sales and/or Services

7,100,355

21,051,753

6,151,015

15,799,311

3.04

Cost of Sales and/or Services Rendered

(5,356,121)

(16,000,397)

(4,645,098)

(11,849,729)

3.05

Gross Profit

1,744,234

5,051,356

1,505,917

3,949,582

3.06

Operating Income/Expenses

(1 ,572,419)

(4,616,689)

(1,368,749)

(3,494,265)

3.06.01

Selling

(1,063,505)

(3,180,833)

(958,651)

(2,465,480)

3.06.02

General and Administrative

(187,267)

(571,769)

(197,269)

(472,933)

3.06.03

Financial

(191,725)

(465,185)

(64,711)

(196,984)

3.06.03.01

Financial Income

77,434

221,774

72,442

193,438

3.06.03.02

Financial Expenses

(269,159)

(686,959)

(137,153)

(390,422)

3.06.04

Other Operating Income

(9,841)

27,990

(18,066)

(22,597)

3.06.04.01

Other Operating Income

(2,913)

102,676

6,541

6,541

3.06.04.02

Permanent Assets Income

1,637

3,974

6,818

2,287

3.06.04.03

Non-Recurring Income

(8,565)

(78,660)

(31,425)

(31,425)

3.06.05

Other Operating Expenses

(131,822)

(462,882)

(131,640)

(345,155)

3.06.05.01

Other Operating Expenses

(3,383)

(81,807)

(8,709)

(8,709)

3.06.05.02

Depreciation/Amortization

(128,439)

(381,075)

(122,931)

(336,446)

3.06.06

Equity in the Earnings of Subsidiaries and Associated Companies

11,741

35,990

1,588

8,884

3.07

Operating Result

171,815

434,667

137,168

455,317

3.08

Non-Operating Result

0

0

0

0

3.08.01

Revenues

0

0

0

0

3.08.02

Expenses

0

0

0

0

3.09

Income Before Taxation/Profit Sharing

171,815

434,667

137,168

455,317

3.10

Provision for Income and Social Contribution Taxes

(23,574)

(28,610)

(17,386)

(38,670)

17


 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR                             

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01.01 – IDENTIFICATION

 

 

1 - CVM CODE

01482-6

 

2 - COMPANY NAME

COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

 

3 - CNPJ (Corporate Taxpayer’s ID)

47.508.411/0001-56

 

09.01 – CONSOLIDATED STATEMENT OF INCOME (in R$ thousand)

 

1 - CODE

2 - DESCRIPTION

3 – 7/1/2010 to 9/30/2010

4 - 1/1/2010 to 9/30/2010

5 – 7/1/2009 to 9/30/2009

6 - 1/1/2009 to 9/30/2009

3.11

Deferred Income Tax

(31,427)

(107,093)

78,886

13,395

3.12

Statutory Profit Sharing /Contributions

(8,383)

(23,582)

(2,008)

(9,580)

3.12.01

Profit Sharing

(8,383)

(23,582)

(2,008)

(9,580)

3.12.02

Contributions

0

0

0

0

3.13

Reversal of Interest on Shareholders’ Equity

0

0

0

0

3.14

Minority Interest

6,675

28,218

(25,613)

(22,829)

3.15

Income/Loss for the Period

115,106

303,600

171,047

397,633

 

No. SHARES, EX-TREASURY (in thousands)

257,288

257,288

254,148

254,148

 

EARNINGS PER SHARE (in reais)

0.44738

1.18000

0.67302

1.56457

 

LOSS PER SHARE (in reais)

 

 

 

 

18


 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR                             

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01.01 – IDENTIFICATION

 

 

1 - CVM CODE

01482-6

 

2 - COMPANY NAME

COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

 

3 - CNPJ (Corporate Taxpayer’s ID)

47.508.411/0001-56

 

10.01 – CONSOLIDATED STATEMENT OF CASH FLOWS – INDIRECT METHOD (in R$ thousand)

 

1 - CODE

2 - DESCRIPTION

3 – 7/1/2010 to 9/30/2010

4 - 1/1/2010 to 9/30/2010

5 – 7/1/2009 to 9/30/2009

6 - 1/1/2009 to 9/30/2009

4.01

Net Cash from Operating Activities

319,178

(264,287)

831,610

1,149,931

4.01.01

Cash Generated in the Operations

496,109

1,100,622

382,127

1,129,493

4.01.01.01

Net Income in the Period

115,106

303,600

171,047

397,633

4.01.01.02

Deferred Income Tax

31,427

107,093

(78,886)

(13,395)

4.01.01.03

Income from Written-Off Permanent Assets

47,796

41,805

160

(117)

4.01.01.04

Depreciation/Amortization

128,439

381,075

122,931

336,446

4.01.01.05

Interest and Monetary Variation

106,458

192,346

112,373

323,260

4.01.01.06

Adjustment to Present Value

97,041

97,041

(2,915)

(2,915)

4.01.01.07

Equity in the Earnings of Subsidiaries and Associated Companies

(11,741)

(35,990)

(1,588)

(8,884)

4.01.01.08

Provision for Contingencies

28,179

67,656

23,798

54,567

4.01.01.09

Provision for Write-Offs/ Fixed Assets Losses

(46,868)

(46,005)

1,562

1,562

4.01.01.10

Share-Based Payment

6,947

20,219

8,032

18,507

4.01.01.11

Minority Interest

(6,675)

(28,218)

25,613

22,829

4.01.02

Variation in Assets and Liabilities

(176,931)

(1,364,909)

449,483

20,438

4.01.02.01

Accounts Receivable

29,529

115,207

(108,897)

74,655

4.01.02.02

Inventories

(202,948)

(192,733)

(379,424)

(465,557)

4.01.02.03

Recoverable Taxes

(36,185)

(255,629)

322,474

357,196

4.01.02.04

Other Assets

69,262

(113,074)

11,416

(2,899)

4.01.02.05

Related Parties

62,521

39,363

9,612

15,469

4.01.02.06

Judicial Deposits

(49,194)

(89,033)

(41,813)

(60,645)

4.01.02.07

Suppliers

4,528

(742,498)

549,184

110,919

4.01.02.08

Payroll and Charges

35,170

(28,154)

111,395

122,332

4.01.02.09

Taxes and Social Contributions Payable

(28,488)

(21,931)

1,147,844

1,099,344

4.01.02.10

Other Accounts Payable

(61,126)

(76,427)

(1,172,308)

(1,230,376)

4.01.03

Other

0

0

0

0

19


 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR                             

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01.01 – IDENTIFICATION

 

 

1 - CVM CODE

01482-6

 

2 - COMPANY NAME

COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

 

3 - CNPJ (Corporate Taxpayer’s ID)

47.508.411/0001-56

 

 

10.01 – CONSOLIDATED STATEMENT OF CASH FLOWS – INDIRECT METHOD (in R$ thousand)

 

1 - CODE

2 - DESCRIPTION

3 – 7/1/2010 to 9/30/2010

4 - 1/1/2010 to 9/30/2010

5 – 7/1/2009 to 9/30/2009

6 - 1/1/2009 to 9/30/2009

4.02

Net Cash from Investment Activities

(340,835)

(815,034)

(829,631)

(1,062,244)

4.02.01

Net Cash from Acquisitions

0

0

82,765

82,765

4.02.02

Companies Acquisition

0

(28,553)

(698,305)

(698,305)

4.02.03

Capital Increase in Subsidiaries

0

(971)

(654)

(16,277)

4.02.04

Acquisition of Fixed Assets

(334,055)

(758,814)

(208,232)

(395,615)

4 .02.05

Increase in Intangible Assets

(10,925)

(33,579)

(6,205)

(37,645)

4.02.06

Sale of Fixed Assets

4,145

6,883

1,000

2,833

4.03

Net Cash from Financing Activities

381,492

863,156

426,379

440,404

4.03.01

Capital Increase/Decrease

940

30,240

673,318

663,747

4.03.02

Funding and Refinancing

481,689

1,362,030

17,233

252,268

4.03.03

Payments

(49,607)

(291,016)

(186,800)

(266,244)

4.03.04

Interest Paid

(31,573)

(106,466)

(44,016)

(110,677)

4.03.05

Payments of Dividends

(19,957)

(131,632)

(33,356)

(98,690)

4.04

Exchange Variation on Cash and Cash Equivalents

0

0

0

0

4.05

Increase (Reduction) in Cash and Cash Equivalents

359,835

(216,165)

428,358

528,091

4.05.01

Opening Balance of Cash and Cash Equivalents

1,768,200

2,344,200

1,725,345

1,625,612

4.05.02

Closing Balance of Cash and Cash Equivalents

2,128,035

2,128,035

2,153,703

2,153,703

20


 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR                             

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01.01 – IDENTIFICATION

 

 

1 - CVM CODE

01482-6

 

2 - COMPANY NAME

COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

 

3 - CNPJ (Corporate Taxpayer’s ID)

47.508.411/0001-56

 

11.01 – CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDER’S EQUITY FROM 7/1/2010 TO 9/30/2010 (in R$ thousand)

 

1 – CODE

2 – DESCRIPTION

3 – CAPITAL STOCK

4 – CAPITAL RESERVES

5 –REVALUATION RESERVES

6 – PROFIT RESERVES

7 – RETAINED EARNINGS/ACCUMULATED LOSSES

8 – ASSETS VALUATION ADJUSTMENTS

9 –TOTAL SHAREHOLDERS’ EQUITY

5.01

Opening Balance

5,573,438

441,782

0

590,850

169,279

0

6,775,349

5.02

Adjustments of Previous Years

0

0

0

0

0

0

0

5.03

Adjusted Balance

5,573,438

441,782

0

590,850

169,279

0

6,775,349

5.04

Net Income/Loss for the Period

0

0

0

0

115,106

0

115,106

5.05

Allocations

0

0

0

0

(19,590)

0

(19,590)

5.05.01

Dividends

0

0

0

0

(19,590)

0

(19,590)

5.05.02

Interest on Shareholders’ Equity

0

0

0

0

0

0

0

5.05.03

Other Allocations

0

0

0

0

0

0

0

5.06

Realization of Profit Reserves

0

0

0

0

0

0

0

5.07

Assets Valuation Adjustments

0

0

0

0

0

0

0

5.07.01

Securities Adjustments

0

0

0

0

0

0

0

5.07.02

Accumulated Translation Adjustments

0

0

0

0

0

0

0

5.07.03

Business Combination Adjustments

0

0

0

0

0

0

0

5.08

Increase/Decrease in Capital Stock

941

6,947

0

0

0

0

7,888

5.08.01

Subscribed Capital

941

0

0

0

0

0

941

5.08.02

Capitalization of Reserves

0

0

0

0

0

0

0

5.08.03

Recognized Granted Options

0

6,947

0

0

0

0

6,947

5.09

Recording/Realization of Capital Reserves

0

0

0

0

0

0

0

5.10

Treasury Shares

0

0

0

0

0

0

0

5.11

Other Capital Transactions

0

0

0

0

0

0

0

5.12

Other

0

0

0

0

0

0

0

5.13

Closing Balance

5,574,379

448,729

0

590,850

264,795

0

6,878,753

21


 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR                             

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01.01 – IDENTIFICATION

 

 

1 - CVM CODE

01482-6

 

2 - COMPANY NAME

COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

 

3 - CNPJ (Corporate Taxpayer’s ID)

47.508.411/0001-56

 

11.02 – CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDER’S EQUITY FROM 1/1/2010 TO 9/30/2010 (in R$ thousand)

 

1 – CODE

2 – DESCRIPTION

3 – CAPITAL STOCK

4 – CAPITAL RESERVES

5 –REVALUATION RESERVES

6 – PROFIT RESERVES

7 – RETAINED EARNINGS/ACCUMULATED LOSSES

8 –ASSETS VALUATION ADJUSTMENTS

9 –TOTAL SHAREHOLDERS’ EQUITY

5.01

Opening Balance

5,374,751

512,419

0

672,290

0

0

6,559,460

5.02

Adjustments of Previous Years

0

0

0

0

0

0

0

5.03

Adjusted Balance

5,374,751

512,419

0

672,290

0

0

6,559,460

5.04

Net Income/Loss for the Period

0

0

0

0

303,600

0

303,600

5.05

Allocations

0

0

0

0

(38,805)

0

(38,805)

5.05.01

Dividends

0

0

0

0

(38,805)

0

(38,805)

5.05.02

Interest on Shareholders’ Equity

0

0

0

0

0

0

0

5.05.03

Other Allocations

0

0

0

0

0

0

0

5.06

Realization of Profit Reserves

0

0

0

0

0

0

0

5.07

Assets Valuation Adjustments

0

0

0

0

0

0

0

5.07.01

Securities Adjustments

0

0

0

0

0

0

0

5.07.02

Accumulated Translation Adjustments

0

0

0

0

0

0

0

5.07.03

Business Combination Adjustments

0

0

0

0

0

0

0

5.08

Increase/Reduction in Capital Stock

199,628

(63,690)

0

(85,480)

0

0

50,458

5.08.01

Subscribed Capital

30,240

0

0

0

0

0

30,240

5.08.02

Capitalization of Reserves

169,388

(83,908)

0

(85,480)

0

0

0

5.08.03

Recognized Granted Options

0

20,218

0

0

0

0

20,218

5.09

Recording/Realization of Capital Reserves

0

0

0

0

0

0

0

5.10

Treasury Shares

0

0

0

4,040

0

0

4,040

5.11

Other Capital Transactions

0

0

0

0

0

0

0

5.12

Other

0

0

0

0

0

0

0

5.13

Closing Balance

5,574,379

448,729

0

590,850

264,795

0

6,878,753

22


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY FINANCIAL INFORMATION (ITR)

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

 

 

In thousands of reais, except when indicated otherwise.

 

1.    Operations

 

Companhia Brasileira de Distribuição ("Company" or “GPA”), headquartered in the City of São Paulo, State of São Paulo, is a publicly-held corporation.

 

The Company and its subsidiaries operate primarily as a retailer and wholesaler of food products, bazaar articles, clothing, home appliances and other products through its chain of hypermarkets, supermarkets, specialized stores, department stores, convenience stores and the Internet. GPA has the following brands in its portfolio "Pão de Açúcar", "Comprebem", "Extra", "Extra Eletro", “Extra Perto”, “Extra Fácil”, “Extra.com” “Sendas”, “Assai” and “Ponto Frio” e “PontoFrio.com”.

 

Founded in 1948, the Company has 88,000 employees, 1,112 stores in 19 Brazilian states and the Federal District and a logistics infrastructure comprised by 34 warehouses located in 13 states.

 

The Company joined the Level 1 Special Corporate Governance segment of the São Paulo Stock Exchange and its shares are listed at the São Paulo and New York Stock Exchanges (ADR level III).

 

Diniz Group and Casino Group share the Company’s control by means of a holding company named Wilkes Participações S.A., pursuant to the Agreement entered into in May 2005.

 

Relevant Operations and Partnerships

 

a)   Sendas Distribuidora

 

GPA has a partnership with Rio de Janeiro’s retail chain, Sendas, pursuant to Note 10 b (iii) -. Sendas Distribuidora S.A. (“Sendas Distribuidora”) operates retail activities of the Company and Sendas S.A. throughout the State of Rio de Janeiro.

 

b)   Partnership with Itaú

 

As of 2004, GPA is partner of Banco Itaú Unibanco Holding S.A. and Financeira Itaú CBD S.A. ("FIC"). FIC structures and trades financial products, services and related items to GPA customers (see Note 10 b (vi)).

 

c)           Assai

 

As of November 1, 2007, GPA started operating in the cash & carry segment (“atacarejo”), reinforcing its multiformat positioning. With the operations carried out in 2007 and 2009, GPA acquired the total and voting capital of Barcelona Comércio Varejista e Atacadista S.A. (“Barcelona”), the recipient company of Assai Comercial e Importadora Ltda.’s spun-off assets.

 

In October 2008, GPA started operating in the cash & carry segment (“atacarejo”) in the State of Rio de Janeiro (“Assai”) by means of Xantocarpa Participações Ltda. (wholly-owned subsidiary of Sendas Distribuidora – “Xantocarpa”).

23


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY FINANCIAL INFORMATION (ITR) 

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

1.    Operations (Continued)

 

d)   Ponto Frio

 

In July 2009, the Company, by means of one of its subsidiaries, acquired the share control of Globex Utilidades S.A. (“Globex”), strengthening and expanding its operations in the home appliance segment. (See Note 10 b (v))

 

e)   Partnership with Casas Bahia

 

In December 2009, GPA and the controlling partners of Casas Bahia entered into a Partnership Agreement aiming at merging their retail trade of durable goods, as well as consolidating the durable goods e-commerce. This partnership will allow GPA to offer a larger diversity of products, better customer service and easier credit access.

 

At July 1, 2010, GPA and Globex entered into an addendum to the Partnership Agreement, signed on December 4, 2009 with the controlling partners of Casas Bahia Comercial Ltda. (“Casas Bahia”). In the addendum, the parties reviewed certain conditions of the partnership between Globex and Casas Bahia (“Partnership”), and defined the necessary stages for its implementation, as announced to the market through a material fact.

 

The parties have jointly submitted the partnership conditions to the Antitrust Brazilian System, according to the terms originally agreed upon and pursuant to the material fact disclosed by the parties at February 3, 2010, at that date, they entered into a Provisional Agreement for the Maintenance of the Reversibility of Operation (APRO) with the Administrative Council for Economic Defense (CADE). Therefore, at July 6, 2010, the parties notified CADE on the execution of the aforementioned addendum.

 

On November 9, 2010, was held Extraordinary General Meeting of the Company, in which all decisions necessary for the completion and implementation of Association were pproved. Thus, the controlling shareholders of Casa Bahia became the holders of 47% shares of Globex, and the GPA became the holder of shares representing at least 52% of the share capital of Globex, depending the minority interest in the shares of Globex.

 

In addition, Globex will remain as controlling shareholder of Ponto Frio.com Comércio Eletrônico S.A. (“PF.com”) and holder of common shares representing 50.1% of its capital stock. The Company will hold shares representing 43.9% of PF.com’s total capital stock and part of its officers will hold the remaining shares, corresponding to 6% of PF.com’s total capital stock. The latter will operate e-commerce activities, which are currently developed by the websites extra.com, pontofrio.com and casasbahia.com, besides wholesale durable goods e-commerce.

 

 

 

24


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY FINANCIAL INFORMATION (ITR) 

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

 

 

2.    Basis of preparation and presentation of quarterly information

 

a)  Quarterly Information

 

The individual (parent company) and consolidated quarterly information were prepared and are presented according to the rules issued by the Brazilian Securities and Exchange Commission (CVM), the provisions of the Brazilian Corporation Law (Law 6,404/76), including provisions amended by Laws 11,638/07 and 11,941/09, as well as pronouncements, guidelines and interpretations issued by the Brazilian Committee on Accounting Pronouncements (CPC). This quarterly information was analyzed by the Fiscal Council in a meeting held at November 8, 2010 and approved by the Board of Directors at a meeting held on November 9, 2010.

 

During 2009 and 2010, the Brazilian Committee on Accounting Pronouncements (CPC) issued and the Brazilian Securities and Exchange Commission (CVM) approved several Technical Pronouncements, Interpretations and Guidelines whose effectiveness is only mandatory for the fiscal year ended December 31, 2010, requiring that the companies file again the financial statements of the comparative year.

 

The Company decided not to exercise its eligibility concerning the quarterly information of September 30, 2010, and at its best judgment, the Company below shows a brief description of the eventual material changes to the accounting practices previously adopted for the quarterly information of September 30, 2010 and comparative period.

 

- CPC 15 – Business Combination, approved by CVM Deliberation 580/09 of July 31, 2009: It mainly establishes the buyer’s principles and requirements in a business combination. The Company expects that the figures referring to the acquisition of Globex Utilidades S.A. will change when applying this Pronouncement retrospectively to January 1, 2009, due to the new measurement of goodwill by the expectation of future profitability, resulting from the measurement of Globex’s net assets by the fair value of assets acquired (including identified intangible assets) and obligations assumed.

 

- CPC 22 – Information by Segment, approved by CVM Deliberation 582 of July 31, 2009: It sets forth that reporting shall be divided by the Company’s operating segment. “Operating segment” is defined as an entity’s component: (a) that develops business activities generating revenues and incurring in expenses; (b) whose operational results are regularly reviewed by the top manager of the Company’s operations in the decision-making process; and (c) to which the financial information is available.

 

The Company’s Management will analyze additional reporting in its financial statements resulting from the data and indicators of assets, liabilities and results identifiable for each one of its operating segments.

 

- CPC 24 – Subsequent Event, approved by CVM Deliberation 593 of September 15, 2009: The main impact for applying this rule refers to the recording of dividends. According to CPC 24 at the end of the fiscal year, the Company shall recognize as liability only the mandatory minimum dividend established in its Bylaws. Additional minimum dividends will be recorded as liability as these are approved by the Company’s appropriate bodies.

 

 

25


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

 

2.    Basis of preparation and presentation of quarterly information (Continued)

 

- CPC 26 – Presentation of the Financial Statements, approved by CVM Deliberation 595, of September 15, 2009: It sets forth the basis for presenting the financial statements, by determining the presentation overall requirements, structuring guidelines and the minimum content to be included in the financial statements. Two new requirements were added in relation to the previous practice; i) comprehensive statement of income; ii) presentation of three balance sheets in the situations in which the Company applies an accounting policy retroactively or files again items in its financial statements.

 

- CPC 27 – Fixed Assets, approved by CVM Deliberation 583 of July 31, 2009: The Company understands that this rule may cause eventual effects on its financial statements, mainly due to said CPC that requires deducting the estimated residual value from fixed assets in order to calculate depreciation. Currently, the Company depreciates assets by their whole formation cost, not deducting the estimated residual value. The Company is assessing the useful life taking into account the residual value of its assets and will apply this change of depreciation rate retrospectively as of January 1, 2010, in compliance with IPCP 10.

 

CPC 38, 39 and 40 Financial Instruments: Recognition and Measurement, Presentation, Reporting, approved by CVM Deliberation 604 of November 19, 2009:

 

- CPC 38 – Financial Instruments: Recognition and Measurement: It rules the recognition and measurement of financial instruments operations – including derivatives. It shall be applied to all companies and all types of financial instruments, aside from specific exceptions. A financial instrument is any agreement originating a financial asset for an entity and a financial liability or equity instrument for another.

 

CPC 39 – Financial Instruments: Presentation – it aims at establishing the principles for presenting the financial instruments as liability or shareholders’ equity and offsetting the financial assets and liabilities. It applies to the classification of financial instruments, under the issuer’s viewpoint, into financial assets, financial liabilities and equity instruments; the classification of corresponding interest, dividends, gains and losses; the circumstance in which the financial assets and liabilities shall be offset.

 

CPC 40 – Financial Instruments: Reporting – It introduces the need of detailed reporting on financial statements for the Company’s equity and financial situation and its performance.

 

CPC 41 – Earnings per Share approved by CVM Deliberation 636 of August 6, 2010: This Technical Pronouncement aims at establishing the principles to determine and report the earnings per share.

 

 

 

26


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

 

2.    Basis of preparation and presentation of quarterly information (Continued)

 

(b) Prior years reclassification:

Globex, as part of the harmonization of practices, criteria and accounting estimates identified in the second half of 2009, a difference in the understanding in the application of accounting standards attributable to prior years, which led to the result the year ended December 31, 2008 were restated.


The results for the period ended September 30, 2009 is being presented in these financial statements adjusted to reflect the review of criteria and allow comparability.The main impact was:

(I) The cost of logistics - reclassification of R $ 19,329 in consolidated;

The total effects on account of the adjustments mentioned above are shown below, as required by Resolution 564/2008 that approved the NPC No. 12 - Accounting Policies, Changes in Accounting Estimates and Errors (Correlation - IAS 8) "

 

Income Statement

 

Consolidated

 

30.09.2009

30.09.2009

 

 

(As presented)

(Restated)

Cost of Sales and/or Services Rendered

 

  (11.830.400)

            (11.849.729)

Selling expenses

 

  (2.488.553)

          (2.465.480)

Profit for the period

 

         397.633

              397.633

Earnings per share

 

1,56457

1,56457

 

3.    Summary of main accounting practices  

 

Accounting estimates to measure and recognize certain assets and liabilities are used in the preparation of the quarterly information of the Company and its subsidiaries. The determination of these estimates took into account experiences of past and current events and other objective and subjective factors. Complying with such, this quarterly information include estimates related to the selection of useful lives of fixed and intangible assets; the allowance for doubtful accounts; allowance for inventory losses; allowance for investments losses; the recoverability of fixed and intangible assets; the realization expectation of deferred income and social contribution taxes; fees and terms used when determining the present value adjustment of certain assets and liabilities and the provision for litigations; the benefit value granted through stock options and fair value of financial instruments; the reporting estimates for the sensitivity analysis chart of derivative financial instruments pursuant to CVM Ruling 475/08. The estimates used in this quarterly information may present variations compared to the actual values upon the realization and/or settlement of operations in which they are involved. The Company reviews its estimates and assumptions, at least, quarterly.

 

Significant accounting practices and consolidation criteria adopted by the Company are shown below:

 

27


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

3.    Summary of main accounting practices (Continued)

 

a)  Determination of income

   

Sales revenues are stated at their gross amounts. Taxes and discounts on sales revenues are presented as reducing accounts. The result of operations is determined according to the accrual basis of accounting. Revenues from sale of products are recognized upon the transfer of the product, with all risks and benefits to the purchaser. The freight value is included in the cost of goods sold. Interest income and expenses are recognized by the effective interest rate method under financial revenues/expenses.

 

The recording of present value adjustment expense, incurring on installment sales, has as corresponding credit the item “trade accounts receivable” and its reversals are recorded in a separate item, called “reversal of present value adjustment from sale of goods”.

 

b)  Translation of foreign currency-denominated balances

 

(i)     Functional and presentation currency of the quarterly information

 

The Company’s functional currency is the Brazilian Real. The quarterly information of each subsidiary, consolidated by Company, as well as those used as basis for investments valuation by the equity accounting method are prepared based on the functional currency of each entity.

 

(ii)    Foreign currency-denominated transactions

 

Monetary assets and liabilities indexed in foreign currency were translated into reais using the exchange rate effective on respective closing balance sheet date. The differences resulting from the currency translation are recorded as financial revenues or expenses in income.

 

c)  Financial instruments

 

The financial assets and liabilities held by the Company and its subsidiaries are recognized by their fair value upon their contracting, plus transaction costs directly related to their acquisition or issue. Financial instruments are classified according to the purpose to which they were acquired or issued under the following categories: (i) financial assets and liabilities measured at the fair value through income; and (ii) financial assets and liabilities held to maturity and (iii) loans and receivables. Their subsequent measurement occurs every balance sheet date according to the rules established for each type of classification of financial assets and liabilities.

 

·         Financial assets and liabilities measured at fair value through income: these are financial assets held for active and frequent trading. The derivatives are also classified in the held-for-trading category, unless if they had been accounted for as hedge accounting. The assets of this category are classified as current assets. The gains or losses deriving from changes in fair value are reported in the income statement under "Financial result" in the period these occur.

 

 

 

28


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

3.    Summary of main accounting practices (Continued)

 

·         Loans and receivables: This category includes the loans granted and receivables which are non-derivative financial assets with fixed or determinable payments, not quoted on an active market. They are included as current assets, except for those with maturity exceeding 12 months after the balance sheet dates (these are classified as non-current assets).The Company’s loans and receivables include the loans, trade accounts receivable, other accounts receivable and cash and cash equivalents. The loans and receivables are accounted by their amortized cost, using the effective interest rate method. The funding costs are mainly composed of brokers’ commission and IOF “Tax on Financial Operations”, and stated according to CPC 08.

 

·          Assets and liabilities held to maturity: these are financial assets that cannot be classified as loans and receivables, as they are quoted on an active market. In this case, these financial assets are acquired with the intention and financial capacity to be held in portfolio to maturity. These are valued by cost of acquisition, plus income earned against the net income for the period, using the effective interest rate method.

 

 

Derivative instruments designated as hedge accounting

 

c)  Financial instruments (Continued)

 

Firstly, the derivatives are recognized by their fair value on the date a derivatives agreement is executed and subsequently are measured again at their fair value. The method to recognize the resulting gain and loss depends whether the derivative is designated or not as hedge instrument: The method depends on the nature of the item that has been hedged. The Company may designate certain derivatives, such as:

 

·         Fair value hedge: the derivative financial instruments destined to mitigate the risks deriving from the exposure to the variation in fair value of hedged item shall be classified. The hedged items and related derivative financial instruments are expensed to the appropriate revenue or expense account, in the income statement.

 

Fair market value of financial instruments actively traded on organized markets is determined based on its market pricing calculated at the date of its respective balance sheet. If there is no market, then the fair value is determined through valuation techniques and compatible with usual practices on the market including the use of recent market arm’s length transactions, benchmark to the market value of similar financial instruments, analysis of discounted cash flows or other valuation models.

 

 

d)  Cash and cash equivalents

 

These include cash, positive balances in checking account and marketable securities redeemable within up to 90 days. Marketable securities included in cash and cash equivalents are classified into the “financial assets calculated at fair value through income” category.

 

 

 

29


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

3.    Summary of main accounting practices (Continued)

 

e)  Accounts receivable

           

Accounts receivable are stated considering the estimated realizable values. An allowance for doubtful accounts is provided in an amount considered by Management to be sufficient to meet probable losses in the realization of such receivables, considering the historic average of losses.

 

The Company’s installment sales occur with the intermediation of FIC, whose receivables do not remain in the Company (Note 10 b (vi)).

 

The Company carries out securitization operations of the accounts receivable through PAFIDC

 (Pão de Açúcar Fundo de Investimento em Direitos Creditórios) – (Note 8).

 

Accounts receivable from commercial agreements result from credits and discounts granted by suppliers, established by agreements and calculated over purchase volume, marketing initiatives, freight cost reimbursement, etc.

 

f)   Inventories

 

Inventories are stated at the average acquisition cost or market value, whichever is shorter, adjusted by provision for inventory bonuses for losses and breakage, which are periodically reviewed and evaluated as to their sufficiency. Warehousing and handling costs are appropriated according to inventory turnover and the portion not absorbed is stated at the inventories value. Provisions are recorded based on historical data of the Company.

 

g)  Investments

 

Investments in subsidiaries are accounted for by the equity method, and provision for capital deficiency has been recorded, when applicable. Other investments are recorded at acquisition cost.

 

h)  Property and equipment

 

These assets are recorded at acquisition or construction cost (monetarily restated until December 31, 1995) deducted from the related accumulated depreciation, calculated on a straight-line basis at the rates mentioned in Note 11. In leasehold improvements, amortization is calculated considering the shortest term between the term of the lease agreement or assets useful life is utilized.

 

The Company adopts procedures aiming at ensuring that assets are not recorded by a value higher than the one that can be recoverable for use or sale, pursuant to CPC 01 rules.

 

Interest and financial charges on loans and financing contracted by third parties directly or indirectly attributable to the process of purchase, construction and/or operating expansion, are capitalized during the construction and refurbishment of the Company’s and its subsidiaries’ stores in conformity with CVM Deliberation 193. The capitalized interest and financial charges are appropriated to income over the depreciation periods of the corresponding assets.

 

 

30


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

3.    Summary of main accounting practices (Continued)

 

Expenditures for repairs and maintenance are recorded as expenses when they do not significantly affect the useful lives of related assets; or they do not aggregate to the value of assets when they materially contribute to the increase of useful lives of existing facilities and equipment.

 

i)   Leasing

 

Financial leasing agreements are recorded in property and equipment against liabilities from loans and financing, by the lower amount between the present value of mandatory minimum installments of the agreement or the fair value of asset, accrued, where applicable of initial direct costs incurred on transaction. Implied interest rates recognized in loans and financing are appropriated to income for the year according to the duration of the agreement by the effective interest rate method.

 

Operating leasing agreements are recognized as expense based on the determination period of the benefit over leased asset by the Company, regardless of the basis used to determine leasing payments.

 

The depreciation of capitalized assets is calculated according to their useful life, in the event there is the intention to acquire such asset. If the Company does not intend to acquire the asset, the depreciation is calculated considering the least term between the effectiveness of the agreement or the assets’ useful life.

 

j)   Intangible assets

 

Goodwill calculated in the acquisition of investments occurred until December 31, 2008, having future profitability as economic fundamental, was amortized on a straight-line basis for a term of 5 to 10 years until that date. As of January 1, 2009 goodwill balances are submitted to an annual test for impairment analysis, as set forth by CPC 01.

 

Intangible assets with defined useful life term are amortized according to such term and when sign of any impairment signs is verified these assets are submitted to impairment tests. Intangible assets with indeterminate useful life are not amortized, they are submitted to annual test for impairment analysis.

 

k)  Provision for recovery of assets

 

The Management yearly reviews the net book value of assets with a view to identifying events or changes in economic, operating or technological circumstances that may indicate deterioration, obsolescence or impairment. When this evidence is identified and the net book value exceeds the recoverable value, a provision is recorded for impairment by adjusting the net book value to the recoverable value. These losses are classified as other operating expenses.

 

l)   Other assets and liabilities

 

A liability is recognized in the balance sheet when the Company and its subsidiaries have a legal liability as a result of a past event and it is probable that an economic resource will be required to settle this liability. Provisions are recorded based on the best estimates of risks involved.

31


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

3.         Summary of main accounting practices (Continued)

 

An asset is recognized in the balance sheet when it is probable that its future economic benefits will be advantageous for the Company and its cost or value can be safely measured. Assets and liabilities are classified as current when their realization or settlement is probable to occur over the next 12 months, otherwise, these are stated as noncurrent.

 

m) Taxation

 

Revenues from sales of goods and rendering of services are subject to taxation by State Value-Added Tax (“ICMS”), Services Tax (“ISS”), Social Contribution Tax on Gross Revenue for Social Integration Program (“PIS”) and Social Contribution Tax on Gross Revenue for Social Security Financing (“COFINS”) at rates prevailing in each region, and its respective value deducted from the total revenues from sales for the purposes of determining income.

 

The credits derived from non-cumulative PIS and COFINS are deducted from cost of goods sold for presentation of statement of income for the year.

 

PIS and COFINS refer to the financial revenues and expenses recorded in the corresponding items.

 

The advances or amounts subject to offsetting are shown in the current and noncurrent assets, in accordance with the estimate for their realization.

 

Income and social contribution taxes are calculated according to the taxable income based on accounting records and are classified as current or deferred, as follows:

 

Current – Income and social contribution taxes in Brazil, when opted for the taxable income regime, are calculated at the (i) 25% taxable income (15% increased by 10% surcharge on taxable income exceeding R$240) for income tax, and (ii) 9% on taxable income for social contribution. Brazilian tax laws in force allows to carry forward tax losses referring to previous years with current tax income, limited to 30% of the taxable income of each year.

 

Deferred – Deferred income and social contribution taxes are calculated based on tax losses and negative basis of social contribution, as well as temporary differences mainly composed of provisions related to the recording of litigations that are not deductible for calculation purposes of taxable income and calculation basis of social contribution only on the date of its financial realization.

 

Deferred income and social contribution tax assets were recorded pursuant to CVM Ruling 371/02 and take into account the expectation of generating future taxable income, based on a technical feasibility study approved by the Board of Directors.

 

n)  Share-based compensation

 

Part of the compensation of the Company’s main executives and managers is paid as stock option plan, measured by their fair value, calculated on the plan granting date, based on the market’s pricing models, considering the share market value, the stock option exercise price and term of the agreement. Compensation costs linked to these programs are recorded on a straight-line basis in income, under operating expenses, during the period the services were rendered by beneficiaries against the capital reserve.

 

32


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

3.         Summary of main accounting practices (Continued)

 

o)  Present value adjustment of assets and liabilities

 

Noncurrent monetary assets and liabilities and current assets and liabilities, when relevant, are adjusted to their present value. The present value adjustment is calculated taking into account contractual cash flows and the respective explicit or implied interest rates.

 

Embedded interest rates on revenues, expenses and costs associated with said assets and liabilities are adjusted to the appropriate recognition in conformity with the accrual basis of accounting. The present value adjustment is recorded in those items, subject to the application of rule and “financial result” as corresponding entry.

 

p)  Provision for litigations

 

As per CVM Deliberation 489/05, the Company adopts the concepts established in NPC 22 on Provisions, Liabilities, Contingent Assets and Liabilities when setting up its provisions and disclosure on matters regarding litigations and lawsuits. The balances of provisions are stated net of the respective judicial deposits, where applicable (Note 16).

 

Provisions for lawsuits are recorded as it follows:

 

·       Contingent assets: it is an asset that likely will result from past events and whose existence is only confirmed by the occurrence or not of one or more uncertain future events not fully under the entity’s control. The Company reports in its notes when the contingent assets are probable and records them in the quarterly information only when they become final and unappealable.

 

·       Contingent liabilities: likely liability that results from past events and whose existence shall only be confirmed by the occurrence or not of one or more uncertain future events not fully under the Company’s control. (i) When contingent liabilities are probable, the Company records liabilities in its financial statements; (ii) concerning contingent liabilities deemed as possible, these are only reported in the notes to the quarterly information and concerning contingent liabilities deemed as remote, these are neither recorded nor reported.

 

q)  Earnings/Losses per share

 

The calculation is made according to the "net income/number of outstanding shares” ratio on the balance sheet date. Pursuant to the Brazilian Corporation Law, earnings may be: distributed, used to increase capital or create the profit expansion reserve, based on the capital budget.

 

 

 

33


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

 

3.         Summary of main accounting practices (Continued)

 

 

r)   Consolidated quarterly information

 

The consolidated financial statements are prepared and presented in conformity with the consolidation principles prescribed by the Brazilian Corporation Law and CVM Ruling 247/96, and include the quarterly information of the Company and its subsidiaries Novasoc Comercial Ltda. (“Novasoc”), Sé Supermercados Ltda. (“Sé”), Sendas Distribuidora, PAFIDC, PA Publicidade Ltda. (“PA Publicidade”), Barcelona, CBD Panamá Trading Corp. (“CBD Panamá”), CBD Holland B.V. (“CBD Holland”) and Xantocarpa, Vedra Empreendimentos e Participações S.A. (“Vedra”), Bellamar Empreendimentos e Participações Ltda. (“Bellamar”), Vancouver Empreendimentos e Participações Ltda. (“Vancouver”), FIC, Lake Niassa Empreendimentos e Participações Ltda. (“Lake Niassa”), Globex, Globex Administração e Serviços Ltda., Ponto Frio Administração e Importação de Bens Ltda. (“Ponto Frio Adm.”), Rio Expresso Comércio Atacadista de Eletrodomésticos Ltda (“Atacadista Eletro”), Globex Administração de Consórcios Ltda., Bruxellas Empreend. Participações S.A. (“Bruxellas”), Dallas Empreend. e Participações S/A (“Dallas”); Pontocred Negócios de Varejo Ltda (“Pontocred”); Nova Extra Eletro Comercial Ltda. (“Nova Extra Eletro”), E-HUB Consult. Particip. e Comércio S.A.(“E-HUB”); Banco Investcred Unibanco S.A (“Banco Investcred”); and Sabara S.A. (“Sabara”).

 

The direct or indirect subsidiaries, included in the consolidation and the percentage of parent company’s interest comprise:

34


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

3.         Summary of main accounting practices          (Continued)

 

 

 

Interest of Investors (%) – at September 30, 2010

 

 

 

 

CBD

Sendas

 

Lake

Globex

Ponto Frio

Investees

GPA

Novasoc

Holland

Distrib.

Bellamar

Niassa

Utilidades

Adm

 

 

 

 

 

 

 

 

 

 

Novasoc

10.00

-

-

-

-

-

-

-

-

93.10

6.90

-

-

-

-

-

-

-

Sendas Distribuidora

14.86

-

42.57

-

-

-

-

-

-

PAFIDC

9.01

0.70

0.35

-

-

-

-

-

-

P.A. Publicidade

99.99

-

-

-

-

-

-

-

-

Barcelona

-

-

100.00

-

-

-

-

-

-

CBD Holland

100.00

-

-

-

-

-

-

-

-

CBD Panamá

-

-

-

100.00

-

-

-

-

-

Xantocarpa

-

-

-

-

100.00

-

-

-

-

Vedra

99.99

-

-

-

-

-

-

-

-

Bellamar

-

-

100.00

-

-

-

-

-

-

Vancouver

100.00

-

-

-

-

-

-

-

-

Dallas

99.99

-

-

-

-

-

-

-

-

Bruxellas

99.99

-

-

-

-

-

-

-

-

FIC

-

-

-

-

-

35.76

14.24

-

-

Lake Niassa

-

-

-

-

-

-

-

99.99

-

Globex

98.77

-

-

-

-

-

-

-

-

Globex Adm. e Serviços Ltda.

-

-

-

-

-

-

-

99.99

-

Ponto Frio Adm

-

-

-

-

-

-

-

99.99

-

Atacadista Eletro

-

-

-

-

-

-

-

100.00

-

Globex Adm. de consórcio Ltda.

-

-

-

-

-

-

-

99.99

-

Pontocred Negócios de varejo Ltda.

-

-

-

-

-

-

-

99.50

0.50

Nova Extra Eletro

0.1

-

-

-

-

-

-

99.90

-

Banco Investcred

-

-

-

-

-

-

50.00

-

-

Sabara

-

-

-

-

-

-

-

100.00

-

 

35


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

3.         Summary of main accounting practices          (Continued)

 

 

 

Interest of Investors (%) – at June 30, 2010

 

 

 

 

CBD

Sendas

 

Lake

Globex

 

Investees

GPA

Novasoc

Holland

Distrib.

Bellamar

Niassa

Utilidades

Pontocred

 

 

 

 

 

 

 

 

 

 

Novasoc

10.00

-

-

-

-

-

-

-

-

93.10

6.90

-

-

-

-

-

-

-

Sendas Distribuidora

14.86

-

42.57

-

-

-

-

-

-

PAFIDC

9.05

0.71

0.35

-

-

-

-

-

-

P.A. Publicidade

99.99

-

-

-

-

-

-

-

-

Barcelona

-

-

100.00

-

-

-

-

-

-

CBD Holland

100.00

-

-

-

-

-

-

-

-

CBD Panamá

-

-

-

100.00

-

-

-

-

-

Xantocarpa

-

-

-

-

100.00

-

-

-

-

Vedra

90.00

-

-

-

-

-

-

-

-

Bellamar

-

-

100.00

-

-

-

-

-

-

Vancouver

100.00

-

-

-

-

-

-

-

-

Dallas

99.99

-

-

-

-

-

-

-

-

Bruxellas

99.99

-

-

-

-

-

-

-

-

FIC

-

-

-

-

-

35.76

14.24

-

-

Lake Niassa

-

-

-

-

-

-

-

99.99

-

Globex

98.77

-

-

-

-

-

-

-

-

Globex Adm. e Serviços Ltda.

-

-

-

-

-

-

-

99.99

-

Ponto Frio Adm.

-

-

-

-

-

-

-

99.99

-

Globex Factoring Comercial Ltda.

-

-

-

-

-

-

-

99.99

-

Globex Adm. de consórcio Ltda.

-

-

-

-

-

-

-

99.99

-

Pontocred Negócios de varejo Ltda.

-

-

-

-

-

-

-

99.50

-

PF.com

-

-

-

-

-

-

-

99.95

0.05

E-HUB

-

-

-

-

-

-

-

45.00

-

Banco Investcred

-

-

-

-

-

-

50.00

-

-

Sabara

-

-

-

-

-

-

-

100.00

-

 

 

 

 

 

36


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

3.    Summary of main accounting practices (Continued)

 

r)   Consolidated quarterly information (Continued)

 

 

Despite the fact that the Company holds interest in Novasoc that only represents 10% of its capital stock, Novasoc is effectively controlled by the Company by means of a Quotaholders Agreement, with a 99.98% interest in its income.

 

Sendas Distribuidora is fully consolidated based on the Shareholders’ Agreement signed, which establishes that the operating and administrative management is exclusively conducted by the Company.

 

The following eliminations occurred during the consolidation process:

 

­  the balances of assets and liabilities accounts among consolidated companies;

­  the interest in the capital, reserves and accumulated earnings of subsidiaries; and

­  revenues and expenses balances and the unrealized profit originated in transactions between the consolidated companies.

 

Pursuant to CVM Ruling 408/04, the Company, since the first quarter of 2005, consolidates the PAFIDC quarterly information, as it represents a special purpose entity, organized with exclusive purpose of conducting the securitization of receivables of the Company and its subsidiaries, once the Company is exposed to most of risks and benefits related to the ownership of PAFIDC subordinated quotas.

 

The Company’s indirect investment in FIC, by means of Bellamar (35.76%) and Lake Niassa (14.24%), was valued by the equity accounting method. Pursuant to the official memorandum CVM/SNC 006/10, FIC’s quarterly information is consolidated by Itaú, since the bank is responsible for the company’s operating management.

 

The quarterly information of FIC and Investcred were audited by other independent auditors.

 

In relation to FIC, in the period ended September 30, 2010, total investments and equity in the earnings of this investee accounted for 0.9% and 8.7%, respectively, in relation to assets and results reported in the Company’s consolidated quarterly information.

 

In relation to Investcred in the period ended September 30, 2010, total investments and equity in the earnings of subsidiaries and associated companies of this investee accounted for 0.1% and 0.3% respectively, in relation to the Company’s consolidated quarterly information.

37


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

 

4.    Marketable Securities

                                                 

The marketable securities at September 30, 2010 earn interest mainly at the Interbank Deposit Certificate (“CDI”) rate, classified as described in Note 3(c).

 

 

Parent Company

 

Consolidated

 

CDI*

9.30.2010

 

6.30.2010

 

CDI*

9.30.2010

 

6.30.2010

Current

 

 

 

 

 

 

 

 

 

Financial investments

 

 

 

 

 

 

 

 

 

Banco do Brasil

100.2%

545,534

 

377,069

 

100,2%

684,057

 

466,108

Itaú

100.4%

262,703

 

316,319

 

100,5%

473,476

 

420,669

Bradesco

102.1%

378,136

 

341,977

 

101,9%

481,162

 

401,997

Votorantim

101.1%

72,426

 

91,696

 

101,1%

78,087

 

96,825

Santander

101.0%

55,105

 

53,689

 

101,0%

71,332

 

69,499

ABN AMRO

104.0%

25,523

 

24,848

 

104,0%

25,991

 

25,375

Safra

101.5%

20,972

 

22,214

 

101,5%

22,418

 

23,622

Unibanco

104.1%

4,803

 

4,676

 

101,1%

18,397

 

19,177

CEF

98.0%

2,603

 

2,538

 

98,0%

2,603

 

2,538

Alfa

-

-

 

-

 

101,5%

1

 

1,011

Other

100.0%

509

 

6,756

 

100,0%

4,824

 

14,841

Total current

 

1,368,314

 

1,241,782

 

 

1,862,348

 

1,541,662

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-current

 

 

 

 

 

 

 

 

 

PAFIDC receivables securitization fund (Note 8)

 

116,067

 

113,484

 

 

-

 

-

 

 

 

 

 

 

 

 

 

 

Total non-current

 

116,067

 

113,484

 

 

-

 

-

 

 

 

 

 

 

 

 

 

 

Overall Total

 

1,484,381

 

1,355,266

 

 

1,862,348

 

1,541,662

(*) Weighted average rate

 

 

 

 

 

 

 

 

 

 

 

5.    Trade Accounts Receivable

 

 

Parent Company

 

Consolidated

 

9.30.2010

 

6.30.2010

 

9.30.2010

 

6.30.2010

Current

 

 

 

 

 

 

 

Resulting from sales through:

 

 

 

 

 

 

 

Credit card companies

273,686

 

371,474

 

354,891

 

669,580

Sales vouchers and others

46,995

 

61,906

 

127,841

 

116,195

Credit sales with post-dated checks

2,171

 

2,542

 

6,532

 

7,192

  Consumer financing – direct credit

-

 

-

 

9,324

 

9,829

  Trade bills receivable from wholesale customers

-

 

-

 

72,210

 

52,632

  Own credit card – interest-free installment

12,332

 

11,944

 

19,077

 

17,390

Accounts receivable from subsidiaries

133,946

 

127,644

 

-

 

-

Allowance for doubtful accounts

(4,843)

 

(5,098)

 

(19,812)

 

(17,815)

Present value adjustment

-

 

-

 

(13,699)

 

(27,068)

Resulting from commercial agreements

289,456

 

164,190

 

407,045

 

255,360

 

753,743

 

734,602

 

963,409

 

1,083,295

 

 

 

 

 

 

 

 

Accounts receivable  - PAFIDC

-

 

-

 

1,160,913

 

1,151,649

 

 

 

 

 

 

 

 

Total current

753,743

 

734,602

 

2,124,322

 

2,234,944

 

 

 

 

 

 

 

 

Non-current

 

 

 

 

 

 

 

Accounts receivable - Paes Mendonça

-

 

-

 

407,197

 

398,821

Other accounts receivable

32,943

 

33,588

 

61,672

 

43,706

Total non-current

32,943

 

33,588

 

468,869

 

442,527

 

38


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

 

5.    Trade Accounts Receivable (Continued)

 

a) Credit Card Management Companies

 

Credit card operations are considered receivable in cash, except electronic devices, which may be paid in up to 18 monthly installments, and are managed by third parties.

 

b)  Consumer financing

 

The balance of “Accounts Receivable from Customer Financing – consumer direct credit” includes accounts receivable from Globex’s customers financing activity.

 

c)  Trade accounts receivable from Subsidiaries

 

The balance of “Trade Accounts Receivable from Subsidiaries” reflects selling operations carried out by the Company and its subsidiaries at cost to supply their stores.

 

d)  Allowance for doubtful accounts

 

The allowance for doubtful accounts is recorded according to the Management's analysis, considering the historic average of effective losses:

 

 

Parent Company

 

Consolidated

Balance at June 30, 2010

(5,098)

 

(17,815)

 Additions

(1,935)

 

(8,751)

Write-offs

2,190

 

6,754

Balance at September 30, 2010

(4,843)

 

(19,812)

 

 

e)  Accounts receivable from Commercial Agreements

 

The balance of accounts receivable from Commercial Agreements comprise current transactions between the Company and its suppliers, mainly based on the volume of purchases.

 

f)    Present value adjustment

 

The discount rate used by Globex and its subsidiaries take into consideration current market valuations as to the value of cash over time and asset specific risks. Installment sale operations with the same cash value were carried to their present value on the date of transaction, in view of their terms, and adopting the monthly average rate of operations that anticipate receivables with credit card management companies, during the period ended September 30, 2010, varying from 0.66% and 1.05% (0.79% to 1.17% at June 30, 2010).

 

g) Accounts receivable – Paes Mendonça

 

The “Accounts Receivable – Paes Mendonça” account balance comprises credits deriving from the payment of liabilities performed by the subsidiaries Novasoc and Sendas. Pursuant to contractual provisions, these accounts receivable are monetarily restated and guaranteed by commercial rights of certain stores operated by Novasoc and Sendas (Note 10 (b) (i)).

 

39


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

6.    Inventories

 

 

Parent Company

 

Consolidated

 

9.30.2010

 

6.30.2010

 

9.30.2010

 

6.30.2010

 

 

 

 

 

 

 

 

Stores

947,578

 

904,015

 

1,897,704

 

1,815,757

Warehouses

636,032

 

583,281

 

1,196,147

 

1,086,476

Provisions on inventories

(37,146)

 

(36,437)

 

(75,276)

 

(84,366)

Present value adjustment on inventories

-

 

-

 

(2,297)

 

(1,801)

 

 

 

 

 

 

 

 

 

1,546,464

 

1,450,859

 

3,016,278

 

2,816,066

The provisions for inventories are comprised by unrealized bonuses and breakage provisions, which are recorded based on the Company’s historical data.

 

7.    Recoverable taxes

 

These mainly refer to credits from recoverable Withholding Income Tax, (“IRRF”), Social Contribution Tax on Gross Revenue for Social Integration Program (“PIS”), Social Contribution Tax on Gross Revenue for Social Security Financing (“COFINS”) and State Value-Added Tax (“ICMS”):

 

 

Parent Company

 

Consolidated

 

9.30.2010

 

6.30.2010

 

9.30.2010

 

6.30.2010

Current

 

 

 

 

 

 

 

Taxes on sales

261,590

 

219,069

 

586,851

 

506,494

Income tax and others

92,225

 

146,931

 

141,060

 

198,987

Present value adjustment

(301)

 

(318)

 

(349)

 

(369)

 

353,514

 

365,682

 

727,562

 

705,112

Non-current

 

 

 

 

 

 

 

Taxes on sales

112,616

 

98,086

 

198,336

 

181,055

ICMS and others

13,617

 

13,848

 

16,644

 

16,771

Present value adjustments

(5,113)

 

(5,402)

 

(6,185)

 

(6,273)

 

121,120

 

106,532

 

208,795

 

191,553

Total recoverable taxes

474,634

 

472,214

 

936,357

 

896,665

 

  8. Pão de Açúcar Receivables Securitization Fund – PAFIDC

 

PAFIDC is receivables securitization fund formed in compliance with CVM Rulings 356/01 and 393/03 for the specific purpose of acquiring receivables of the Company and its subsidiaries arising from sales of products and services by the Company and/or its subsidiaries, except for receivables deriving from installment system and post-dated checks. PAFIDC shall be effective until December 7, 2012.

 

The capital structure of the fund, at September 30, 2010, is broken down in: 10,295 senior quotas in the amount of R$1,158,923, representing 89.94% of the fund’s equity (89.89% at June 30, 2010) owned by third parties; and 2,864 subordinated quotas in the amount of R$129,647, representing 10.06% of the fund’s equity (10.11% at June 30, 2010) owned by the Company and its subsidiaries.

 

The Company carries out securitization operations of its receivables, represented by credit sales with tickets and credit card company receivables, with PAFIDC. The volume of operations stood at R$2,463,500 in the quarter ended September 30, 2010 (R$2,448,552 at June 30, 2010), in which the responsibility for services rendered and subordinated interests was retained. The consolidated securitization costs of such receivables amounted to R$87,015 (R$82,820 at September 30, 2009), recognized as financial expenses in income for 2010 and 2009, respectively.

40


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

8.    Pão de Açúcar Receivables Securitization Fund – PAFIDC (Continued)

 

Services rendered, which are not remunerated, include credit analysis and the assistance by the collection department to the fund’s manager.

 

The outstanding balances of these receivables at September 30, 2010 and June 30, 2010 were R$1,160,913 and R$1,151,649, respectively, net of allowance for losses.

 

The condensed balance sheet of PAFIDC is summarized as follows:

 

 

9.30.2010

 

6.30.2010

Assets

 

 

 

Cash and cash equivalents

106,734

 

113,787

Accounts receivable

1,160,913

 

1,151,649

Other amounts

22,087

 

-

Total assets

1,289,734

 

1,265,436

 

 

 

 

Liabilities

 

Accounts payable

1,164

 

11,998

Shareholders’ equity

1,288,570

 

1,253,438

Total liabilities

1,289,734

 

1,265,436

 

 

The subordinated quotas were attributed to the Company and are recorded in the noncurrent assets as participation in the securitization fund, the balance of which at September 30, 2010 was R$116,067 (R$113,484 at June 30, 2010). Other subordinated quotas are attributed to Novasoc and Sé, amounting to R$129,647.

 

The senior quotas interest yield is shown below:

 

 

 

 

9.30.2010

 

6.30.2010

Quotaholders

Amount

 

CDI Rate

 

Redeemable balance

 

CDI Rate

 

Redeemable balance

 

 

 

 

 

 

 

 

 

 

Senior A

5,826

 

109.5%

 

747,208

 

109.5%

 

726,416

Senior B

4,300

 

109.5%

 

179,108

 

109.5%

 

174,125

Senior C

169

 

109.5%

 

232,607

 

109.5%

 

226,134

 

 

 

 

 

1,158,923

 

 

 

1,126,675

 

Single series subordinated quotas are non-transferable and only can be amortized or redeemed after the amortization and redemption of senior quotas. The effects deriving from the default of any receivable acquired by the Fund, as well as any loss suffered by the Fund shall be attributed to the subordinated quotas until the limit of their value.

 

Pursuant to the Receivables Assignment Agreement entered into between the Company, its subsidiaries and PAFIDC, the assignment of receivables is irrevocable and irreversible, with the definitive transfer of receivables to the Fund, together with all rights, privileges, guarantees, preferences, prerogatives and actions related thereto and without right of recourse against the Company and its subsidiaries.

 

41


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

9.    Balances and Transactions with Related Parties

 

The transactions with related parties, as presented below, are carried out at cost prices.

 

a)   Sales and Purchases of Goods

 

 

Parent Company

 

Consolidated

 

9.30.2010

 

6.30.2010

 

9.30.2010

 

6.30.2010

Customers:

 

 

 

 

 

 

 

Novasoc Comercial

29,651

 

27,343

 

-

 

-

Sé Supermercados

69,775

 

67,939

 

-

 

-

Sendas Distribuidora

31,410

 

24,784

 

-

 

-

 Barcelona

1,436

 

3,080

 

-

 

-

    Xantocarpa

1

 

7

 

-

 

-

    Globex

12

 

 

 

2,146

 

 

    Ponto Frio.com

1,662

 

4,492

 

1,662

 

-

Total assets

133,947

 

127,645

 

3,808

 

-

 

 

Parent Company

 

Consolidated

 

9.30.2010

 

6.30.2010

 

9.30.2010

 

6.30.2010

Suppliers:

 

 

 

 

 

 

 

Novasoc Comercial

1,668

 

1,434

 

-

 

-

Sé Supermercados

3,044

 

4,304

 

-

 

-

Sendas Distribuidora

3,925

 

5,075

 

-

 

-

Barcelona

721

 

517

 

-

 

-

Xantocarpa

167

 

133

 

-

 

-

    Globex

43

 

21

 

43

 

-

    Ponto Frio.com

125

 

370

 

125

 

-

Total liabilities

9,693

 

11,854

 

            168

 

            -

 

 

Parent Company

 

Consolidated

 

9.30.2010

 

9.30.2009

 

9.30.2010

 

9.30.2009

 

 

 

 

Sales:

 

 

 

 

 

 

 

Novasoc Comercial

220,731

 

195,757

 

-

 

-

Sé Supermercados

578,946

 

527,292

 

-

 

-

Sendas Distribuidora

188,145

 

168,207

 

-

 

-

Barcelona

14,402

 

7,891

 

-

 

-

    Globex

873

 

-

 

-

 

-

    Ponto Frio.com

58,824

 

-

 

-

 

-

 

1,061,921

 

899,147

 

-

 

-

Purchases:

 

 

 

 

 

 

 

Novasoc Comercial

1,767

 

1,768

 

-

 

-

Sé Supermercados

8,520

 

9,248

 

-

 

-

Sendas Distribuidora

7,260

 

14,004

 

-

 

-

    Grupo Assai

(1,464)

 

-

 

                -

 

                -

    Ponto Frio.com

20

 

-

 

-

 

-

 

16,103

 

25,020

 

                -

 

                -

 

 

 

42


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

9.    Balances and Transactions with Related Parties (Continued)

 

b)  Other operations

 

 

Parent Company

Consolidated

 

9.30.2010

6.30.2010

9.30.2010

6.30.2010

 

 

 

 

 

Assets

 

 

 

 

Novasoc Comercial

26,754

23,053

-

-

Sé Supermercados

240,098

232,417

-

-

Casino

1,642

1,962

1,642

1,962

FIC

9,138

14,929

36,733

42,696

   Pão de Açúcar Ind. e Comércio

1,171

1,171

1,171

1,171

 Sendas S.A.

17,824

17,824

217,824

217,824

 Sendas Distribuidora

488,838

436,753

-

-

  Xantocarpa

2,460

2,660

-

-

Barcelona

85,578

27,090

-

-

Vedra

20

20

-

-

Globex

88,680

49,287

-

-

Ponto Frio.com

18,891

3,322

-

-

Vancouver

1,316

1,267

-

 

  Other

21,304

21,354

31,967

30,960

 

1,003,714

833,109

289,337

294,613

 

 

 

 

 

 

 

Parent Company

Consolidated

 

9.30.2010

6.30.2010

9.30.2010

6.30.2010

 

 

 

 

 

Liabilities

 

 

 

 

Fundo Península

10,689

10,678

11,034

11,027

Globex

-

85,139

-

-

Financeira Itaú CBD S.A

-

-

25,994

22,214

Casas Bahia Comercial Ltda

-

-

54,370

-

Other

6,179

6,010

2,935

3,651

 

16,868

101,827

94,333

36,892

 

 

Parent Company

 

Consolidated

 

9.30.2010

 

9.30.2009

 

9.30.2010

 

9.30.2009

 

 

 

 

 

 

 

 

Income

 

 

 

 

 

 

 

Novasoc Comercial

6,163

 

5,194

 

-

 

-

Sé Supermercados

16,070

 

12,897

 

-

 

-

Sendas Distribuidora

26,846

 

29,040

 

-

 

-

Casino

(3,967)

 

(4,714)

 

(3,967)

 

(4,714)

  Fundo Península

(101,430)

 

(93,835)

 

(104,601)

 

(97,183)

Grupo Diniz

(9,595)

 

(9,167)

 

(6,346)

 

(9,923)

Sendas S.A.

(27,288)

 

-

 

(41,754)

 

(9,003)

  Grupo Assai

-

 

-

 

-

 

(2,026)

Galeazzi e Associados

-

 

(3,926)

 

-

 

(4,616)

  FIC/ Banco Investcred

(6,045)

 

-

 

(5,707)

 

1,683

  Other

(6,299)

 

(9,832)

 

(6,299)

 

(9,832)

 

(105,545)

 

(74,343)

 

(168,674)

 

(135,614)

 

 

 

 

 

 

 

 

 

 

Novasoc, Sé Supermercados and Sendas Distribuidora: comprise (i) the values resulting from the utilization of shared services center, such as treasury, accounting, legal department and others; and (ii) values deriving from the leasing agreement entered into by the Company and Sendas Distribuidora related to 8 properties located in the State of Rio de Janeiro.

43


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

9.    Balances and Transactions with Related Parties (Continued)

 

b)  Other operations (Continued)

 

Casino: it includes (i) R$346 of amounts payable pursuant to the Technical Assistance Agreement, signed between the Company and Casino Group at July 21, 2005 and ratified by the Special Shareholders’ Meeting held at August 16, 2005, which regulates the transfer of knowledge in the administrative and financial areas of Casino Group to the Company and its subsidiaries. The annual amount of this agreement is US$2.7 million and is effective for 7 years, with automatic renewal for an indeterminate term; and (ii) R$1,988 of the Company’s amounts receivable are from French expatriate employees expenses and other.

 

Fundo Península: investment fund which has as beneficiaries members of the Diniz family and comprises the amounts paid by the leasing of Fundo Península’s properties, as per the Leasing Agreement entered into the Company, its subsidiaries and Fundo Península, under market conditions, and this was approved at the Special Shareholders’ Meeting held at June 22, 2005.

 

Diniz Group: it includes the amounts paid for the leasing of properties owned by members of the Diniz family, pursuant to the lease agreement executed between the Company and its subsidiaries and members of the Diniz family, under market conditions.

 

Sendas S.A.: it includes the amounts paid by Sendas S.A. to Sendas Distribuidora for the leasing of 57 properties.

 

Galeazzi e Associados: these include the amounts paid for consulting services related to the management of operations in the State of Rio de Janeiro (Sendas Distribuidora) and in the Northeast (CBD), and the process of merging operations between the Company and Globex.

 

Globex: the Company during the period ended September 30, 2010 engaged services companies and incurred in personnel expenses to consolidate and support Globex Utilidades S.A.’s operations, after its acquisition, thus, the parent company included a right with subsidiary in its related parties balance of R$5,127. The Company also has a right of loan agreement, which is adjusted by CDI rate of 105.46%, in the amount of R$170,385 and a loan agreement obligation of (R$86,832).

 

The Company recorded an account payable referring to the “First Addendum to the Partnership Agreement” executed between Globex, GPA and Casas Bahia, which ensures Globex the right of being indemnified by GPA related to certain recognized contingencies to be owed by Globex as of June 30,2010.

 

BFIC/Banco Investcred: results are mainly represented by (i) refund of expenses, including  expenses related to payroll, commissions on the sale of financial products and other expenses pursuant to the infrastructure agreement (ii) financial expenses resulting from receivables discount (named “financial rebate”); and (iii) revenues from property rental.

 

 

44


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

10.   Investments

a)  Information on investments at September 30, 2010 and June 30, 2010

 

 

                 Quarter ended 9.30.2010

 

Shares/

 

Interest in

 

 

 

Shareholders’ Equity

 

Net income/

 

Quotas

 

the capital

 

Capital

 

(capital

 

Loss for

 

held

 

stock - %

 

stock

 

deficiency)

 

The quarter

Novasoc

1,000

 

10.00

 

10

 

5,993

 

17,976

1,444,656,368

 

100.00

 

1,444,656

 

1,665,996

 

64,239

Sendas Distribuidora

607,083,796

 

57.43

 

835,677

 

(66,093)

 

(66,224)

Pa Publicidade

99,999

 

99.99

 

100

 

3,414

 

(1)

                                   Barcelona

15,010,000

 

100.00

 

24,520

 

142,933

 

16,147

CBD Panamá

1,500

 

100.00

 

4

 

5,008

 

3,846

CBD Holland B.V.

180

 

100.00

 

0

 

348

 

0

Xantocarpa

28,671,514

 

100.00

 

28,672

 

4,063

 

(6,331)

Vedra

9,999

 

99.99

 

10

 

(15)

 

0

Bellamar

138,564,578

 

100.00

 

138,565

 

171,536

 

27,058

Vancouver

12,009,990

 

100.00

 

10

 

671

 

661

Dallas

9,999

 

99.99

 

1

 

1

 

0

Bruxelas

9,999

 

99.99

 

1

 

(1)

 

0

Globex

122,286,848

 

98.77

 

671,033

 

652,203

 

13,991

 

 

 

 

 

 

 

 

 

 

 

 

                 Quarter ended 6.30.2010

 

Shares/

 

Interest in

 

 

 

Shareholders’ Equity

 

Net income/

 

Quotas

 

the capital

 

Capital

 

(capital

 

Loss for

 

held

 

stock - %

 

stock

 

deficiency)

 

The quarter

Novasoc

1,000

 

10.00

 

10

 

(2,029)

 

9,954

1,444,656,368

 

100.00

 

1,444,656

 

1,641,835

 

40,078

Sendas Distribuidora

607,083,796

 

57.43

 

835,677

 

(50,939)

 

(51,070)

Pa Publicidade

99,999

 

99.99

 

100

 

3,400

 

(16)

                                   Barcelona

15,010,000

 

100.00

 

24,520

 

138,982

 

12,196

CBD Panamá

1,500

 

100.00

 

4

 

3,559

 

2,397

CBD Holland B.V.

180

 

100.00

 

0

 

348

 

-

Xantocarpa

28,671,514

 

100.00

 

28,672

 

4,218

 

(6,176)

Vedra

9,000

 

90.00

 

10

 

(15)

 

-

Bellamar

138,564,578

 

100.00

 

138,565

 

162,075

 

17,597

Vancouver

12,009,990

 

100.00

 

10

 

(459)

 

(469)

Dallas

9,999

 

99.99

 

1

 

1

 

0

Bruxelas

9,999

 

99.99

 

1

 

1

 

0

Globex

122,863,716

 

98.77

 

671,033

 

676,557

 

32,292

 

 

 

 

 

 

 

 

 

 

 

b)  Breakdown of investments

 

 

Parent Company

 

Consolidated

 

Novasoc

P.A.Publ.

Sendas

Globex

Other

Total

 

Total

Balance at December 31, 2009

-

1,491,236

3,415

28,957

624,910

1,534

2,150,052

 

212,428

Additions

-

-

-

-

12,562

7

12,569

 

1,436

Acquisitions

-

-

-

-

-

-

-

 

-

Exchange Variation

-

-

-

-

-

(228)

(228)

 

-

Write-off

-

-

-

-

-

-

-

 

(465)

Merger

-

-

-

-

-

-

-

 

-

Equity Accounting

17,976

59,807

(1)

(9,841)

14,017

4,729

86,687

 

35,990

Investment Gain/Loss

-

-

-

-

(4,095)

-

(4,095)

 

(6)

Dividends Receivable

-

-

-

783

-

-

783

 

 

Transfer of Capital Deficiency

(11,983)

-

-

-

-

14

(11,968)

 

-

Balance at September 30, 2010

5,993

1,551,043

3,414

19,899

647,394

6,056

2,233,799

 

249,383

45


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

 

10.   Investments (Continued)

 

b)  Breakdown of investments (Continued)

 

 

Parent Company

 

Consolidated

 

Novasoc

P.A.Publ.

Sendas

Globex

Other

Total

 

Total

Balance at June 30, 2010

-

1,528,548

3,400

22,151

671,428

3,938

2,229,465

 

237,643

Additions

-

-

-

-

-

-

-

 

-

Acquisitions

-

-

-

-

-

-

-

 

-

Exchange Variation

-

-

-

-

-

(280)

(280)

 

-

Write-off

-

-

-

-

-

-

-

 

-

Merger

-

-

-

-

-

-

-

 

-

Equity Accounting

8,022

22,494

15

(2,252)

 

(18,078)

2,853

 

 

13,054

 

11,740

Investment Gain/Loss

-

-

-

-

(5,957)

-

(5,957)

 

-

Dividends Receivable

-

-

-

-

-

-

-

 

-

Transfer of Capital Deficiency

(2,029)

-

-

-

-

(454)

(2,484)

 

-

Balance at September 30, 2010

5,993

1,551,042

3,415

19,899

647,393

6,057

2,233,799

 

249,383

           

(i)     Novasoc

 

A company holding the rights resulting from the Lease Agreement entered into with Paes Mendonça S.A. related to 16 stores currently operated by the Company. Said lease agreement will be effective until 2014. During the term of the agreement, Paes Mendonça’s shareholders won’t be able to sell or in any way transfer their shares to third parties without prior and express consent from Novasoc. During the period ended September 30, 2010, the lease payments amounted to R$13,967 (R$3,315 at September 30, 2009), including an additional contingent rental amount based on 0.5% to 2.5% over total revenues of the stores, subject-matter of the referred agreement.

 

 

(ii)   

 

A subsidiary holding (i) shares representing 100% of the capital stock of Bellamar, a company that owns all shares issued by FIC; and (ii) shares representing 100% of the capital stock of Barcelona, a company that operates the Company’s cash & carry segment (“atacarejo”) through the Assai brand.

 

(iii)   Sendas Distribuidora

 

A subsidiary that concentrates the Company’s retailing operations in the State of Rio de Janeiro, according to the Partnership Agreement entered into with Sendas S.A., as mentioned in Note 1. Sendas Distribuidora holds a direct interest in Xantocarpa, corresponding to 100.00% of its capital stock. Xantocarpa concentrates the Company’s cash and carry operations in the State of Rio de Janeiro, through the Assai brand.

 

46


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

10.   Investments (Continued)

 

b)  Breakdown of investments (Continued)

 

(iii)   Sendas Distribuidora (Continued)

 

Currently, the parties are negotiating the exercise of PUT option notified to the Company at January 5, 2007 by Sendas S.A. is under negotiation, expressing the exercise of the right to swap all paid-up shares it holds for preferred shares of the Company’s capital stock, as provided for in Clause 6.9.1 of the Shareholders’ Agreement of Sendas Distribuidora.

 

(iv)   Barcelona

 

A subsidiary directly controlled through Sé, operating in the cash & carry segment through the Assai brand.

 

(v)   Globex

 

A direct subsidiary of the Company that holds 98.77% of its capital stock. Alternatively to the public tender offer to acquire Globex shares owned by other non-controlling shareholders, Globex’s controlling shareholders were granted the stock option for class B preferred shares (“Class B Preferred Shares”), without voting rights, with no par value and not tradeable, to be issued due to the Company’s capital increase, and pay them up using the credit from the installments of the acquisition price, case in which Globex’s controlling shareholders would be granted an additional credit, equivalent to 10% of the amount corresponding to the acquisition price, to be exclusively used for the payment of Class B Preferred Shares.

 

Remaining Class B Preferred Shares held by Globex’s former shareholders will be converted into Class A Preferred Shares at January 7, 2011.

 

The Company has also guaranteed, in an agreement, that upon the conversion of Class B Preferred Shares into Class A Preferred Shares, pursuant to the terms and conditions established above, specifically related to shares being converted into Class A Preferred Shares at that moment, the Company will pay Globex’s shareholders who decided to subscribe Class B Preferred Shares, whether or not controlling shareholders, the amount corresponding to the positive difference between R$40.00 per share, duly restated according to CDI variation, as of the signature of the Share Purchase Agreement (June 7, 2009), until the date of each conversion, and the market value of Class A Preferred Shares at that time, calculated according to the weighted average price per volume on the fifteen (15) trading sessions of BOVESPA immediately prior to each conversion date.

 

47


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

10.   Investments (Continued)

 

c)    Breakdown of investments (Continued)

(v)        Globex (Continued)

 

At a Notice to the Market of February 9, 2010, the Company announced the results of the auction for the public tender offer of common shares issued by Globex, due to the sale of Globex’s control, and cumulatively, as a result of the Company’s higher interest in Globex’ voting capital (the “OPA”). The Company announced that, due to the OPA auction held at February 3, 2010, it has acquired 4,102,220 common shares representing approximately 3.3% of Globex’ capital stock, which generated a goodwill of R$19,906 to the Company. In view of acquisitions made in the OPA, the Company now holds 98.77% of Globex’s total and voting capital stock.

 

Taking into account that all shareholders who adhered to the OPA opted for the Mixed Payment Option are entitled to be paid in domestic currency and in Class B preferred shares of the Company, the Company paid the total amount of R$28,428 and 137,014 Class B Preferred Shares to shareholders who adhered to the OPA at February 10, 2010, OPA’s settlement date.

 

Class B Preferred Shares shall be converted into Class A Preferred Shares of the Company (“Class A Preferred Shares”) according to the schedule of item 6.5 of the OPA Call Notice. Pursuant to item 1.6.1.3 of the Call Notice, considering that the first and second conversion dates have already occurred, 60% of the Class B Preferred Shares delivered as payment of the OPA, were converted into Class A Preferred Shares at February 17, 2010.

 

The subsidiary Globex, by means of its subsidiary Lake Niassa Empreendimentos e Participações Ltda., holds a 50% interest in Banco Investcred’s capital stock, whose management was shared between Globex and Unibanco, pursuant to the Shareholders’ Agreement dated October 26, 2001. Therefore, pursuant to CVM Ruling 247/96, the consolidated Quarterly Information was prepared taking into account the proportional consolidation of this investment until September 30, 2009. As of October 1, 2009, Banco Investcred was consolidated by Banco Itaú, as per Note 3(r).

 

(vi)   FIC – Partnership Agreement between the Company and Banco Itaú

 

Investee which owns the exploitation rights of the Company’s financial activities, whose shares representing its capital stock are held by the subsidiary Bellamar, i.e., 35.76%, Lake Niassa which holds 14.24% and Itaú Unibanco, which holds 50%.

 

 

48


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

10.   Investments (Continued)

 

b)  Breakdown of investments (Continued)

 

(vi)   FIC – Partnership Agreement between the Company and Banco Itaú (Continued)

 

The partnership includes all brands and formats of stores operated or owned by the Company, direct or indirectly, including supermarkets, hypermarkets, convenience stores, home appliance stores, cash and carry stores, gas stations, drugstores and e-commerce (Internet). The inclusion of stores to be acquired or new businesses to be developed by the Company or its subsidiaries within the scope of the partnership will be subject to negotiation between the parties.

 

Itaú Unibanco is in charge of FIC’s operating management, by incorporating the structure and commercialization of financial products to Globex’s customers, previously performed by Banco Investcred.

 

 

11.   Property and Equipment

 

 

 

 

 

 

Parent Company

 

Annual depreciation rates%

 

9.30.2010

 

6.30.2010

 

Nominal

 

Weighted average

 

Cost

 

Accumulated depreciation

 

Net

 

Net

 

 

 

 

 

 

 

 

 

 

 

 

Lands

-

 

-

 

817,065

 

-

 

817,065

 

817,065

Buildings

3.33

 

3.33

 

2,397,141

 

(631,454)

 

1,765,687

 

1,761,016

Improvements

-

 

6.67

 

1,737,948

 

(809,529)

 

928,419

 

850,519

Equipment

10.0 to 33.0

 

12.73

 

1,050,096

 

(701,092)

 

349,004

 

325,079

Installations

20.0 to 25.0

 

20.0

 

290,108

 

(217,074)

 

73,034

 

70,355

Furniture and fixtures

10.0

 

10.0

 

409,574

 

(262,128)

 

147,446

 

138,787

Vehicles

20.0

 

20.0

 

23,659

 

(9,492)

 

14,167

 

13,371

Construction in progress

-

 

-

 

359,259

 

-

 

359,259

 

329,193

Other

10.0

 

10.0

 

148,747

 

(22,045)

 

126,702

 

125,617

 

 

 

 

 

7,233,597

 

(2,652,814)

 

4,580,783

 

4,431,002

 

 

 

 

 

 

 

 

 

 

 

 

Financial Leasing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hardware

10.0

 

10.0

 

5,528

 

(1,586)

 

3,942

 

4,218

Buildings

5.0 to 20.0

 

5.0 to 20.0

 

34,447

 

(11,131)

 

23,316

 

23,658

Total

 

 

 

 

39,975

 

(12,717)

 

27,258

 

27,876

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

7,273,572

 

(2,665,531)

 

4,608,041

 

4,458,878

 

 

 

 

 

49


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

11.   Property and Equipment (Continued)

 

 

 

 

 

 

Consolidated

 

Annual depreciation rates %

 

9.30.2010

 

6.30.2010

 

Nominal

 

Weighted average

 

Cost

 

Accumulated depreciation

 

Net

 

Net

 

 

 

 

 

 

 

 

 

 

 

 

Lands

-

 

-

 

873,373

 

-

 

873,373

 

873,642

Buildings

3.33

 

3.33

 

2,604,471

 

(731,068)

 

1,873,403

 

1,847,377

Improvements

-

 

6.7

 

2,570,966

 

(1,238,150)

 

1,332,816

 

1,243,913

Equipment

10.0 to 33.0

 

12.7

 

1,429,892

 

(890,042)

 

539,850

 

493,702

Installations

20.0 to 25.0

 

20.0

 

381,865

 

(268,032)

 

113,833

 

128,653

Furniture and fixtures

10.0

 

10.0

 

592,284

 

(355,494)

 

236,790

 

226,809

Vehicles

20.0

 

20.0

 

28,410

 

(11,652)

 

16,758

 

16,268

Construction in           progress

-

 

-

 

437,678

 

-

 

437,678

 

383,685

Other

10.0

 

10.0

 

183,687

 

(38,956)

 

144,731

 

139,428

 

 

 

 

 

9,102,626

 

(3,533,394)

 

5,569,232

 

5,353,477

 

 

 

 

 

 

 

 

 

 

 

 

Financial Leasing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Machinery and equipment

 

10.0 to 33.0

 

10.0

 

40,401

 

(9,292)

 

31,109

 

32,286

Hardware

10.0

 

10.0

 

8,981

 

(2,947)

 

6,034

 

6,477

Facilities

20.0 to 25.0

 

10.0

 

1,292

 

(397)

 

895

 

956

Furniture and fixtures

10.0

 

10.0

 

17,948

 

(4,191)

 

13,757

 

14,299

Vehicles

20.0

 

20.0

 

1,375

 

(924)

 

450

 

519

Buildings

5.0 to 20.0

 

         5.0 to 20.0

 

43,402

 

(14,280)

 

29,122

 

29,561

Total

 

 

 

 

113,399

 

(32,032)

 

81,367

 

84,098

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

9,216,025

 

(3,565,426)

 

5,650,599

 

5,437,575

 

a)  Additions to property and equipment

 

 

Parent Company

 

Consolidated

 

2010

 

2009

 

2010

 

2009

 

 

 

 

 

 

 

 

Additions

169,277

 

47,585

 

219,979

 

69,615

Financial leasing

-

 

3,882

 

-

 

6,799

Capitalized interest

2,055

 

2,360

 

4,768

 

2,938

Total at March 31,

171,332

 

53,827

 

224,747

 

79,352

 

 

 

 

 

 

 

 

Additions

156,570

 

69,037

 

204,780

 

98,787

Financial leasing

-

 

-

 

-

 

12,183

Capitalized interest

2,033

 

2,280

 

2,385

 

2,878

Total at June 30,

158,603

 

71,317

 

207,165

 

113,848

 

 

 

 

 

 

 

 

Additions

232,580

 

155,306

 

334,055

 

193,778

Financial leasing

-

 

1,553

 

-

 

18,460

Capitalized interest

2,958

 

2,099

 

3,381

 

2,699

Total at September 30

235,538

 

158,958

 

337,436

 

214,937

 

 

 

 

 

 

 

 

Overall Total

565,473

 

284,102

 

769,348

 

408,137

 

“Additions” comprise the amounts incurred with the acquisition of operating assets, land and buildings to expand activities, construction of new stores, modernization of existing warehouses and improvements of stores and investment in equipment and information technology.

 

50


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

11.   Property and Equipment (Continued)

 

a)  Additions to property and equipment (continued)

 

According to CPC 01, the items of property and equipment showing signs that its costs registered are higher than its recovery values are reviewed in detail and periodically to determine the need of provision to reduce the book balance to its realization value. The Management neither identifies any changes in the circumstances or signs of technological obsolescence nor any evidence that its tangible assets used in its operations are not recoverable, concluding that no provision for assets losses is required.

 

12.   Intangible Assets

 

 

Parent Company

 

Balance at 6.30.2010

 

Additions

 

Transfer

 

Write-off

 

Amortization

 

Balance at 9.30.2010

 

 

 

 

 

 

 

 

 

 

 

 

Software (20% p.a.)

131,703

 

7,476

 

2,235

 

(4)

 

(10,627)

 

130,783

Goodwill

828,102

 

-

 

-

 

-

 

-

 

828,102

Total

959,805

 

7,476

 

2,235

 

(4)

 

(10,627)

 

958,885

 

 

 

Consolidated

 

 

 

Balance at 6.30.2010

 

Additions

 

Transfer

 

Write-off

 

Amortization

 

Balance at 9.30.2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Globex – commercial rights

 

 

17,113

 

-

 

-

 

-

 

(1,423)

 

15,690

Software (20% p.a.)

 

 

161,772

 

11,773

 

2,474

 

(84)

 

(13,511)

 

162,424

Goodwill

 

 

1,274,830

 

-

 

-

 

(189)

 

-

 

1,274,641

Total

 

 

1,453,715

 

11,773

 

2,474

 

(273)

 

(14,934)

 

1,452,755

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For consolidation purposes, upon the merger of subsidiaries, the amounts originally recorded under investments, including goodwill based on expected future profitability, were recorded in the intangible assets. Goodwill balances verified in the acquisitions of equity interests are supported by technical reports on the expected future profitability of the companies and were amortized until December 31, 2008 according to the terms and extensions estimated in said reports, limited to 10 years.

 

Goodwill balances are no longer amortized on an accounting basis since January 1, 2009, only subject to the impairment test pursuant to CPC 01. According to the Company’s assessments on December 31, 2009 and considering future results projections, the Management concluded that no provision for assets losses is required.

 

In the first quarter, the goodwill balance increased by R$19,906 referring to the acquisition of 4,102,220 common shares representing approximately 3.3% of Globex’s capital stock, in view of the public tender offer auction held on February 3,2010.

 

In the merger of subsidiaries and for consolidation purposes, the amounts originally recorded under investments, such as, goodwill, mainly, expectation of future profitability were transferred to the intangible assets and were amortized until December 31, 2008 within the terms and extensions of profitability projections which determine them, limited by a 10-year term.

 

51


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

12.            Intangible Assets (Continued)

 

The Company valued the recovery of goodwill book value based on its usage value, using the cash generating units discounted cash flow method, which represent the set of tangible and intangible assets employed in the operation. The process to estimate the usage value involves the utilization of assumptions, judgments and estimates on future cash flows, growth and discount rates. The future cash flow assumptions and growth projections are based on the Company’s annual budget and long-term business plan, approved by the Board of Directors, as well as comparable market data and they represent the best Management’s estimate on the economic conditions to prevail during the economic useful life of cash flow generating assets.

 

The key assumptions used when estimating the usage value to which the assets recovery value is more sensitive are as follows:

 

(i)   Revenues– Revenues were projected based on the Company’s annual budget for the following year and business plan comprising the period between 2010 and 2014;

(ii)  Operating costs and expenses – Costs and expenses were projected based on the Company’s historical performance and its growth was projected in line with sales growth, taking into account its relationship;

(iii) Capital Investments – these were estimated taking into account the infrastructure necessary to support sales growth.

 

The key assumptions were estimated taking into account the Company’s historical performance and based on reasonable macroeconomic assumptions and compatible with external sources of information based on the financial market projections, documented and approved by the Company’s Management bodies.

 

Consistently with the economic valuation techniques, the usage value valuation is made for a 5-year period. Revenue growth rates used are compatible with long-term macroeconomic expectations, which are yearly reviewed based on the historical performance and prospects for the sector where the Company operates.

 

Future cash flows estimated were discounted at a single discount rate of 9.7% this year.

 

The Company’s intangible assets impairment test did not require the recognition of losses since the estimated usage value exceeds its net book value on the valuation date.

 

 

52


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

13.   Loans and financing

 

i)      Breakdown of debt

 

 

 

 

Parent Company

Consolidated

 

Note

 

9.30.2010

6.30.2010

9.30.2010

6.30.2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debentures

13d

 

495,450

506,330

495,450

506,330

Swap agreements

13a

 

(483)

611

(483)

611

Funding cost

 

 

(3,763)

(3,977)

(3,763)

(3,977)

 

 

 

491,204

502,964

491,204

502,964

Domestic currency

 

 

 

 

 

 

BNDES

13b

 

38,656

38,006

63,338

63,802

IBM

 

 

-

-

6,623

6,806

Working capital

13a

 

373,740

362,710

437,724

437,954

Financial leasing

23b

 

12,661

14,995

27,737

30,264

Swap agreements

 

 

(2,122)

(4,444)

(2,558)

(4,316)

Funding cost

 

 

(4,526)

(1,833)

(6,771)

(3,904)

 

 

 

418,409

409,434

526,093

530,606

 

 

 

 

 

 

 

Foreign currency

 

 

 

 

 

 

Working capital

13a

 

247,044

    258,384

266,224

278,601

Swap agreements

13a

 

31,421

433

34,345

1,719

Funding cost

 

 

(418)

(167)

(716)

(481)

 

 

 

278,047

258,650

299,853

279,839

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total current

 

 

1,187,660

1,171,048

1,317,150

1,313,409

 

 

 

 

 

Parent Company

 

Consolidated

 

Note

 

9.30.2010

 

6.30.2010

 

9.30.2010

 

6.30.2010

Debentures

 

 

 

 

 

 

 

 

 

Debentures

13d

 

1,060,367

 

1,045,324

 

1,060,367

 

1,045,324

Funding cost

 

 

(8,848)

 

(9,629)

 

(8,848)

 

(9,629)

 

 

 

1,051,519

 

1,035,695

 

1,051,519

 

1,035,695

 

 

 

 

 

 

 

 

 

 

Domestic currency

 

 

 

 

 

 

 

 

 

BNDES

13b

 

222,472

 

53,371

 

233,488

 

70,269

IBM

 

 

-

 

-

 

13,798

 

15,314

Working capital

13a

 

348,320

 

333,803

 

611,019

 

587,020

PAFIDC quotas

8

 

-

 

-

 

1,158,923

 

1,126,675

Financial leasing

23b

 

43,399

 

42,804

 

65,936

 

68,614

Swap agreements

13a

 

3,998

 

9,668

 

2,750

 

11,227

Funding cost

 

 

(10,626)

 

(4,691)

 

(13,978)

 

(8,271)

 

 

 

607,563

 

434,955

 

2,071,936

 

1,870,848

 

 

 

 

 

 

 

 

 

 

Foreign currency

 

 

 

 

 

 

 

 

 

Working capital

13a

 

430,341

 

128,225

 

805,923

 

519,884

Swap agreement

13a

 

18,089

 

6,916

 

42,523

 

8,694

Funding cost

 

 

(501)

 

-

 

(614)

 

(185)

 

 

 

447,929

 

135,141

 

847,832

 

528,393

 

 

 

 

 

 

 

 

 

 

Total noncurrent

 

 

2,107,011

 

1,605,791

 

3,971,287

 

3,434,936

 

53


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

13. Loans and financing (Continued)

 

ii)     Noncurrent maturity

 

Year

 

Parent Company

 

Consolidated

 

 

 

 

 

from 13 to 24 months

 

394,491

 

631,362

from 25 to 36 months

 

308,124

 

1,666,494

from 37 to 48 months

 

945,637

 

1,209,586

from 49 to 60 months

 

135,207

 

135,544

over 60 months

 

343,527

 

351,741

Subtotal

 

2,126,986

 

3,994,727

 

 

 

 

 

Funding cost

 

(19,975)

 

(23,440)

 

 

 

 

 

Total

 

2,107,011

 

3,971,287

 

 

a)  Working capital financing

 

The funds for working capital financing purposes are obtained from local financial institutions and are used to finance customer credit (remaining balance not granted to PAFIDC) or GPA growth. This funding is obtained without guarantees, except for Sendas Distribuidora, whose operations are endorsed by the Company.

 

 

 

Parent Company

 

Consolidated

 

 

Rate*

 

9.30.2010

 

6.30.2010

 

Rate*

 

9.30.2010

 

6.30.2010

Debt

 

 

 

 

 

 

 

 

 

 

 

 

Domestic currency

 

 

 

 

 

 

 

 

 

 

 

 

Banco do Brasil

CDI

11.3%

 

722,060

 

696,513

 

11.3%

 

1,046,139

 

1,008,496

Itaú

CDI

 

 

-

 

-

 

 

 

1,099

 

4,016

Bradesco

 

 

 

-

 

-

 

 

 

22

 

1,050

Alfa

CDI

 

 

-

 

-

 

 

 

1,483

 

-

Safra

CDI

 

 

-

 

-

 

 

 

-

 

943

Unibanco

 

 

 

-

 

-

 

 

 

-

 

10,469

 

 

 

 

722,060

 

696,513

 

 

 

1,048,743

 

1,024,974

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency

 

 

 

 

 

 

 

 

 

 

 

 

ABN AMRO

YEN

1.7%

 

128,944

 

128,868

 

1.7%

 

128,944

 

128,868

ABN AMRO

USD

 

 

-

 

-

 

4.9%

 

147,743

 

154,909

Santander

USD

5.9%

 

244,855

 

257,741

 

5.9%

 

345,167

 

410,348

Itaú BBA

USD

3.6%

 

303,586

 

-

 

3.6%

 

303,587

 

-

Banco do Brasil

USD

 

 

-

 

-

 

3.9%

 

146,706

 

104,360

 

 

 

 

677,385

 

386,609

 

 

 

1,072,147

 

798,485

Swap agreements

 

 

 

 

 

 

 

 

 

 

 

 

ABN AMRO

CDI

101.8%

 

(11,127)

 

(14,029)

 

104.0%

 

7,221

 

(7,211)

Santander

CDI

101.6%

 

42,548

 

21,376

 

101.6%

 

43,397

 

17,088

Itaú BBA

CDI

105.2%

 

18,086

 

-

 

105.2%

 

18,089

 

 

Banco do Brasil

CDI

103.9%

 

1,879

 

5,226

 

104.0%

 

8,353

 

7,447

 

 

 

 

51,386

 

12,573

 

 

 

77,060

 

17,324

 

 

 

 

 

 

 

 

 

 

 

 

 

Overall Total

 

 

 

1,450,831

 

1,095,695

 

 

 

2,197,950

 

1,840,783

 

* Weighted average rate

 

54


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

13.       Loans and financing (Continued)

 

a)  Working capital financing (Continued)

 

The Company uses swap operations to translate U.S. dollar-denominated,
yen-denominated obligations and fixed interest rate to Brazilian
reais liabilities pegged to CDI (floating) variation.

 

CDI annual benchmark rate at September 30, 2010 stood at 9.25% (8.79% at June 30, 2010).

 

 

b)  BNDES

 

 

The line of credit obtained from the National Bank for Economic and Social Development (BNDES) is subject to incidence on TJLP rate (long-term interest rate), accrued of annual interest rates. In the event the TJLP exceeds 6% p.a., the surplus will be added to the principal outstanding balance. The Company also has agreements indexed based on a basket of foreign currencies, in addition to the respective charges, plus the outstanding balance and annual interest rates. Financing is paid in monthly installments after a grace period, as mentioned below.

 

In the quarter ended September 30, 2010, the Company had two agreements entered into with BNDES at May 9, 2007, and July 28, 2009, which are indexed by TJLP.

 

In addition to BNDES Resolutions 665/87 (Provisions Applicable to BNDES Agreements) and 660/87 (Follow-up Rules and Instructions), the Company must observe certain debt covenants indexes calculated based on its consolidated information, in accordance with Brazilian GAAP. At March 3, 2010, the Company renegotiated the ratios to be observed, which now are as follows: (i) maintenance of a capitalization ratio (shareholders' equity/total assets) equal to or in excess of 0.30 and (ii) maintenance of a current ratio (current assets/current liabilities) equal to or in excess of 1.05. The Management effectively controls and monitors debt covenants, and has been fully performing the ratios required on a contractual basis.

 

The funding obtained by subsidiary Globex with financial institutions (BNDES, Banco IBM and Unibanco) includes event of early maturity related to the change in the share control. Said financial institutions have already officially declared that they will not exercise this right referring to the declaration of early maturity.

55


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

13.       Loans and financing (Continued)

b)  BNDES (Continued)

 

 

 

 

 

 

 

Parent Company

 

Consolidated

Annual financial charges

Grace period

No. of monthly installments

Maturity

 

9.30.2010

6.30.2010

 

9.30.2010

6.30.2010

TJLP+ 3.2%

6

60

Nov/2012

 

71,583

79,843

 

71,583

79,843

TJLP+ 2.7%

6

60

Nov/2012

 

10,341

11,534

 

10,341

11,534

TJLP+ 4.5%

6

24

Dec/2010

 

-

-

 

425

850

TJLP+ 4.5%

5

24

Jan/2011

 

-

-

 

597

1,045

TJLP+ 2.3%

9

48

Nov/2011

 

-

-

 

11,492

1,166

TJLP+ 2.3%

5

48

May/2012

 

-

-

 

5,245

2,013

TJLP+ 2.3%

11

48

Nov/2011

 

-

-

 

1,846

2,515

TJLP+ 2.8%

7

48

Nov/2011

 

-

-

 

5,322

19,147

TJLP+ 2.8%

6

48

May/2012

 

-

-

 

10,770

15,958

TJLP+ 4.5%

18

60

Dec/2016

 

40,000

-

 

40,000

-

TJLP+ 4.5%

18

60

Dec/2016

 

41,000

-

 

41,000

-

TJLP+ 4.5%

18

60

Dec/2016

 

98,204

-

 

98,205

-

 

 

 

 

 

261,128

91,377

 

296,826

134,071

 

c)  Redeemable PAFIDC quotas of interest -As per Official Memorandum CVM/SNC/SEP 01/2006, quotas issued by PAFIDC owned by the Company were reclassified into the item “Loans and financing” (Note 8).

d) Debentures

 

 (i)    Breakdown of outstanding debentures

 

 

Type

0

Outstanding securities

0

Annual financial charges

 

Unit price

 

9.30.2010

6.30.2010

6th issue

 

 

 

 

 

 

 

 

 

 

  1st series

No preference

 

54,000

 

CDI + 0.5%

 

10,084

 

544,558

556,884

  2nd series

No preference

 

23,965

 

CDI + 0.5%

 

10,084

 

241,673

247,143

7th issue

 

 

 

 

 

 

 

 

 

 

  1st series

No preference

 

200

 

119% of CDI

 

1,144,928

 

228,986

222,070

8th issue

 

 

 

 

 

 

 

 

 

  1st series

No preference

 

500

 

109.5% of CDI

 

1,081,201

 

540,600

525,557

6th issue

 

 

 

 

 

 

 

 

 

  1st and 2nd series

Interest swap

 

 

 

104.96% of CDI

 

 

 

(483)

611

 

 

 

 

 

 

 

 

 

 

 

Funding Cost

 

 

 

 

 

 

 

 

(12,611)

(13,606)

 

 

 

 

 

 

 

 

 

 

 

Parent Company/Consolidated – Current and Noncurrent

 

 

 

 

 

1,542,723

1,538,659

 

 

 

 

 

 

 

 

 

 

 

  Noncurrent liabilities

 

 

 

 

 

 

 

1,051,519

1,035,695

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

491,204

491,204

502,964

 

56


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

13.   Loans and financing (Continued)

 

d) Debentures (Continued)

 

 

(ii)    Debenture operation

 

 

 

Number of

 

 

 

 

debentures

 

Amount

At December 31, 2009

 

77,965

 

1,500,742

  Paid interest and swap

 

-

 

(33,804)

  Interest and swap 

 

-

 

34,122

 

 

 

 

 

At March 31, 2010

 

777,965

 

1,501,060

 

 

 

 

 

  Interest and swap

 

-

 

37,598

At June 30, 2010

 

777,965

 

1,538,659

 

 

 

 

 

  Paid interest and swap

 

-

 

(39,516)

  Interest and swap 

 

-

 

43,580

 

 

 

 

 

At September 30, 2010

 

777,965

 

1,542,723

 

 

(iii)   Additional information

 

6th issue – On March 27, 2007, the members of the Company’s Board of Directors approved the issue of 77,965 debentures, corresponding to the total amount of R$779,650. The debentures issued within the scope of the 6th issue have the following characteristics:

 

Series: the issue took place in two series; in the first series 54,000 debentures were issued, and 23,965 debentures in the second series.

 

Class and Convertibility: book-entry and are not converted into shares issued by the Company.

 

Type: unsecured

 

Issue Date: March 1, 2007

 

Term and Maturity: seventy-two (72) months, thus maturing on March 1, 2013;

 

Remuneration: daily average rate of one-day DI – Interbank Deposits, known as “over extra group,” expressed as annual percentage, based on a year of 252 days, calculated and disclosed by CETIP – Clearing House for the Custody and Financial Settlement of Securities, plus annual spread of 0.5%, based on a year of 252 days, due half-yearly, as of the issue date, always on March and September 1 every year;

 

Amortization: to be amortized in three (3) annual installments: March 1, 2011, March 1, 2012, and March 1, 2013. On each amortization payment date, 25,988 debentures will be paid.

 

Guarantee: no guarantee

 

57


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

13.   Loans and financing (Continued)

d) Debentures (Continued)

 

Optional Early Redemption: as of the 18th month after the issue date, the Company may fully or partially redeem in advance the debentures by paying (i) the Unit Face Value plus Remuneration, calculated on a “pro rata temporis” basis, as of the issue date or the last date of payment of the Remuneration, where applicable, until the date of its effective payment; or (ii) reimbursement premium corresponding to, at most, one point five tenths per cent (1.5%), calculated on a “pro rata temporis” basis, downward count. The partial redemption, if applicable, may occur through a draw, pursuant to paragraph 1 of Article 55 of Law 6,404 of December 15, 1976 (“Brazilian Corporation Law”) and other applicable rules;

 

Financial Ratios: calculated based on the Company’s quarterly information: (i) net debt (debt less cash and cash equivalents and accounts receivable) not exceeding the shareholders’ equity; (ii) consolidated net debt/EBITDA ratio (Note 25), lower or equal to 3.25. At September 30, 2010, the Company complied with debt covenants (financial ratios) established in said deed of debentures.

 

Utilization of funds: the funds raised through the first series of the 6th issue of debentures will be used by the Company to strengthen working capital and the remainder to pay current debt.

 

7th issue – at June 8, 2009, the members of the Company’s Board of Directors approved the issue and the restricted offering of 200 non-convertible debentures, in the total amount of R$200,000. The debentures issued within the scope of the 7th issue have the following characteristics:

 

Series: single

 

Class and Convertibility: registered, book-entry and without issuing share certificates. The debentures are not converted into shares issued by the Company.

 

Type: unsecured

 

Issue date: June 15, 2009

 

Term and Maturity: seven hundred and twenty (720) days as of the issue date, thus maturing at June 5, 2011.

 

Remuneration: 119% of average daily rates of one-day DI–Interbank Deposits, known as “over extra group,” expressed as a percentage per annum, based on a year of 252 business days, daily calculated and published by CETIP.

 

Amortization: amortization in a lump sum on the maturity date.

 

Early Redemption: not applicable.

 

Guarantee: no guarantee

 

58


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

13.   Loans and financing (Continued)

d)    Debentures (Continued)

 

Financial Ratios: calculated based on the Company’s quarterly information: (i) net debt (debt less cash and cash equivalents and accounts receivable) not exceeding the shareholders’ equity; (ii) consolidated net debt/EBITDA ratio (Note 25), lower or equal to 3.25. At September 30, 2010, the Company complied with the debt covenants (financial ratios) established in said deed of debentures.

 

Utilization of funds: funds raised by means of the 7th issue shall be exclusively used by the Company to acquire farming and ranching products with its suppliers who are agricultural producers and/or cooperatives listed in the respective Deed of Issue within a term not exceeding five (5) months as of the issue date to be sold at the Company’s establishments.

 

8th issue – at December 4, 2009, the members of the Company’s Board of Directors approved the issue and the restricted offering of 500 non-convertible debentures, in the total amount of R$500,000. The debentures issued within the scope of the 8th issue have the following characteristics:

 

Tranches: single tranche

 

Class and Convertibility: registered, book-entry and without issuing share certificates. The debentures are not converted into shares issued by the Company.

 

Type: unsecured

 

Issue date: December 15, 2009

 

Term and Maturity: sixty (60) days as of the issue date, thus maturing on December 15, 2014.

 

Remuneration: 109.5% average daily rates of one-day DI–Interbank Deposits, known as “over extra group,” expressed as annual percentage, based on a year of two hundred and fifty-two (252) business days, calculated and published by CETIP. The Remuneration will be paid as of the thirty-sixth (36th) month after the issue date, on the following dates: (i) December 15, 2012; (ii) June 15, 2013; (iii) December 15, 2013; (iv) June 15, 2014; and (v) on the Maturity Date, December 15, 2014.

 

Amortization: the unit face value of the debentures will be amortized on the following dates: (i) December 15, 2012; (ii) June 15, 2013; (iii) December 15, 2013; (iv) June 15, 2014; and (v) on the Maturity Date, December 15, 2014. On each date, one fifth (1/5) of the unit face value of the debentures (R$1,000,000) will be paid.

 

Early Redemption: the Company is entitled to early redemption at any time, at its exclusive discretion, pursuant to the conditions established in the deed of issue.

 

Guarantee: no guarantee

 

Financial Ratios: calculated based on the Company’s quarterly information: (i) net debt (debt less cash and cash equivalents and accounts receivable) not exceeding the shareholders’ equity; (ii) consolidated net debt/EBITDA ratio (Note 25), lower or equal to 3.25. At September 30, 2010, the Company complied with debt covenants (financial indexes) established in said deed of debentures.

59


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

 

13.   Loans and financing (Continued)

 

a)    Debentures (Continued)

 

Utilization of funds: the funds raised through the 8th issue of debentures shall be used by the Company to maintain its cash strategy and to strengthen the working capital.

 

14.   Financial instruments

 

Derivatives operations are exclusively used to reduce the exposure to risks resulting from the foreign currency fluctuation and interest rates, aiming at maintaining the balanced capital structure.

 

Parent company’s financial instruments and consolidated are reported pursuant to CVM Deliberations 475/08 and 566/08, which approved the Technical Pronouncement CPC 14.

 

Main financial instruments and their amounts recorded in the quarterly information by category are summarized as follows:

 

 

Parent Company

 

Book Value

 

Fair Value

 

9.30.2010

6.30.2010

 

9.30.2010

6.30.2010

Cash and cash equivalents

1,413,689

1,289,597

 

1,413,689

1,289,597

Accounts receivable and PAFIDC

902,753

881,674

 

902,753

881,674

Related parties

986,846

731,282

 

986,846

731,282

Suppliers

(1,825,942)

(1,815,552)

 

(1,825,942)

(1,815,552)

Loans and Financing (*)

(1,751,948)

(1,238,180)

 

(1,760,742)

(1,237,211)

Debentures

(1,542,723)

(1,538,659)

 

(1,547,579)

(1,501,833)

Net exposure

(1,817,325)

(1,689,838)

 

(1,830,975)

(1,652,043)

 

 

Consolidated

 

Book Value

 

Fair Value

 

9.30.2010

6.30.2010

 

9.30.2010

6.30.2010

Cash and cash equivalents

2,128,035

1,768,200

 

2,128,035

1,768,200

Accounts receivable and PAFIDC

2,593,191

2,677,471

 

2,593,191

2,677,471

Related parties

195,005

257,527

 

195,005

  257,527

Suppliers

(3,274,124)

(3,263,749)

 

(3,274,124)

(3,263,749)

Loans and Financing (*)

(3,745,714)

(3,209,686)

 

(3,754,508)

(3,208,717)

Debentures

(1,542,723)

(1,538,659)

 

(1,547,579)

(1,501,833)

Net exposure

(3,646,330)

(3,308,896)

 

(3,659,980)

(3,271,101)

 

 

 

 

 

 

(*)   (*) loans and derivative financial instruments classified as fair value hedge are recorded by fair value.

 

The Company adopts risk control policies and procedures, as outlined below:

 

a)  Considerations on risk factors that may affect the business of the Company and its subsidiaries

 

(i)     Credit risk

 

·                       Cash and cash equivalents: in order to minimize credit risk of these investments, the Company adopts policies restricting the marketable securities that may be allocated to a single financial institution, and which take into consideration monetary limits and financial institution ratings, which are frequently restated (Note 4).

60


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

14.           Financial instruments (Continued)

 

·                       Receivables: The credit risk related to accounts receivable is mitigated by the fact that most of sales of the Company and its subsidiaries are carried out via credit cards. In the quarter ended September 30, 2010, direct sales to individuals through post-dated checks accounted for nearly 0.43% of total sales in the period (0.31% at September 30, 2009). Credit card and/or tickets sales are mostly assigned to PAFIDC, the risk of which is related and limited to the amount of subordinated quotas held by the Company (Note 8).

 

(ii)    Interest rate risk

 

The Company and its subsidiaries obtain loans and financing from major financial institutions in order to meet its cash needs for investments and growth. As a result, the Company and its subsidiaries are exposed to material interest rate fluctuation risks, mainly due to the liabilities component of derivative operations (currency hedge) and CDI-related debts. The balance of marketable securities indexed to CDI, partially offsets this effect.

 

(iii)   Exchange rate risk

 

The Company and its subsidiaries are exposed to exchange rate fluctuations, which may result in the increase of liabilities balances of foreign currency-denominated loans. The Company and its subsidiaries use derivatives, such as swaps, which aim at annulling the exchange rate risk, turning the cost of debt into local currency and interest rates.

 

·       Derivative financial instruments

    

The swap agreements mentioned above are classified as fair value hedges. At September 30, 2010, these agreements amount to a reference value of R$1,997,470 (R$1,680,720 in June 2010). Usually, these operations are contracted on a matched basis, in terms of value, term and rates, and preferably with the same financial institution, observing the limits established by the Management.

 

Other swap operations carried out by the Company and its subsidiaries are substantially related to debentures and BNDES loans, aiming at changing fixed and variable interest rates into variable interest rates (CDI). These instruments are classified as “measured at fair value to income”.

 

According to the Company’s treasury policy, swaps with caps are not allowed, as well as margins, “regret” clauses, double index, flexible options or any other types of options different from traditional swaps for the hedge of debts, including for speculative purposes.

 

The Company’s internal control environment was designed so as to ensure that transactions executed are in compliance with this treasury policy.

 

The Company calculates the effectiveness of these hedge operations upon their contracting and on a continued basis (at least, quarterly). Hedge operations contracted in the period ended September 30, 2010 showed effectiveness in relation to the debts, purpose of this hedge. For derivative operations qualified as hedge accounting, pursuant to CPC 14, the hedged debt is also adjusted at fair value as per fair value hedge rules.

 

61


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

14.   Financial instruments (Continued)

(iii)   Exchange rate risk (Continued)

·       Derivative financial instruments (Continued)

 

Hedge accounting, according to CPC 14, the debt, purpose of the coverage is also adjusted at the fair value as per fair value hedge accounting standards.

 

 

 

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

Reference Value (notional)

 

Fair value

 

 

 

 

 

 

 

 

 

 

Fair value hedge

 

9.30.2010

 

6.30.2010

 

9.30.2010

 

6.30.2010

 

 

 

 

 

 

 

 

 

 

Purpose of hedge (debt)

 

(1,997,470)

 

(1,680,720)

 

(1,858,835)

 

(1,538,598)

 

 

 

 

 

 

 

 

 

 

Long Position

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

USD + Pre

4.13% p.a.

 

909,239

 

592,489

 

954,640

 

677,800

 

 

 

 

 

 

 

 

 

YEN + Pre

1.69% p.a.

 

 

 

 

 

 

 

 

 

 

108,231

 

108,231

 

128,944

 

128,868

 

 

 

 

 

 

 

 

 

 

Pre-fixed rate

11.3% p.a.

 

980,000

 

980,000

 

1,033,706

 

(499,729)

 

 

 

1,997,470

 

1,680,720

 

2,117,290

 

306,939

 

 

 

 

 

 

 

 

 

 

Short Position

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% CDI

102.9% p.a.

 

(1,997,470)

 

(1,680,720)

 

(2,194,354)

 

(325,814)

 

 

 

 

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

Reference Value (notional)

 

Fair value

Measured at fair value through income

 

 

 

 

 

 

 

 

 

 

9.30.2010

 

6.30.2010

 

9.30.2010

 

6.30.2010

 

 

 

 

 

 

 

 

 

 

Long Position

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CDI + Pre

100% of CDI + 0.5% p.a.

 

779,650

 

779,650

 

791,833

 

810,007

USD + Pre

100% of CDI - 4.61% p.a.

 

-

 

-

 

 

 

-

 

 

 

779,650

 

779,650

 

791,833

 

810,007

 

 

 

 

 

 

 

 

 

 

Short Position

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% CDI

 

 

(779,650)

 

(779,650)

 

(791,350)

 

(810,618)

 

 

 

-

 

-

 

483

 

(611)

 

Gains and losses, realized and unrealized, on these agreements, for the quarter ended September 30, 2010, are recorded in the net financial income and the balance receivable or payable in the fair value of R$76,581 in September 2010 (R$19,487 in June 2010) is recorded in item “loans and financing”.

 

The effects of fair value hedge to the net income for the period ended September 30, 2010 were R$10,759 (R$16,134 in September 2009).

 

Other instruments marked at fair value showed effects in the income for the period ended September 30, 2010 of R$1,370 (R$823 in September 2009).

 

62


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

14.   Financial instruments (Continued)

 

(iv)   Fair values of derivative financial instruments

 

Fair values are calculated by projecting the future flows of operations, based on the projected CDI curves of BM&F Bovespa and carrying them at present value, using DI market rates to swaps published by BM&F Bovespa.

 

The market values of swaps – exchange coupon x CDI were obtained by using exchange rates prevailing on the market on the date the financial information is drawn up and on rates projected by the market calculated based on the currency coupon curves. In order to determine the coupon of foreign currency indexed-positions the straight line convention of 360 consecutive days was adopted and to determine the coupon of CDI indexed-position the exponential convention of 252 business days was adopted.

 

b)  Analysis of sensitivity of derivative financial instruments

 

CVM Ruling sets forth that publicly-held companies, supplementing the provision of item 59 of CPC 14 – Financial Instruments: Recognition, Measurement and Supporting Documentation should disclose a sensitivity analysis chart, for each type of market risk deemed as relevant by the Management, originated by derivative financial instruments, to which the entity is exposed on each period closing date.

 

Pursuant to the provision above, according to the Management’s evaluation, the most probable scenario is to realize on the maturity dates of each operation what the market has been signaling through market curves (currency and interest rates) of BM&F Bovespa. Therefore, in the probable scenario, there is no impact over the fair value of financial instruments mentioned above. For scenarios II and III, for exclusive effect of sensitivity analysis, a deterioration of 25% and 50%, respectively, was considered on derivative financial instruments until the maturity date of financial instruments.

 

(i)     Fair value hedge (on maturity dates)

 

For derivative instruments (destined to hedge its financial debt), variations in scenarios are accompanied by respective purposes of hedge, thus, evidencing that effects are practically null.

 

For these operations, the Company disclosed the balance of purpose (debt) and hedged derivative financial instrument in separate items of a Sensitivity Analysis Chart, so that to inform about the net exposure of the Company, in each one of the three scenarios mentioned:

63


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

14.   Financial instruments (Continued)

 

b)  Analysis of sensitivity of derivative financial instruments (Continued)

 

 

Operations

 

Risk

 

Scenario I

 

Scenario II

 

Scenario III

 

 

 

 

 

 

 

 

 

Debt - USD

 

USD increase

 

(1,296,811)

 

(1,621,014)

 

(1,945,216)

Swap (long position in USD)

 

USD increase

 

1,303,800

 

1,629,751

 

1,955,701

 

 

net effect

 

6,989

 

8,737

 

10,485

 

 

 

 

 

 

 

 

 

Debt - YEN

 

YEN increase

 

(143,725)

 

(179,656)

 

(215,587)

Swap (long position in YEN)

 

YEN increase

 

143,725

 

179,656

 

215,587

 

 

net effect

 

-

 

-

 

-

 

 

 

 

 

 

 

 

 

Debt at pre-fixed rate

 

Rate increase

 

(886,405)

 

(932,024)

 

(979,327)

Swap (long position in pre-fixed rate)

 

Rate increase

 

887,607

 

933,935

 

982,123

 

 

net effect

 

1,201

 

1,910

 

2,796

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Swap (short position in CDI)

 

CDI increase

 

(2,166,817)

 

(2,256,947)

 

(2,350,003)

 

 

 

 

 

 

 

 

 

Net effect

 

 

 

 

 

(87,673)

 

(178,095)

 

The Company’s net exposure corresponds to CDI-related debt and the total net effect represents the deterioration of scenario II and III in relation to scenario I, which the Company considers as the most probable scenario.

 

(ii)    Measured at fair value through income

 

Operations

 

Risk

 

Scenario I

 

Scenario II

 

Scenario III

 

 

 

 

 

 

 

 

 

Swap (long position in CDI)

 

CDI increase

 

985,090

 

1,027,198

 

1,068,795

Swap (short position in CDI)

 

CDI increase

 

(984,859)

 

(1,029,068)

 

(1,072,767)

 

 

net effect

 

231

 

(1,870)

 

(3,972)

 

 

 

 

 

 

 

 

 

Total net effect

 

 

 

231

 

(1,870)

 

(3,972)

 

The total net effect of scenarios mentioned above is basically due to the Company’s exposure to CDI.

 

64


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

14.   Financial instruments (Continued)

 

c) Consolidated position of the derivative financial instruments

 

The consolidated position of outstanding derivative operations at September 30 and June 30, 2010 is shown below:

 

Oustanding                 
          Amount Payable or Receivable  Fair Value 
Description  Counterparties  Notional  Contracting Date  Maturity  09.30.2010  6.30.2010  09.30.2010  6.30.2010 
 
Exchange swaps                 
recorded at CETIP  ABN AMRO  YEN 6.281.550  10/30/2007  10/31/2011  11,935  14,936  11,127  14,029 
(JPY x CDI)                 
 
  Santander  US$ 40.000  11/21/2007  4/29/2011  (16,469)  (10,055)  (14,445)  (7,375) 
    US$ 40.000  11/21/2007  5/31/2011  (16,465)  (10,052)  (14,189)  (7,151) 
    US$ 40.000  11/21/2007  6/30/2011  (16,444)  (10,029)  (13,914)  (6,916) 
    US$ 100.000  4/16/2010  4/10/2013  (5,600)  (2,458)  (848)  4,637 
 
Exchange swaps                 
recorded at CETIP  ABN AMRO  US$ 40.000  3/14/2008  3/2/2012  (12,482)  (6,195)  (9,512)  (3,503) 
(USD x CDI)    US$ 15.000  3/14/2008  12/20/2011  (4,697)  (2,338)  (3,709)  (1,385) 
    US$ 10.000  3/14/2008  12/20/2010  (3,143)  (1,577)  (2,924)  (1,286) 
    US$ 10.000  3/14/2008  12/20/2011  (2,946)  (1,384)  (2,203)  (643) 
 
  Brasil  US$ 150.814  3/31/2010  3/12/2012  (13,752)  1,548  (8,162)  1,298 
 
  
 
Itaú  US$ 175.000  7/1/2010  9/7/2013  (26,171)  -  (18,089)  - 
Interest Rate Swap  Banco do Brasil  R$ 150,000  12/28/2009  1/3/2011  943  1,005  791  204 
recorded at CETIP    R$ 160,000  12/28/2009  1/4/2011  1,148  1,163  989  216 
(Fixed rate x CDI)    R$ 35,000  12/28/2009  3/11/2011  342  313  339  100 
    R$ 45,000  12/28/2009  3/11/2011  439  402  436  128 
    R$ 80,000  6/28/2010  6/12/2013  217  8  (345)  (1,309) 
    R$ 130,000  6/28/2010  6/6/2014  311  13  (1,493)  (3,660) 
    R$ 130,000  6/28/2010  6/2/2015  279  12  (2,161)  (4,699) 
    R$ 200,000  3/31/2010  3/7/2013  2,049  1,442  1,465  (742) 
 
  Unibanco  R$ 779,650  6/25/2007  3/1/2013  (1)  175  483  (611) 
 
  
 
Santander  R$ 50,000  6/28/2010  6/12/2013  149  (7)    (216)  (817) 
          Total   (76,581)  (19,486) 

 

The net position of the aforementioned agreements is recorded in loans and financing according to Note 13.

 

 

65


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

15.   Taxes and social contribution payable

 

The amounts payable were as follows:

 

 

Parent Company

 

Consolidated

 

9.30.2010

 

6.30.2010

 

9.30.2010

 

6.30.2010

Current

 

 

 

 

 

 

 

PIS and COFINS payable and other

91,488

 

99,528

 

142,940

 

183,437

Provision for income and social contribution taxes

12,810

 

31,776

 

42,410

 

43,417

 

104,298

 

131,304

 

185,350

 

226,854

Taxes paid by installments

 

 

 

 

 

 

 

Tax installment payment Law 11,941/09

-

 

-

 

1,633

 

3,626

INSS (i)

36,064

 

37,195

 

36,061

 

36,578

CPMF (i)

10,271

 

9,306

 

12,547

 

11,701

Other (ii)

3,610

 

3,539

 

3,831

 

3,774

 

49,945

 

50,040

 

54,072

 

55,679

 

 

 

 

 

 

 

 

Total Current

154,243

 

181,344

 

239,422

 

282,533

 

 

 

 

 

 

 

 

Noncurrent

 

 

 

 

 

 

 

Taxes paid by installments

 

 

 

 

 

 

 

Tax installment payment Law 11,941/09 (iii)

1,104,880

 

1,079,635

 

1,207,334

 

1,175,632

INSS (i)

63,113

 

74,389

 

63,113

 

74,389

CPMF (i)

17,974

 

18,611

 

21,957

 

23,403

Other (ii)

19,821

 

20,212

 

20,909

 

21,327

Total Noncurrent 

1,205,788

 

1,192,847

 

1,313,313

 

1,294,751

 

 

 

 

 

 

 

 

Total

1,360,031

 

1,374,191

 

1,552,735

 

1,577,284

 

Tax payments by installments include the following amounts:

 

(i)     INSS, CPMF – The Company adhered to the Special Tax Payment Installments Program (“PAES”), pursuant to Law 10,680/2003, discontinuing few proceedings. The taxes included in this program is subject to the Long-Term Interest Rate – TJLP and may be payable within 120 months.

 

(ii)    Other – The Company adhered to the State and Municipal Tax Payment Installments Program (PPI). Taxes included in this program are adjusted by SELIC, and may be payable within 120 months.

 

(iii)   COFINS (Law 9,718/99), SEBRAE (Support Service for Entrepreneurs and Small-Sized Companies) Contribution and Offset of Social Security Contribution Debt – After legal advisors’ assessment, the Company’s Management decided to include these contingencies in the installment program set forth by Law 11,941/09 (REFIS).

 

 

16.   Provision for litigations

 

Provision for litigations is estimated by Management, supported by its legal counsel. Such provision was set up in an amount considered sufficient to cover losses considered probable by the Company’s legal counsel and is stated net of related judicial deposits, as shown below:

66


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

16.            Provision for litigations (Continued)

 

 

Parent Company

 

 

 

COFINS and PIS

 

Other

 

Labor

 

Civil and other

 

Total

 

 

 

 

 

 

 

 

 

 

Balance at June 30, 2010

36,249

 

45,114

 

-

 

35,546

 

116,909

Additions

-

 

4,157

 

7,190

 

828

 

12,175

Reversal/Payment

-

 

-

 

(6,362)

 

-

 

(6,362)

Monetary Restatement

859

 

1,241

 

1,823

 

648

 

4,571

Judicial Deposits

-

 

(11)

 

(2,651)

 

(11)

 

(2,673)

Balance at September 30, 2010

37,108

 

50,501

 

-

 

37,011

 

124,620

 

 

 

 

 

 

 

 

 

 

 

Consolidated

 

 

 

COFINS and PIS

 

Other

 

Labor

 

Civil and other

 

Total

 

 

 

 

 

 

 

 

 

 

Balance at June 30, 2010

97,412

 

48,154

 

22,169

 

116,502

 

284,237

Additions

1,229

 

6,132

 

11,467

 

5,222

 

24,050

Reversal/Payment

-

 

-

 

(13,423)

 

(1,533)

 

(14,956)

Transfer

(134)

 

16,139

 

(7,161)

 

(8,844)

 

-

Monetary Restatement

1,798

 

1,479

 

2,750

 

3,669

 

9,696

Judicial Deposits

-

 

1,452

 

(7,096)

 

(88)

 

(5,732)

Balance at September 30, 2010

100,305

 

73,356

 

8,706

 

114,928

 

297,295

 

a)  Taxes

 

Tax-related claims are indexed to the Central Bank Overnight Rate (“SELIC”), at 8.90% at September 30, 2010 (8.47% at June 30, 2010), and are subject, when applicable, to fines.

 

COFINS and PIS

 

With the non-cumulativeness treatment when calculating PIS and COFINS, the Company and its subsidiaries started calling into question the right to exclude the ICMS from the calculation basis of these two contributions.

 

Regarding the debt referring to the Cofins rate increase, the Company filed a lawsuit requesting to exclude the default charges in the consolidated debt from the federal installment payment, established by Law 11,941/09. Additionally, a Company’s subsidiary offset PIS and Cofins tax debits with IPI credits – inputs submitted to zero rate or tax exemption - acquired from third parties (transferred based on a final and unappealable court decision).

 

The claims amounts of PIS and COFINS at September 30, 2010 is R$100,305 (R$97,412 at June 30, 2010).

 

Other

 

The Company and its subsidiaries have other tax claims, which after analysis of its legal counsels, were deemed as probable losses or as issues likely to be booked, as ruled by CVM. These are: (i) tax assessment notices related to purchase, industrialization and sale of  soybean and byproducts exports (PIS, COFINS and IRPJ), (ii) disagreement on the non- application of Accident Prevention Factor (FAP) for 2010, (iii) disagreement on the “Fundo de Combate à Pobreza” (State Government Fund Against Poverty), enacted by the Rio de Janeiro State government (transferred from other civil claims this quarter), (iv) and other less relevant issues. The amount recorded at September 30, 2010 for these claims is R$44,044 (R$21,755 at June 30, 2010).

67


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

16.   Provision for litigations (Continued)

 

a)  Taxes (Continued)

 

In addition, the Company claims in court its right of not paying the contributions provided for by Complementary Law 110/2001 related to the FGTS (Government Severance Indemnity Fund for Employees) financing. The amount accrued at September 30, 2010 is R$38,935 (R$35,996 at June 30, 2010) and the Company made a R$9,623 (R$9,597 at June 30, 2010) judicial deposit.

 

b)  Labor claims

 

The Company is party to numerous lawsuits involving disputes with its employees, primarily arising from layoffs in the ordinary course of business. At September 30, 2010, the Company recorded a provision of R$84,927 (R$84,133 at June 30, 2010) referring to lawsuits whose risk of loss was considered probable and R$41,929 (R$42,907 at June 30, 2010), referring to lawsuits whose risk of loss is deemed as possible. Management, assisted by its legal counsels, evaluates these contingencies and provides for losses where reasonably estimable, bearing in mind previous experiences in relation to the amounts sought. Labor claims are indexed to the Referential Interest Rate (“TR”) (0.47% accumulated in the quarter ended September 30, 2010 and 0.19% at June 30, 2010) accrued of 1% monthly interest. The balance of the net provision for restricted judicial deposits is R$8,706 (R$22,169 at June 30, 2010).

 

c)  Civil and other

 

The Company is a defendant, at several judicial levels, in lawsuits of civil nature, among others. The Company’s Management sets up provisions in amounts considered sufficient to cover unfavorable court decisions when its internal and external legal counsels consider losses to be probable.

 

Among these lawsuits, we point out the following:

 

·       The Company files and answers various lawsuits in which it requests the review of lease amounts paid by the stores. In these lawsuits, the judge determines a provisional lease amount, which then is paid by the stores, until report and decision define the final lease amount. The set up provision of difference between the amount originally paid by the stores and that defined provisionally in these lawsuits. In other lawsuits, the Company recorded a provision for the difference between the amount paid as provisional rental and that one pleaded by adversary party, based on technical assistant’s report of the adversary party. At September 30, 2010, the accrual amount for these lawsuits is R$32,214 (R$29,261 at June 30, 2010), for which there are no judicial deposits.

 

·       The balance of Globex’s civil actions at September 30, 2010 was mainly composed of: (i) consumer lawsuits in the amounts R$11,387, (ii) provisions referring to the risk revaluation of action for damages of R$7,886, deriving from contractual termination proposed by former service provider; (iii) recording of a provision of R$19,765 in view of the contractual assumption of mandatory payment of a fee on behalf of shopping centers management companies, as a result of change in share control; (iv) recording of a provision of R$7,823 in order to deal with the indemnification risks deriving from the expectation of contractual termination with service providers.

 

68


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

16.  Provision for litigations (Continued)

 

Total civil actions and Other at September 30, 2010 is R$114,929 (R$116,502 at June 30, 2010), net of judicial deposits.

 

d) Other non-accrued contingent liabilities

 

The Company has other litigations which have been analyzed by the legal counsels and deemed as possible but not probable; therefore, have not been accrued, at September 30, 2010, as follows:

 

·       INSS (Social Security Tax) – The Company was served notice regarding the non-levy of payroll charges on benefits granted to its employees, and the loss, considered possible, corresponds to R$124,116 (122,887 at June 30, 2010). The proceedings are under administrative and court discussion. Out of this amount R$109,281 are guaranteed by real properties or bank guarantee.

 

·       IRPJ, IRRF and CSLL – The Company has several assessment notices regarding offsetting proceedings, rules on the deductibility of provisions and tax payment discrepancies. These proceedings await decision in the administrative and court level. The amount of which corresponds to R$265,069 (R$262,444 at June 30, 2010).

 

·       COFINS, PIS and CPMF – The Company has been called into question in motion for offsetting, tax payment discrepancies, in addition to the collection of taxes on soybean export operations. These proceedings await decision in the administrative and court level. The amount involved in these assessments is R$636,496 (R$627,048 at June 30, 2010).

 

·       ICMS – The Company was served notice by the state tax authorities regarding: (i) the appropriation of electricity credits, (ii) acquisitions from suppliers considered to be unfit according to the state treasury’s records, (iii) return of goods to its stores and (iv) refund of tax replacement without due compliance of ancillary obligations brought by CAT Ordinance 17 of the State of São Paulo, among others, not relevant. The total amount of these assessments is R$1,330,681 (R$1,267,599 at June 30, 2010), which await a final decision in the administrative and court levels.

 

 

·       ISS, Municipal Real Estate Tax (“IPTU”), Property Transfer Tax (“ITBI”) and other – These are related to assessments on third parties retention, IPTU payment discrepancies, fines due to non-compliance of ancillary obligations and sundry taxes, the amount of which is R$140,046 (R$136,098 at June 30, 2010) and await administrative and court decisions.

 

·       Other litigationsThey are related to administrative lawsuits and lawsuits under the civil court scope, special civil court, Consumer Protection Agency (“PROCON”) (in many states), Weight and Measure Institute (“IPEM”), National Institute of Metrology, Standardization and Industrial Quality (“INMETRO”) and National Health Surveillance Agency (“ANVISA”), amounting to R$86,104 (R$85,038 at June 30, 2010). 

 

·       In the subsidiary Globex, provisions were not set up for the contingent liabilities with probability of losses and amounted to R$224,158 at September 30, 2010 (R$232,447 at June 30, 2010).

 

 

69


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

16.  Provision for litigations (Continued)

 

d) Other non-accrued contingent liabilities (Continued)

 

Occasional adverse changes in the expectation of risk of the referred lawsuits may require that additional provision for litigations be set up. The aforementioned lawsuits were not included in REFIS (Tax Recovery Program).

 

 

e)  Appeal and judicial deposits

 

 

The Company is challenging the payment of certain taxes, contributions and labor-related obligations and has made court escrow deposits (restricted deposits) of corresponding amounts pending final court decisions, in addition to collateral deposits related to provisions for lawsuits.

 

 

The Company registered in its assets amounts related to judicial deposits not linked to the litigations recorded in liabilities.

 

 

f)   Guarantees

 

The Company has granted collaterals to some lawsuits of civil, labor and tax nature, as shown below:

 

Lawsuits

 

Real Properties

 

Equipment

 

Letter of Guarantee

 

Total

 

 

 

 

 

 

 

 

 

Tax

 

651,596

 

1,428

 

737,769

 

1,390,793

Labor

 

6,156

 

3,209

 

71,671

 

81,036

Civil and other

 

13,852

 

1,608

 

33,251

 

48,711

Total

 

671,604

 

6,245

 

842,691

 

1,520,540

 

 

The subsidiary Globex has banking letters of guarantee amounting to nearly R$37,346 at September 30, 2010.

 

70


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

 

17.   Income and Social Contribution Taxes

 

a)   Income and social contribution tax expense reconciliation

 

 

Parent Company

 

Consolidated

 

9.30.2010

9.30.2009

 

9.30.2010

9.30.2009

 

 

 

 

 

 

Earnings before income tax

408,388

441,226

 

434,667

455,317

Profit Sharing

(17,976)

(7,309)

 

(23,582)

(9,580)

 

 

 

 

 

 

Earnings before income tax

390,412

433,917

 

411,085

445,737

 

 

 

 

 

 

Income tax at nominal rate

(97,603)

(108,479)

 

(123,326)

(133,721)

Installment payment

-

77,117

 

(1,172)

68,855

Tax fines

(608)

-

 

-

-

Income tax incentives

311

-

 

824

-

Equity accounting and provision for

21,672

(850)

 

10,797

(1,444)

   capital deficiency of subsidiary

 

 

 

 

 

Other permanent differences (undeductible) and social contribution tax, net

(10,584)

(4,072)

 

(22,826)

41,035

 

 

 

 

 

 

Effective income tax

(86,812)

(36,284)

 

(135,703)

(25,275)

 

 

 

 

 

 

Income tax for the year

 

 

 

 

 

Current

(3,285)

(9,029)

 

(28,610)

(38,670)

On amortized goodwill (b(ii))

(77,323)

(77,323)

 

(81,670)

(81,250)

Deferred

(6,204)

50,068

 

(25,423)

94,645

 

 

 

 

 

 

Deferred income and social contribution tax expenses

(86,812)

(36,284)

 

(135,703)

(25,275)

 

 

 

 

 

 

Effective rate

22.2%

8.4%

 

33.0%

5.7%

 

 (ii)     At September 30, 2010, in compliance with CVM Ruling 371, the Company and its subsidiaries recorded deferred IRPJ and CSLL arising from tax loss carryforwards and temporary differences in the amount of R$262,595 (R$287,638 at June 30, 2010) in the Parent Company and R$1,270,043 (R$1,303,497 at June 30, 2010) in Consolidated.

 

71


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

17.   Income and Social Contribution Taxes (Continued)

 

b)   Breakdown of deferred income and social contribution tax balances

 

 

 

Parent Company

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

9.30.2010

 

6.30.2010

 

9.30.2010

 

6.30.2010

Deferred income tax asset

 

 

 

 

 

 

 

 

Tax losses (i)

54,384

 

60,551

 

610,480

 

583,357

 

Provision for litigations

42,674

 

40,580

 

105,270

 

 

116,637

 

Provision for hedge levied on a cash basis

(15,517)

 

(14,940)

 

17,585

 

18,162

 

Allowance for doubtful accounts

1,860

 

1,924

 

9,639

 

11,125

 

Goodwill

48,954

 

45,784

 

59,664

 

55,566

 

Tax benefit from the merger of Mandala

-

 

-

 

258,015

 

258,015

 

Deferred income tax under the effects of Law 11,638/07

12,959

 

13,916

 

57,846

 

5,959

 

Provision for deferred income tax on unamortized goodwill

(33,562)

 

(30,020)

 

(114,763)

 

(43,671)

 

Income tax on goodwill Vieri – Casino (ii)

130,678

 

156,452

 

130,678

 

156,452

 

Income tax on goodwill Sevilha – Assai (ii)

-

 

-

 

54,362

 

55,914

 

Provision for goodwill reduction

-

 

-

 

117,516

 

117,516

 

Other

20,165

 

13,391

 

69,947

 

74,661

 

Deferred income and social contribution tax assets

262,595

 

287,638

 

1,376,239

 

1,409,693

 

Provision for deferred income tax

   realization

-

 

-

 

(106,196)

 

(106,196)

 

 

 

 

 

 

 

 

 

Total deferred income tax assets

262,595

 

287,638

 

1,270,043

 

1,303,497

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets

134,868

 

88,743

 

228,788

 

196,541

Noncurrent Assets

127,727

 

198,895

 

1,041,255

 

1,106,956

 

Deferred income and social contribution tax assets

262,595

 

287,638

 

1,270,043

 

1,303,497

 

 

(i)   The recognition of deferred IRPJ and CSLL assets refer basically to tax loss carryforwards, acquired from Sé, and those generated by the subsidiary Sendas Distribuidora, realization of which, following restructuring measures, was considered probable, except for the provision for realization of deferred IRPJ shown in the previous table. 

 

At the Special Shareholders’ Meeting held at December 20, 2006, the Company's shareholders approved the merger operation of its parent company Vieri.  The special goodwill reserve, set up as a result of this merger, pursuant to paragraph 1 of article 6 of CVM Ruling 319/99, which, at the end of each fiscal year and to the extent that the tax benefit to be earned by the Company, as a result of goodwill amortization, represents an effective decrease of taxes paid by the Company, purpose of capitalization at the Company, to the benefit of controlling shareholders, without prejudice to the preemptive right ensured to other shareholders in the subscription of the capital increase resulting from the aforementioned capitalization, all pursuant to Article 7, caput and paragraphs 1 and 2 of CVM Ruling 319/99.  In order to allow for the improved presentation of the quarterly information, the goodwill net amount of R$128,872, which substantially represents the tax credit balance plus the amount of R$1,806, were classified as deferred IRPJ.  The net tax benefit as of September 30, 2010, totaled R$130,678 (R$156,452 at June 30, 2010).

 

 

72


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

17.   Income and Social Contribution Taxes (Continued)

 

(ii)   At the Special Shareholders’ Meeting held at March 31, 2008 and July 8, 2009, respectively, the reverse merger of Sevilha into Barcelona was approved.  Also, pursuant to CVM Ruling 319/99, a special goodwill reserve was created as a result of this merger.  At September 30, 2010, the net tax benefit recorded by Barcelona amounted the R$54,362. 

 

The Company prepares annual studies of scenarios and generation of future taxable income, which are approved by the Management and by the Board of Directors, indicating the capacity of benefiting from the established tax credit.

 

Based on these studies, the Company expects to recover these tax credits within a term of up to ten years, as follows:

 

 

Parent Company

 

Consolidated

 

9.30.2010

 

9.30.2010

 

 

 

 

Up to 12 months

134,868

 

228,788

From 13 to 24 months

65,787

 

155,105

From 25 to 48 months

45,829

 

173,607

From 49 to 60 months

16,111

 

170,412

Over 60 months

-

 

542,131

 

262,595

 

1,270,043

 

 

18.   Shareholders’ Equity

 

a)    Capital stock

 

       The subscribed and paid-up capital, as of September 30, 2010, is represented by 257,521 (257,454 at June 30, 2010) in thousands of registered shares with no par value, of which 99,680 (ditto at June 30, 2010) in thousands of common shares, 154,492 in thousands of class A preferred shares (151,076 at June 30, 2010) and 3,349 in thousands of class B preferred shares (6,698 at June 30, 2010).

 

       The Company is authorized to increase its capital stock up to the limit of 400,000 (in thousands of shares), regardless of the amendment to the Company’s Bylaws, by resolution of the Board of Directors, which will establish the issue conditions.

      

        

 

73


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

18.   Shareholders’ Equity (Continued)

 

·       The Board of Directors Meeting held on July 12, 2010, resolved on the capital increase amounting to R$941, by means of the issue of 67 thousand Class A preferred shares, in compliance with the exercise of the stock options according to the Company’s Stock Option Plan, observing the limit of authorized capital;

 

 

Breakdown of capital stock and number of shares:

 

 

 

 

 

 

 

 

 

 

 

Number of shares - thousand

 

Capital stock

 

Preferred

 

Common

At June 30, 2010

5,573,438

 

157,774

 

99,680

Capitalization of reserves

-

 

-

 

-

Goodwill special reserve

-

 

-

 

-

Profit

-

 

-

 

-

Share private subscription

-

 

-

 

-

Stock option plan

 

 

 

 

 

Series X

75

 

2

 

-

Series A1 Silver

65

 

3

 

-

Series A1 Gold

302

 

-

 

-

Series A2 Silver

-

 

11

 

-

Series A2 Gold

-

 

11

 

-

Series A3 Silver

383

 

14

 

-

Series A3 Gold

-

 

14

 

-

Series A4 Silver

116

 

2

 

-

Series A4 Gold

-

 

10

 

-

At September 30, 2010

5,574,379

 

157,841

 

99,680

 

       The table below shows the share transaction as a result of the exercise of stock options pursuant to the Company’s Stock Option Plans:

 

Meeting

Series

Number (thousand)

Unit price

Total

 

 

 

 

 

7/12/2010

Series X

2

40.28

75

7/12/2010

Series A1 Silver

3

24.63

65

7/12/2010

Series A2 Silver

11

26.93

302

7/12/2010

Series A2 Gold

11

0.01

0

7/12/2010

Series A3 Silver

14

27.47

383

7/12/2010

Series A3 Gold

14

0.01

0

7/12/2010

Series A4 Silver

2

46.49

116

7/12/2010

Series A4 Gold

10

0.01

0

 

 

 

 

 

 

Total at September 30, 2010

67

 

941

 

 

 

 

 

 

      

74


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

 

18.   Shareholders’ Equity (Continued)

 

b)    Share rights

 

       Class A preferred shares (“PNA”) are non-voting and entitle the following rights and advantages to its holders: (i) priority in the reimbursement of capital should the Company be liquidated; (ii) priority in the receipt of a non-cumulative annual minimum dividend of R$0.08 per share; (iii) right to receive a dividend 10% greater than the dividend attributed to common shares, including the preferred dividend paid pursuant to item (ii) above for the purposes of calculating the respective amount.

 

       Class B (“PNB”) preferred shares will entitle the following rights to its holders: (a) a fixed dividend of R$0.01 per share; and (b) priority in reimbursement should the Company be liquidated. PNB shares shall not have voting right. PNB shares may be converted into PNA shares, at the 1:1 ratio, observing the following terms: (i) 32% of PNB shares were converted at September 28, 2009; (ii) 28% of total PNB shares were converted into PNA shares at January 7, 2010; (iii) 20% of total PNB shares were converted into PNA shares at July 7, 2010, and (iv) 20% of total PNB shares will be converted into PNA shares at January 7, 2011.

 

c)     Recognized granted options

 

With the enactment of Law 11,638/07 the account “granted options” was created to recognize payments made to managers as compensation, pursuant to CPC 010.

 

d)    Revenue reserve

 

(i)    Legal reserve: is formed based on appropriations from retained earnings of 5% of net income of each year, limited to 20% of the capital.

 

(ii)   Expansion reserve: is formed based on appropriations of the amount determined by  shareholders to reserve funds to finance additional capital investments and working and current capital through the appropriation of up to 100% of the net income remaining after the appropriations determined by law and supported by capital budget, approved at meeting.

 

 

e)    Stock option plan for preferred shares

 

(i)   Original stock option plan

 

      The Company granted stock option plans for the purchase of preferred shares to the Management. Shares issued due to the exercise of stock option plans will grant its holders the same rights of existing PNA shares. The Stock Option Plans are managed by an internal committee designated by the Board of Directors.

 

      The granting price for each share is, at least, 60% of the weighted average price of the preferred shares traded in the week the option is granted.

 

     

75


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

18.  Shareholders’ Equity (Continued)

 

e)    Stock option plan for preferred shares (Continued)

 

(i)   Original stock option plan

 

 

The number of shares may vary for each beneficiary or series. The vesting right to exercise the option may occur as follows and according to the following terms: (i) 50% in the last month of third year subsequent to the granting date (1st tranche) and ii) until 50% in the last month of fifth year subsequent to the granting date (2nd tranche), and the remaining portion of the second tranche subject to restraint on alienation until the beneficiary’s retirement, as per formula defined in the regulation.

 

      Shares subject to restraint on alienation (Q), upon the options exercise are calculated using the following formula:

 

   Where:

 

Q =     Number of shares to be encumbered by restraint on alienation.

Q1 =   50% of the Company total shares on the granting date.

Pm =       Company share market price on the exercise date.

Pe =   Share original exercise price, determined on the granting date, observing the terms of the Plan.

 

The option price is updated by reference to the General Market Price Index – IGP-M variation to the date of its actual exercise, less dividends attributed for the period.

 

 (ii)  New stock option plan for preferred shares.

 

Pursuant to the resolutions at the Special Shareholders’ Meeting, held at December 20, 2006, the amendment to the Company’s Stock Option Plan was approved, and originally approved by the Special Shareholders’ Meeting held at April 28, 1997.

 

As of 2007, the granting of stock options to the Management and employees will take place as follows:

 

Shares will be classified as follows: Silver and Gold, and the quantity of Gold-type shares may be decreased and/or increased (reducer or accelerator), at the discretion of the Plan management committee, in the course of 35 months following the granting date.

 

The price for the Silver-type share will correspond to the average of trading closing price of the Company preferred shares occurred over the last 20 trading sessions of BOVESPA, prior to the date on which the Committee resolves on the granting of option, with a 20% discount. The price for the Gold-type share will correspond to R$0.01 and the granting of these options are additional to the Silver options, and the granting or the exercise of Gold options is not possible separately. In both cases, the prices will not be restated.

 

76


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

18.  Shareholders’ Equity (Continued)

 

e)    Stock option plan for preferred shares (Continued)

 

(ii)   New stock option plan for preferred shares (Continued)

 

The Silver and Gold options shall be effective as of the date of the respective agreement. The number of shares resulting from the Silver option is fixed (established in the agreement). The number of shares resulting from the Gold option is variable, establishing on the granting date a number of shares that may be increased or decreased, according to the ROIC verified at the end of the 36th month as of the granting date.

 

The calculation criteria to decrease and/or increase (reducer or accelerator) of the amount of options granted classified as “Gold” in each series of the Plan, according to the analysis of observance to the return on invested capital (ROIC) concept, under the following terms:

 

(a) Accelerator: from 3% for each 1% more than the return rate, increase by 0.5% the amount of shares granted classified as “Gold”.

(b) Reducer: from -3% for each 1% less than the return rate, decrease by 5% the amount of shares granted classified as “Gold”

 

At the Board of Directors Meeting held at May 7, 2010, the increase of the global limit of shares allocated to the Company's General Stock Option Plan was approved, from 10,118 thousand preferred class A shares to 11,618 thousand shares, an increase of 1,500 thousand new class A preferred shares.

 

Information on the stock option plans is summarized below:

 

 

Price

Lot of shares

 Series granted

Date granted

1st date of exercise

2nd date of exercise and expiration

On the date granted

End of the period

Number

of shares granted

Exercised

Not exercised by dismissal

Expired

Total in effect

Balance at September 30, 2010

 

 

 

 

 

 

 

Series X

7/07/2006

7/07/2009

7/07/2011

33.00

41.12

901

(227)

(399)

-

275

Series A1 – Gold

4/13/2007

4/30/2010

4/29/2011

0.01

0.01

326

(279)

(6)

-

41

Series A1 - Silver

4/13/2007

4/30/2010

4/29/2011

24.63

24.63

1,122

(898)

(105)

-

119

Series A2 - Gold

3/03/2008

4/30/2008

3/30/2012

0.01

0.01

848

(521)

(6)

-

321

Series A2 - Silver

3/03/2008

4/30/2008

3/30/2012

26.93

26.93

950

(599)

(7)

-

344

Series A3 – Gold

5/13/2009

5/31/2012

5/31/2013

0.01

0.01

668

(178)

-

-

490

Series A3 – Silver

5/13/2009

5/31/2012

5/31/2013

27.47

27.47

693

(198)

-

-

495

Series A4 – Gold

5/24/2010

5/31/2013

5/31/2014

0.01

0.01

524

(10)

-

-

514

Series A4 – Silver

5/24/2010

5/31/2013

5/31/2014

46.49

46.49

131

(2)

-

-

129

 

 

 

 

 

 

6,163

(2,912)

(523)

-

2,728

 

77


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

18.  Shareholders’ Equity (Continued)

 

e)    Stock option plan for preferred shares (Continued)

 

(ii)   New stock option plan for preferred shares (Continued)

 

 

Price

Lot of shares

 Series granted

Date granted

1st date of exercise

2nd date of exercise and expiration

On the date granted

End of the period

Number

of shares granted

Exercised

Not exercised by dismissal

Expired

Total in effect

Balance at June 30, 2010

 

 

 

 

 

 

 

Series IX

5/15/2005

5/15/2008

5/15/2010

26.00

29.86

989

(435)

(553)

(1)

-

Series X

7/07/2006

7/07/2009

7/7/2011

33.00

38.85

901

(225)

(387)

-

289

Series A1 -Gold

4/13/2007

4/30/2010

4/29/2011

0.01

0.01

326

(279)

(6)

-

41

Series A1 -Silver

4/13/2007

4/30/2010

4/29/2011

24.63

24.63

1,122

(895)

(104)

-

123

Series A2 -Gold

3/03/2008

4/30/2008

3/30/2012

0.01

0.01

848

(510)

(6)

-

332

Series A2 -Silver

3/03/2008

4/30/2008

3/30/2012

26.93

26.93

950

(588)

(7)

-

355

Series A3 -Gold

5/13/2009

5/31/2012

5/31/2013

0.01

0.01

668

(164)

-

-

504

Series A3 - Silver

5/13/2009

5/31/2012

5/31/2013

27.47

27.47

693

(184)

-

-

509

Series A4 -Gold

5/24/2010

5/24/2013

5/31/2014

0.01

0.01

524

-

-

-

524

Series A4 - Silver

5/24/2010

5/24/2013

5/31/2014

46.49

46.49

131

-

-

-

131

 

 

 

 

 

 

7,152

(3,280)

(1,063)

(1)

2,808

 

SERIES EXERCISED

At September 30, 2010

 

 

 

 

 

Series granted

Date granted

Date of exercise

Amount exercised

Exercise price

Total

Market price

Series X

7/7/2008

10/2/2009

223

38.54

8,594

50.32

Series X

7/7/2008

6/9/2010

2

39.73

60

57.20

Series X

7/7/2008

7/12/2010

2

40.28

75

62.79

Series A1 Gold

4/13/2007

7/10/2007

3

0.01

0

37.12

Series A1 Gold

4/13/2007

11/28/2007

11

0.01

0

28.54

Series A1 Gold

4/13/2007

12/17/2007

31

0.01

0

33.24

Series A1 Gold

4/13/2007

3/10/2008

43

0.01

0

34.83

Series A1 Gold

4/13/2007

5/27/2008

27

0.01

0

37.43

Series A1 Gold

4/13/2007

3/15/2010

2

0.01

0

59.80

Series A1 Gold

4/13/2007

6/9/2010

162

0.01

2

57.20

Series A1 Silver

4/13/2007

7/10/2007

11

24.63

271

37.12

Series A1 Silver

4/13/2007

11/28/2007

36

24.63

887

28.54

Series A1 Silver

4/13/2007

12/17/2007

70

24.63

1,724

33.24

Series A1 Silver

3/13/2007

3/10/2008

103

24.63

2,537

34.83

Series A1 Silver

4/13/2007

5/27/2008

84

24.63

2,069

37.43

Series A1 Silver

4/13/2007

6/10/2008

3

24.63

74

37.47

Series A1 Silver

4/13/2007

7/22/2008

2

24.63

49

36.97

Series A1 Silver

4/13/2007

9/11/2008

3

24.63

74

34.34

Series A1 Silver

 4/13/2007

4/1/2009

5

24.63

123

31.98

Series A1 Silver

4/13/2007

8/5/2009

3

24.63

74

46.35

Series A1 Silver

4/13/2007

10/2/2009

2

24.63

49

50.32

Series A1 Silver

4/13/2007

3/15/2010

10

24.63

252

59.80

Series A1 Silver

4/13/2007

6/9/2010

563

24.63

13,877

57.20

Series A1 Silver

4/13/2007

7/12/2010

3

24.63

65

62.79

Series A2 Gold

3/3/2008

3/10/2008

178

0.01

2

34.83

Series A2 Gold

3/3/2008

5/27/2008

78

0.01

1

37.43

Series A2 Gold

3/3/2008

6/10/2008

4

0.01

0

37.47

Series A2 Gold

3/3/2008

7/22/2008

13

0.01

0

36.97

Series A2 Gold

3/3/2008

9/11/2008

7

0.01

0

34.34

Series A2 Gold

3/3/2008

4/1/2009

30

0.01

0

31.98

Series A2 Gold

3/3/2008

8/5/2009

91

0.01

1

46.35

Series A2 Gold

3/3/2008

10/2/2009

47

0.01

0

50.32

Series A2 Gold

3/3/2008

3/15/2010

2

0.01

0

59.80

Series A2 Gold

3/3/2008

6/9/2010

60

0.01

1

57.20

Series A2 Gold

3/3/2008

7/12/2010

11

0.01

0

62.79

Series A2 Silver

3/3/2008

3/10/2008

187

26.93

5,036

34.83

Series A2 Silver

3/3/2008

5/27/2008

83

26.93

2,235

37.43

78


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

 

 

18.  Shareholders’ Equity (Continued)

 

e)    Stock option plan for preferred shares (Continued)

 

(ii)   New stock option plan for preferred shares (Continued)

 

 

Series granted

Date granted

Date of exercise

Amount exercised

Exercise price

Total

Market price

Series A2 Silver

3/3/2008

6/10/2008

6

26.93

162

37.47

Series A2 Silver

3/3/2008

7/22/2008

14

26.93

377

36.97

Series A2 Silver

3/3/2008

9/11/2008

8

26.93

215

34.34

Series A2 Silver

3/3/2008

4/1/2009

45

26.93

1,212

31.98

Series A2 Silver

3/3/2008

8/5/2009

96

26.93

2,585

46.35

Series A2 Silver

3/3/2008

10/2/2009

52

26.93

1,400

50.32

Series A2 Silver

3/3/2008

3/15/2010

3

26.93

61

59.80

Series A2 Silver

3/3/2008

6/9/2010

94

26.93

2,539

57.20

Series A2 Silver

3/3/2008

7/12/2010

11

26.93

302

62.79

Series A3 Gold

5/13/2009

3/15/2010

89

0.01

1

59.80

Series A3 Gold

5/13/2009

6/9/2010

75

0.01

1

57.20

Series A3 Gold

5/13/2009

7/12/2010

14

0.01

0

62.79

Series A3 Silver

5/13/2009

3/15/2010

109

27.47

2,997

59.80

Series A3 Silver

5/13/2009

6/9/2010

75

27.47

2,068

57.20

Series A3 Silver

5/13/2009

7/12/2010

14

27.47

383

62.79

Series A4 Gold

5/24/2010

7/12/2010

10

0.01

0

62.79

Series A4 Silver

5/24/2010

7/12/2010

2

46.49

115

62.79

 

 

 

2,912

 

52,550

 

 

Note: At June 9, 2010, series IX was terminated.

 

At September 30, 2010, the Company preferred share price at BOVESPA was R$58.35 per share.

 

At September 30, 2010 there were 232,586 treasury preferred shares which may be used as spread for the options granted in the plan.

 

(iii)   Consolidated information on the stock option plans - GPA

 

The chart below show the maximum percentage of interest dilution to which current shareholders will eventually be subject to in the event of exercise up to 2011 of all options granted:

 

 

9.30.2010

 

6.30.2010

Number of shares

257,520

 

257,454

Balance of granted series in effect

2,728

 

2,808

Maximum percentage of dilution

1.05%

 

1.08%

 

The market value of each option granted is estimated on the granting date, by using the options pricing model “Black&Scholes” taking into account the following assumptions: (a) expectation of dividends of 0.72%, (b) expectation of volatility of nearly 40.47% and (c) the risk-free weighted average interest rate of 9.66%. The expectation of average life of series X is 5 years, whereas for series A1, A2, A3 and A4 the expectation is 3 years

79


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

18.       Shareholders’ Equity (Continued)

e)    Stock option plan for preferred shares (Continued)

(iii)   Consolidated information on the stock option plans – GPA (Continued)

 

Period ended at June 30, 2010

Shares

Weighted average of exercise price

 

 

 

Outstanding at the beginning of the period

3,432

17.82

Granted during the period

657

37.08

Cancelled during the period

(5)

28.41

Exercised during the period

(1,275)

19.94

Expired during the period

(1)

26.00

Outstanding at the end of the period

2,808

21.54

 

 

 

Period ended at September 30, 2010

 

 

Outstanding at the beginning of the period

2,808

21.54

Granted during the period

-

-

Cancelled during the period

(13)

32.21

Exercised during the period

(67)

19.19

Outstanding at the end of the period

2,728

21.55

Technical Pronouncement CPC 10 – Share-based Payment determines that the effects of share-based payment transactions are recorded in income and in the Company’s balance sheet. The amounts recorded as income of Parent Company and Consolidated at September 30, 2010 were R$20,219 (R$18,507 at September 30, 2009).

 

 (iv)  Stock option plan of preferred shares - Globex

 

The subsidiary Globex granted a Stock Option Plan for the purchase of shares for Management, approved by the Special Shareholders’ Meeting held at January 4, 2008 and rectified at the Annual and Special Shareholders’ Meeting held on April 29, 2008.

 

The Plan aims to: promote the expansion and the successful development of Globex’s purposes, allowing top management and employees to buy shares issued by Globex, fomenting their integration with the company; (ii) attract top management and employees to provide services to Globex, by offering them the additional advantage of becoming Globex’s shareholders; (iii) align the interests of the top management and employees, offering as an incentive and additional advantage the possibility of becoming Globex’s shareholders; and (iv) promote a higher integration of these executives and employees with Globex’s objectives.

 

Statutory officers and employees approved by Globex’s Board of Directors are eligible to participate in the Plan (“Beneficiaries”). Pursuant to Article 171, paragraph 3 of Law 6,404/76, they shall not have preemptive right in the granting or in the exercise of stock options derived from the Plan. The shares resulting from the option exercise will have the rights set forth according to the Plan and the respective programs and agreement. They always will be entitled to receive the dividends to be distributed from the subscription or acquisition, where applicable. Once exercised the option by Beneficiary, the corresponding shares will be purpose of issue by means of Globex’s capital increase. Treasury stock options may also be tendered, by means of notice to the Brazilian Securities and Exchange Commission – CVM. The options granted based on the Plan are individual and non-transferable. The Plan took effect with its approval at the General Meeting and may be extinguished, at any time, by decision of the Board of Directors. The option may be exercised fully or partially during the term and within the periods established in the respective program. According to the Plan, the options granted account for, at most 1,794,880 common shares issued by Globex and the exercise price of R$25.35 for Program 1 and R$17.02 for Program 2 (reverse split defined as “2008 Programs”).

80


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

18.   Shareholders’ Equity (Continued)

e)    Stock option plan for preferred shares (Continued)

 

(iv)   Stock option plan of preferred shares – Globex (Continued)

 

 

9.30.2010

 

6.30.2010

Number of shares

124,381,409

 

124,381,409

Balance of granted series in effect

1,794,880

 

1,794,880

Maximum dilution percentage(1)

1.42%

 

1.42%

(1) Maximum dilution percentage of Globex shares

 

The fair value of “2008 Programs” was calculated based on the Black & Scholes valuation model, taking into account the following assumptions: (a) expected volatility of 47.6%; (b) duration of the program of 3.46 years; (c) risk-free rate from 11.18% to 13.65%; (d) dividend yield of 0%; and (e) option fair value on the granting date from R$17.57 to R$21.00.

 

The table below shows the amounts per lot recognized in the Company’s results, under operating expense against an increase in shareholders’ equity as well as the amounts to be recognized in subsequent years.

 

 

Expenses incurred and to be incurred by the Parent Company in the years ended December 31

Stock Option Plan

2008

2009

2010

2011

Share-based Payment

 

 

 

 

1st tranche

3,436

2,995

-

-

2nd tranche

2,425

3,126

2,118

-

3rd tranche

1,946

2,514

2,514

1,699

 

7,807

8,635

4,632

1,699

 

Due to a reduction in the eligible staff, the share-based compensation was reduced. Therefore, the amounts referring to unexpired expenses were adjusted. The expenses recorded until the withdrawal of eligible employees were not reversed and have been accounted for on a retrospective basis.

 

The chart below shows the new amounts to be considered.

 

 

Expenses incurred and to be incurred by the Parent Company in the years ended December 31

Stock Option

2009

2010

2011

 

 

 

 

Share-based payment

 

 

 

1st tranche

1,498

-

-

2nd tranche

1,810

458

-

3rd tranche

1,573

241

321

 

4,881

699

321

 

The first exercise date of said option was September 2009. In the period ended September 30, 2010, the amount of R$567 (R$4,246 at September 30, 2009) was recorded in the Company’s results.

 

81


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

18.   Shareholders’ Equity (Continued)

 

(v)    Stock option plan of preferred shares - Ponto Frio.com

 

 

At August 1, 2008, the subsidiary Globex concluded the negotiations to implement a partnership with a view to restructuring and developing its e-commerce and telesales activities for end consumers. Pursuant to the agreements executed, these activities now are performed by an independent company called PontoFrio.com Comércio Eletrônico S.A. ("PontoFrio.com"). In order to align the parties’ long-term interests, executives of PontoFrio.com (and eventual new beneficiaries) were granted PontoFrio.com’s stock options, whose exercise would result in executives’ maximum interest of 14% in the capital stock, in the event they are fully exercised.

 

According to the Options Plan executed, the stock options benchmark is the amount of R$15.71 per share, adjusted by CDI variation or IPCA accrued of six per cent (6%) p.a., whichever is the shortest, as of that date. The executives will be entitled to exercise the Stock Options divided into five (5) tranches, each one may be exercised as of the end of each twelve (12)-month period as of the date of the Agreement for the Granting of Stock Options.

 

According to clause 4.5 of the Operational Agreement, in the assumption of sale of Globex's control, fact of which took place at July 7,2009, the schedule for the vesting right to exercise the stock options is changed, as per the following schedule:

 

 

 

Ponto Frio.com

 

 

Term

 

Percentage

 

 

 

 

 

1st tranche

 

As of this present date and 24 months

 

30%

2nd tranche

 

After 24th month

 

20%

3rd tranche

 

After 36th month

 

20%

4th tranche

 

After 48th month

 

15%

5th tranche

 

After 60th month

 

15%

 

The fair value of the Stock Option Plan of PontoFrio.com was calculated based on the Black & Scholes option valuation model, considering the following assumptions: (a) expected volatility of 52.98%; (b) duration of the program of 5 years; (c) risk-free rate of 12.92%; (d) dividend yield of 0%; and (e) option fair value on the granting date from R$2.50 to R$4.26.

 

The chart below shows the amounts per lot recognized in PontoFrio.com’s results, under operating expenses against a shareholders’ equity increase, as well as the amounts to be recognized in subsequent years.

 

 

Expenses incurred and to be incurred by the Company

in the years ended December 31

Stock Option

2009

2010

2011

2012

 

 

 

 

 

Share-based payment

 

 

 

 

1st tranche

1,717

-

-

-

2nd tranche

1,360

793

-

-

3rd tranche

980

980

572

-

4th tranche

590

590

590

344

5th tranche

501

501

501

501

 

5,148

2,864

1,663

845

 

82


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

 

18.       Shareholders’ Equity (Continued)

 

At September 30, 2010, the amount of R$4,523 (R$7,219 at September 30, 2009) was recorded in the Company’s results.

 

g)    Dividends

 

At August 3, 2009, the Company’s Board of Directors approved the adoption of a new dividend policy, which consists of the payment of interim dividends, on a quarterly basis, and these payments shall be approved by the General Meeting, pursuant to paragraph 3 of article 35 of the Company’s Bylaws.

 

The Board of Directors Meeting held at May 7, 2010 approved the amount to be paid in advance on a quarterly basis in 2010, i.e., R$0.08 per Class A preferred share and R$0.072727272 per common share, as interim dividends, according to the Company’s Dividend Policy. The interim dividend payment dates will be defined by the Board of Directors after the publication of the quarterly information for the period. For the fourth quarter, after the end of the fiscal year and approval of the corresponding financial statements, the Company will pay the mandatory minimum dividend to shareholders, calculated pursuant to the Brazilian Corporation Law, less dividend prepaid during the fiscal year.

 

In the first quarter of 2010, the amount of R$19,215 of interim dividends was prepaid at May 31, 2010. At August 17, 2010, R$19,590 was prepaid as dividends for the second quarter of 2010.

 

19.   Management Compensation

 

The expenses related to the compensation of Management’s key personnel (officers appointed pursuant to Bylaws and Board of Directors), which were recorded in the earnings of subsidiary and in consolidated for the quarters ended at September 30, 2010 and 2009, are as follows:

 

 

Parent Company

 

Consolidated

 

9.30.2010

 

9.30.2009

 

9.30.2010

 

9.30.2009

 

 

 

 

 

 

 

 

Amounts recorded in income

 38,219

 

32,739

 

62,560

 

34,546

 

Out of this total, it is worth mentioning that the portion equivalent to 20.06% of September 30, 2010 amount and the portion equivalent to 20.89% of September 30, 2009 amount in the parent company and 14.28% and 19.80% in the consolidated, respectively, refer to the stock option plan.

83


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

 

20.   Net Financial Income

 

 

Quarter ended

 

Parent Company

 

Consolidated

 

9.30.2010

 

9.30.2009

 

9.30.2010

 

9.30.2009

 

 

 

 

 

 

 

 

Interest on financial debts

(191,322)

 

(145,775)

 

(185,677)

 

(248,386)

Discount of Receivables

(63,456)

 

(53,861)

 

(63,795)

 

(230,119)

Bank rate/ leasing

(78,757)

 

(51,331)

 

(66,516)

 

(83,429)

Interest on financial assets

84,044

 

75,494

 

91,483

 

102,505

Other financial revenues

45,386

 

56,192

 

10,564

 

(7,271)

Mark to Market

(2,489)

 

9,462

 

16,957

 

1,516

 

(206,595)

 

(109,821)

 

(196,984)

 

(465,184)

 

21.   Other Operating Revenues and Expenses

 

 

Parent Company

 

Consolidated

 

 

 

 

 

 

 

 

 

9.30.2010

 

9.30.2009

 

9.30.2010

 

9.30.2009

 

 

 

 

 

 

 

 

Tax installment payment (i)

(19,257)

 

-

 

(77,263)

 

-

Indemnifiable liabilities (ii)

(55,490)

 

-

 

29,649

 

-

Assets written-off/discontinued projects (iii)

-

 

-

 

7,091

 

-

Restructuring

(6,348)

 

-

 

(730)

 

-

Net revenue – Itaú Agreement

-

 

461,951

 

-

 

600,000

Provision for possible claims, net of gains from the fine and interest amnesty – Law 11,941/09

-

 

(277,882)

 

-

 

(340,226)

Reversal of provision for court claims

-

 

107,532

 

-

 

107,532

Tax credits write-offs

-

 

(228,296)

 

-

 

(331,235)

Business combination expenses

-

 

(23,489)

 

-

 

(23,487)

Permanent assets result

(3,689)

 

(208)

 

3,974

 

3,862

Other

(4,797)

 

(32,195)

 

(16,538)

 

(47,752)

 

 

 

 

 

 

 

 

Total

(89,581)

 

7,413

 

(53,817)

 

(31,306)

 

(i)      Mainly composed of ICMS installment payment (Note 16d).

 

(ii)     Recording of Indemnifiable liabilities referring to the “First Addendum to the Partnership Agreement” executed between Globex, GPA and Casas Bahia, which ensures Globex the right of being indemnified by GPA of certain contingencies recognized to be owed by Globex as of June 30, 2010. This operation has caused no effects in the consolidated results, considering the corresponding effect under Deferred Income and Social Contribution Taxes.

(iii)    In the first quarter of 2010, the Management carried out operational and technological reviews of its management system, which indicated the partial utilization of licenses which were accrued for losses in 2009. In view of this evidence, the Management reversed R$7,091 of said provision.

 

 

 

 

84


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

22.   Insurance coverage

 

Coverage at September 30, 2010 is considered sufficient by Management to meet possible losses and is summarized as follows:

 

 

 

 

 

Coverage amount

Insured assets

 

Risks covered

 

Parent Company

 

Consolidated

 

 

 

 

 

 

 

Property and equipment and inventories

 

Named risks

 

5,185,560

 

8,453,802

Profit

 

Loss of profits

 

1,414,364

 

2,395,808

 

The Company also holds specific policies covering civil and management liability risks in the amount of R$141,260 (R$146,625 at June 30, 2010). The information above was not audited by independent auditors.

 

 

23.   Leasing operations

 

a)  Operating lease liabilities

 

The installment payments of leasing (excluding costs of services, such as insurance and maintenance) classified as operating lease agreement are recognized as expenses, on a straight-line basis, during the term of the respective leasing. The Management considers operating lease (rental) of stores, in which there are no transfers of risks and benefits for the Company.

85


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

23.   Leasing operations (Continued)

 

 

Parent Company

 

Consolidated

 

9.30.2010

 

6.30.2010

 

9.30.2010

 

6.30.2010

Gross liabilities from operating leasing – minimum lease payment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less than 1 year

295,817

 

293,498

 

479,685

 

465,274

 

 

 

 

 

 

 

 

Over 1 year and less than 5 years

1,009,079

 

1,001,310

 

1,478,920

 

1,468,844

 

 

 

 

 

 

 

 

Over 5 years

1,649,029

 

1,647,992

 

2,172,737

 

2,179,216

 

 

 

 

 

 

 

 

 

2,953,925

 

2,942,800

 

4,131,342

 

4,113,334

 

The Company believes that the minimum payment of non-cancellable operating leasing refers to the contractual period of the regular course of the going concern. This liability is stated in the chart above, as required by CPC 06, although all the agreements have fine clause, which varies from one to six months of rental. The Company’s liability to terminate all the agreements amounts to R$119,921.

 

(i)     Contingent payments

 

The Management considers additional amounts paid as variable rental as contingent payments, defined by leasing agreement clause, corresponding to 0.5% and 2.5% over sales of the respective store.

 

 

 

Parent Company

 

Consolidated

 

9.30.2010

 

9.30.2009

 

9.30.2010

 

9.30.2009

 

 

 

 

 

 

 

 

Contingent payments recognized as expense during the period

 

193,326

 

185,676

 

 

305,369

 

248,909

 

(ii)    Option conditions to renew or purchase and adjustment clauses

 

The terms of the Company’s rental agreements for the quarter ended September 30, 2010 vary between 5 and 25 years and the agreement may be renewed according to the specific law. Agreements are periodically adjusted according to inflation indexes.

 

b)  Financial lease liabilities

 

Leasing agreements classified as financial leasing amount to R$165,831 at September 30, 2010 (R$169,063 at June 30, 2010) for the Parent Company and for the Consolidated, R$222,738 at September 30, 2010 (R$229,917 at June 30, 2010), according to the chart below:

86


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

23.   Leasing operations (Continued)

 

 

Parent Company

 

Consolidated

 

9.30.2010

 

6.30.2010

 

9.30.2010

 

6.30.2010

Gross liabilities from financial leasing – minimum lease payments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less than 1 year

12,661

 

14,995

 

27,737

 

30,264

 

 

 

 

 

 

 

 

Over than 1 year and less than 5 years

13,380

 

12,638

 

27,704

 

30,147

 

 

 

 

 

 

 

 

Over 5 years

30,019

 

30,166

 

38,232

 

38,467

 

 

 

 

 

 

 

 

Present value of financial lease agreements

56,060

 

57,799

 

93,673

 

98,878

 

 

 

 

 

 

 

 

Future financial charges on financial leasing

109,771

 

111,264

 

129,101

 

131,039

 

 

 

 

 

 

 

 

Gross value of financial lease agreements

165,831

 

169,063

 

222,775

 

229,917

 

 

(i)     Contingent payments

 

The Management considers additional amounts paid as variable rental as contingent payments, defined in the clauses of the rental agreements, corresponding to 0.5% and 2.5% over sales.

 

 

Parent Company

 

Consolidated

 

9.30.2010

 

9.30.2009

 

9.30.2010

 

9.30.2009

 

 

 

 

 

 

 

 

Contingent payments recognized as expenses during the year

 

2,529

 

2,444

 

 

3,950

 

3,782

 

 

(ii)    Option conditions to renew or purchase and adjustment clauses

 

The terms of the Company’s rental agreements in the quarter ended at September 30, 2010 vary between 5 and 25 years and the agreement may be renewed according to the specific law.

 

For leasing operations which cannot be cancelled with purchase option clause by residual value, and option of which will be certainly exercised, the Company takes into account the amount necessary to exercise said option for the purpose of calculating the monthly amortization amount, considering depreciation rates varying between 5% and 20%. The measurement of values is in line with CPC 06.

 

 

24.   Private Pension Plan of Defined Contribution

 

The Company maintains a supplementary private pension plan of defined contribution to meet the needs of its employees, by contracting the financial institution Brasilprev Seguros e Previdência S.A. for management purposes. When establishing the Plan, the Company provides monthly contributions on behalf of its employees on account of services rendered to the Company. Contributions made by the Company at September 30, 2010, amounted to R$1,725 (R$1,426 at September 30, 2009), employees’ contributions amounted to R$2,535 (R$2,186 at September 30, 2009) with 899 participants (848 at September 30, 2009).

87


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

 

25. Statement of EBITDA – Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) (unaudited)

 

 

Parent Company

 

 

 

 

 

 

 

 

 

3Q10

 

3Q09

 

9.30.2010

 

9.30.2009

 

 

 

 

 

 

 

 

Operating income

160,244

 

140,502

 

408,388

 

441,226

 

 

 

 

 

 

 

 

(+) Net financial expenses

75,639

 

24,008

 

206,594

 

109,821

(+) Equity accounting

(13,054)

 

34,343

 

(86,687)

 

3,401

(+) Depreciation and amortization

90,451

 

85,452

 

267,930

 

249,930

(+) Other operating income

13,252

 

(7,306)

 

89,581

 

(7,413)

 

 

 

 

 

 

 

 

EBITDA

326,532

 

276,999

 

885,806

 

796,965

Net revenue from sales

3,675,196

 

3,484,001

 

11,277,232

 

10,114,407

% EBITDA

8.9%

 

8.0%

 

7.9%

 

7.9%

 

 

 

 

Consolidated

 

 

 

 

 

 

 

 

 

3Q10

 

3Q09

 

9.30.2010

 

9.30.2009

 

 

 

 

 

 

 

 

Operating income

171,815

 

137,168

 

434,667

 

455,317

 

 

 

 

 

 

 

 

(+) Net financial expenses

191,725

 

64,711

 

465,185

 

196,984

(+) Equity accounting

(11,741)

 

(1,588)

 

(35,990)

 

(8,884)

(+) Depreciation and amortization

128,439

 

122,931

 

381,075

 

336,446

(+) Other operating income

13,224

 

26,775

 

53,817

 

27,562

 

 

 

 

 

 

 

 

EBITDA

493,462

 

349,997

 

1,298,754

 

1,007,425

Net revenue from sales

7,100,355

 

6,151,015

 

21,051,753

 

15,799,311

% EBITDA

6.9%

 

5.7%

 

6.2%

 

6.4%

88


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

06.01 – NOTES TO THE FINANCIAL STATEMENTS

 

26.  Statement of Value Added

 

 

Parent Company

 

 

Consolidated

 

Description

9.30.2010

%

9.30.2009

%

 

9.30.2010

%

9.30.2009

%

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

Sales of goods

12,506,704

 

11,382,408

 

 

23,540,650

 

17,864,000

 

Losses with doubtful accounts

(5,274)

 

(9,887)

 

 

(3,419)

 

(15,367)

 

Other revenues/expenses

(10,616)

 

65,637

 

 

69,528

 

76,198

 

 

12,490,814

 

11,438,158

 

 

23,606,759

 

17,924,831

 

Inputs acquired from third parties

 

 

 

 

 

 

 

 

 

Cost of goods sold

(9,023,833)

 

(7,514,590)

 

 

(17,729,405)

 

(13,009,964)

 

Materials, electricity, third parties’ services and other

(983,329)

 

(849,870)

 

 

(1,819,698)

 

(1,242,927)

 

 

(10,007,162)

 

(8,364,460)

 

 

(19,549,103)

 

(14,252,891)

 

 

 

 

 

 

 

 

 

 

 

Gross added value

2,483,652

 

3,073,698

 

 

4,057,657

 

3,671,940

 

 

 

 

 

 

 

 

 

 

 

Retentions

 

 

 

 

 

 

 

 

 

Depreciation and amortization

(267,930)

 

(249,930)

 

 

(381,075)

 

(336,446)

 

 

 

 

 

 

 

 

 

 

 

Net added value produced by entity

2,215,722

 

2,823,768

 

 

3,676,582

 

3,335,494

 

 

 

 

 

 

 

 

 

 

 

Received in transfer

 

 

 

 

 

 

 

 

 

Equity accounting

86,687

 

(3,401)

 

 

35,990

 

8,884

 

Minority interest

-

 

-

 

 

28,218

 

(22,829)

 

Financial revenues

182,218

 

179,076

 

 

221,774

 

193,438

 

 

268,905

 

175,675

 

 

285,982

 

179,493

 

 

 

 

 

 

 

 

 

 

 

Total added value to distribute

2,484,627

 

2,999,443

 

 

3,962,564

 

3,514,987

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employees

994,668

40%

868,433

29.0%

 

1,628,260

41.1%

1,269,545

 36.1%

   Salaries

680,047

27.4%

592,680

19.8%

 

1,144,993

28.9%

894,974

25.5%

Profit sharing

17,976

0.7%

7,309

0.2%

 

29,582

0.7%

9,580

0.3%

Benefits

236,783

9.5%

216,681

7.2%

 

353,947

8.9%

292,881

8.3%

FGTS

59,862

2.4%

51,763

1.7%

 

99,738

2.5%

72,110

2.1%

Taxes, fees and contributions

564,781

22.7%

1,232,397

41.1%

 

859,680

21.7%

1,075,787

30.6%

   Federal

322,198

13.0%

674,386

22.5%

 

538,512

13.6%

522,000

14.9%

State

186,506

7.5%

510,049

17.0%

 

213,254

5.4%

460,124

13.1%

Municipal

56,077

2.3%

47,962

1.6%

 

107,914

2.7%

93,663

2.7%

Financiers

621,578

25.0%

500,980

16.7%

 

1,171,024

29.6%

772,022

22.0%

   Interest

388,812

15.6%

288,896

9.6%

 

686,957

17.3%

387,309

11.0%

Rentals

232,766

9.4%

212,084

7.1%

 

484,067

12.2%

384,713

10.9%

Dividends

-

0.0%

-

0.0%

 

-

0.0%

-

0.0%

Profit retention

303,600

12.2%

397,633

13.3%

 

303,600

7.7%

397,633

11.3%

 

 

 

 

 

 

 

 

 

 

Total added value distributed

2,484,627

 

2,999,443

 

 

3,962,564

 

3,514,987

 

 

27.Subsequent Event                  

 

On October 19, 2010, the Board of Directors of the Company approved the terms of receivables securitization fund ("Globex FIDC") as agreed at its meeting on 1 December 2009 whose purpose is to acquire credit rights  originated by the Company and / or companies controlled. The implementation of the FDIC is conditional upon registration of the offering in the “Comissão de Valores Mobiliários”, which should happen later in November of this year.          

 

Partnership with Casas Bahia

 

The effects referring to the Partnership Agreement between GPA and Casa Bahia are mentioned in the Note 1(e).            

89


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

07.01 – COMMENTS ON THE COMPANY PERFORMANCE DURING THE QUARTER

 

 

See Item 12.01 - Comments on the consolidated performance during the quarter

 
 

90


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

12.01 – COMMENTS ON THE CONSOLIDATED PERFORMANCE DURING THE QUARTER

 

São Paulo, Brazil, November 10, 2010 – Grupo Pão de Açúcar(BM&FBOVESPA: PCAR5; NYSE: CBD) announces its results for the 3rd quarter of 2010 (3Q10). The Company’s operating and financial information was prepared in accordance with the accounting practices adopted in Brazil and Brazilian Corporate Law, and is presented in Brazilian Reais, as follows: (i) on a consolidated basis, which includes the full operating and financial results of Sendas Distribuidora and Assaí Atacadista and, as of the third quarter of 2009, Globex Utilidades S.A.; and (ii) on a GPA Food basis, which entirely excludes the operating and financial results of Globex Utilidades S.A., pursuant to current Corporate Law (Law 6404). All comparisons are with the third quarter of 2009 (3Q09), except where stated otherwise. The information about the 3Q09 and 9M09 has not been reviewed by the auditors.

 

 

In 3Q10, consolidated gross sales totaled R$7,939.6 million and 

EBITDA stood at R$493.5 million, 41.8% up on 3Q09, with EBITDA margin of 7.0%

 

 

CONSOLIDATED

  • GPA’s consolidated gross sales totaled R$7,939.6 million in 3Q10, 15.6% up on 3Q09, while net sales came to R$7,100.4 million, up by 16.6%. 
     
  • Consolidated EBITDA reached R$493.5 million, a 41.8% year-on-year improvement and 24.9% higher than the previous quarter, accompanied by an EBITDA margin of 7.0%.


  • The consolidated result of FIC, expressed through equity income, amounted to R$11.7 million in the quarter. 
     
  • Consolidated net income totaled R$115.1 million. Adjusted net income excluding non-recurring effects reached R$132.6 million and net margin of 1.9%.

 

 

 

Also in 3Q10, GPA Food’s gross and net sales grew by

10.0% and 10.1% respectively

 

 

 

 

 

GPA FOOD

  • Gross sales totaled R$6,219.4 million in 3Q10, while net sales came to R$5,585.9 million, respective year-on-year growth of 10.0% and 10.1%. 
      
  • In same-store(1) terms, gross sales moved up by 7.7%.  
     
  • Gross profit came to R$1,443.9 million, 12.1% higher than in 3Q09, with a gross margin of 25.9%. 


  • EBITDA stood at R$416.4 million in absolute terms, a 16.9% improvement over 3Q09, with an EBITDA margin of 7.5%, versus 7.0% in 3Q09. 
     
  • Assaí’s EBITDA came to R$25.6 million in 3Q10, a 46.9% year-on-year improvement, with a margin of 3.5%.
     
  • GPA’s net income totaled R$138.0 million. Adjusted net income excluding non-recurring effects reached R$143.6 million, with a margin of 2.6%

 

 

 

 

 


91


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

12.01 – COMMENTS ON THE CONSOLIDATED PERFORMANCE DURING THE QUARTER

 

(1)        Same-store concept - includes only those stores that have been operational for at least 12 months, therefore including the Ponto Frio stores as of this quarter.

Financial and Operating Highlights
  3Q10
consolidated
( inc. Globex)


3Q09
consolidated
( inc. Globex)


Chg.

9M10
consolidated
( inc. Globex)


9M09
consolidated
( inc. Globex)


Chg.
 
(R$ million)(1) 
Gross Sales  7,939.6  6,866.3  15.6%  23,540.7  17,799.0  32.3% 
Net Sales  7,100.4  6,088.2  16.6%  21,051.8  15,736.5  33.8% 
Gross Profit  1,744.2  1,448.3  20.4%  5,051.4  3,891.9  29.8% 
Gross Margin - %  24.6%  23.8%  80 bps(2)  24.0%  24.7%  -70 bps(2) 
Total Operating Expenses  1,250.8  1,100.2  13.7%  3,752.6  2,886.5  30.0% 
% of Net Sales  17.6%  18.1%  -50 bps(2)  17.8%  18.3%  -50 bps(2) 
EBITDA  493.5  348.1  41.8%  1,298.8  1,005.5  29.2% 
EBITDA Margin - %  7.0%  5.7%  130 bps(2)  6.2%  6.4%  -20 bps(2) 
Income before Income Tax  171.8  127.3  35.0%  434.7  445.4  -2.4% 
Net Income  115.1  164.6  -30.1%  303.6  391.2  -22.4% 
Net Margin - %  1.6%  2.7%  -110 bps(2)  1.4%  2.5%  -110 bps(2) 
(1) Totals may not tally as the figures are rounded off.
(2) basis points

 

 

 

Sales performance

Gross sales grew by 10.0% in the quarter

 

GPA FOOD

(R$ million)(1)  3Q10  
( exc. Globex) 
 3Q09 
( exc. Globex) 
 Chg.   9M10 
( exc. Globex) 
 9M09 
( exc. Globex) 
 Chg. 
Gross Sales  6,219.4  5,652.3  10.0%  18,849.6  16,585.0  13.7% 
Net Sales  5,585.9  5,074.3  10.1%  16,943.8  14,722.6  15.1% 
(1) Totals may not tally as the figures are rounded off             

 

In the third quarter of 2010, Grupo Pão de Açúcar’s gross sales increased by 10.0% over the same period last year to R$6,219.4 million, while net sales climbed by 10.1% to R$5,585.9 million.

In same-store terms (i.e. stores that have been operational for at least 12 months), gross sales grew by 7.7%, giving real growth of 3.0% when deflated by the IPCA consumer price index. Net sales recorded nominal growth of 7.8%.

Also on a same-store basis, gross food sales grew by 7.6% in the period, with beverages and personal care & household cleaning products doing particularly well. Non-food sales climbed by 7.8%, led by the general merchandise and textile category, which recorded higher increases than the non-food average.

It is worth noting that same-store non-food sales would have moved up by 13.1% if fuel sales, which fell by 11.6% year-on-year and accounted for 4% of total sales, had been excluded.

92


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

12.01 – COMMENTS ON THE CONSOLIDATED PERFORMANCE DURING THE QUARTER

 

The Group’s best-performing formats were Assaí and Extra Supermercados, which posted gross same-store sales growth of 19.6% and 24.1% respectively, thanks to a higher customer flow and an increase in the average ticket. In addition, new strategies to increase the number of products per ticket were implemented in all formats.

In the first nine months of 2010, GPA reported gross sales of R$18,849.6 million and net sales of R$16,943.8 million, 13.7% and 15.1% up, respectively, on the first nine months of 2009.

In same-store terms, gross sales climbed by 10.4%, giving real growth of 5.2% when deflated by the IPCA, while net sales recorded nominal growth of 11.7%. Sales of food and non-food products increased by 9.6% and 13.1%, respectively. 

In 4Q10, the Company reaffirmed its commitment to its GPA Food gross sales guidance of R$26.0 billion in 2010.

CONSOLIDATED

  3Q10
consolidated
(inc. Globex) 
3Q09
consolidated
(inc. Globex) 
Chg. 9M10
consolidated
(inc. Globex) 
9M09
consolidated
(inc. Globex) 
Chg.
 
(R$ million)(1) 
Gross Sales  7,939.6  6,866.3  15.6%  23,540.7  17,799.0  32.3% 
Net Sales  7,100.4  6,088.2  16.6%  21,051.8  15,736.5  33.8% 
(1) Totals may not tally as the figures are rounded off

In the third quarter, GPA’s consolidated gross sales grew by 15.6% year-on-year to R$7,939.6 million, while net sales moved up by 16.6% to R$7,100.4 million. 

In same-store terms(4) (i.e. stores that have been operational for at least 12 months, therefore including those Ponto Frio stores that meet this criterion as of this quarter), gross sales grew by 12.5%, giving real growth of 7.2% when deflated by the IPCA. Net sales recorded nominal growth of 13.1% year-on-year.

In the first nine months, GPA recorded consolidated gross and net sales of R$23,540.7 million and R$21,051.8 million, up by 32.3% and 33.8%, respectively, on the same period last year.

GPA’s consolidated gross sales guidance for 2010 is R$33.0 billion and, given the year-to-date results, we expect to reach this target.

 (3) Like ABRAS (the Brazilian Supermarket Association), the Company has adopted the IPCA consumer price Index as its inflation indicator, since it gives a more accurate reflection of the Company’s product and brand mix.

(4) Ponto Frio’s same-store concept includes physical and electronic/wholesale sales.

 

 

 

 

93


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

12.01 – COMMENTS ON THE CONSOLIDATED PERFORMANCE DURING THE QUARTER

 

Gross Profit

Gross profit, excluding Globex, came to R$1,443.9 million, growth of 12.1% in the quarter.

 

GPA FOOD

  3Q10
consolidated
( inc. Globex)


3Q09
consolidated
( inc. Globex)


Chg.

9M10
consolidated
( inc. Globex)


9M09
consolidated
( inc. Globex)


Chg.
 
(R$ million)(1) 
Gross Profit  1,443.9  1,287.6  12.1%  4,248.6  3,731.2  13.9% 
Gross Margin - %  25.9%  25.4%  50 bps(2)  25.1%  25.3%  -20 bps(2) 
(1) Totals may not tally as the figures are rounded off
(2) basis points

 

In the third quarter, GPA’s gross profit totaled R$1,443.9 million, 12.1% up year-on-year, accompanied by a gross margin of 25.9%, up by 50 bps over 3Q09 and also an improvement over the 24.8% recorded in 2Q10. Excluding Assaí, GPA’s gross margin would have come to 27.5%, 80 bps higher than 3Q09.

The main factors contributing to the year-on-year improvement were:

(i)      more advantageous negotiations with suppliers;

(ii)     improved operational management; and

(iii)    implementation of a pricing management tool.

In the first nine months, gross profit amounted to R$4,248.6 million, 13.9% up on the same period last year, accompanied by a gross margin of 25.1%, 20 bps less than the 25.3% recorded in 9M09, also impacted by the change in the ICMS tax substitution regime.

 

CONSOLIDATED

  3Q10
co nso lid at ed
( inc. Glo bex) 


3Q09
conso lid at ed
( inc. Glo bex) 


C hg.

9M10
co nso lid at ed
( inc. Glo bex) 


9M09
co nso lid at ed
( inc. Glo bex) 


C hg.
 
(R$ million)(1) 
Gross Profit  1,744.2  1,448.3  20.4%  5,051.4  3,891.9  29.8% 
Gross Margin - %  24.6%  23.8%  80 bps(2)  24.0%  24.7%  -70 bps(2) 
(1) Totals may not tally as the figures are rounded off
(2) basis points

In the third quarter, consolidated gross profit came to R$1,744.2 million, with a margin of 24.6%, 80 bps more than the 23.8% recorded in 3Q09 despite the increased share of electronics/household appliances in the product mix. These items have lower margins than food products.

In the first nine months, gross profit totaled R$5,051.4 million, a 29.8% improvement over the first nine months of 2009, while the gross margin stood at 24.0%.

 

94


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

12.01 – COMMENTS ON THE CONSOLIDATED PERFORMANCE DURING THE QUARTER

 

Total Operating Expenses

Operating expenses, excluding Globex, remained stable in the quarter,

accounting for 18.4% of net sales

 

GPA FOOD

  3Q10
( exc. Globex)

3Q09
( exc. Globex)

Chg.
9M10
( exc. Globex)

9M09
( exc. Globex)

Chg.
 
(R$ million)(1) 
Selling Expenses  863.2  784.1  10.1%  2,601.9  2,296.4  13.3% 
Gen. Adm. Exp.  164.4  147.1  11.7%  493.4  421.1  17.2% 
Total Operating Expenses  1,027.5  931.2  10.3%  3,095.3  2,717.5  13.9% 
% of Net Sales  18.4%  18.4%  0 bps(2)  18.3%  18.5%  -20 bps(2) 
(1) Totals may not tally as the figures are rounded off
(2) basis points
(3) Reclassification in Selling, General and Administrative Expenses in 2009

The Selling and General and Administrative Expenses lines were reclassified in 2009 in order to allow for better comparisons.

 

In the third quarter, total operating expenses (including selling, general and administrative expenses) increased by 10.3% year-on-year to R$1,027.5 million, chiefly due to four factors:

(i) higher personnel and social benefit expenses;

(ii) increased expenses with advertising and marketing;

      (iii) expenses with technology to support business expansion in the coming years; and

(iv) opening of new stores

Despite these upturns, GPA managed to maintain operating expenses at 18.4% as a percentage of net sales, same level as presented in 3Q09, which demonstrates dilution of other expenses.

In the first nine months, total operating expenses came to R$3,095.3 million, 13.9% more than in 9M09, representing 18.3% of net sales, 20 bps less than the 18.5% recorded in the same period last year.

 

CONSOLIDATED

  3Q10
consolidated
( inc. Globex) 


3Q09
consolidated
( inc. Globex) 


Chg.

9M10
consolidated
( inc. Globex) 


9M09
consolidated
( inc. Globex) 


Chg.
 
(R$ million)(1) 
Selling Expenses  1,063.5  943.8  12.7%  3,180.8  2,456.0  29.5% 
Gen. Adm. Exp.  187.3  156.5  19.7%  571.8  430.4  32.8% 
Total Operating Expenses  1,250.8  1,100.2  13.7%  3,752.6  2,886.5  30.0% 
% of Net Sales  17.6%  18.1%  -50 bps(2)  17.8%  18.3%  -50 bps(2) 
(1) Totals may not tally as the figures are rounded off
(2) basis points
(3) Reclassification in Selling, General and Administrative Expenses in 2009

95


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

12.01 – COMMENTS ON THE CONSOLIDATED PERFORMANCE DURING THE QUARTER

 

The Selling and General and Administrative Expenses lines were reclassified in 2009 in order to allow for better comparisons.

 

In the third quarter, operating expenses amounted to R$1,250.8 million, equivalent to 17.6% of net sales, 50 bps less than in 3Q09.

In the first nine months, total operating expenses stood at R$3,752.6 million, equivalent to 17.8% of net sales, 50 bps down year-on-year.

 

                                                                                                           EBITDA                                                                                                          

GPA Food’s EBITDA margin came to 7.5% in the quarter

 

GPA FOOD

  3Q10
( exc. Globex)

3Q09
( exc. Globex)

Chg.
9M10
( exc. Globex)

9M09
( exc. Globex)

Chg.
 
(R$ million)(1) 
EBITDA  416.4  356.3  16.9%  1,153.4  1,013.8  13.8% 
EBITDA Margin - %  7.5%  7.0%  50 bps(2)  6.8%  6.9%  -10 bps(2) 
(1) Totals may not tally as the figures are rounded off             
(2) basis points             

 

In the third quarter, EBITDA totaled R$416.4 million, 16.9% up year-on-year, outpacing period sales growth of 10.0% thanks to the increase in gross profit and the expense dilution, as mentioned previously. The EBITDA margin stood at 7.5%, 50 bps up on 3Q09 and the Group’s best EBITDA margin of the year.

GPA’s EBITDA excluding Assaí came to R$390.7 million, up by 13.6%, with a margin of 8.1%, 60 bps more than the

7.5% reported in 3Q09.

 

                                           EBITDA Margin

 

96


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

12.01 – COMMENTS ON THE CONSOLIDATED PERFORMANCE DURING THE QUARTER

 

Assaí recorded an EBITDA margin of 3.5% in 3Q10, 10 bps more than in 3Q09 (further details in the section on Assaí).

In the first nine months, EBITDA totaled R$1,153.4 million, growth of 13.8%, with a margin of 6.8%, versus 6.9% in 9M09.

 

CONSOLIDATED

  3Q10
consolidated
( inc. Globex) 


3Q09
consolidated
( inc. Globex) 


Chg. 9M10
consolidated
( inc. Globex) 


9M09
consolidated
( inc. Globex) 


Chg.
 
(R$ million)(1) 
EBITDA  493.5  348.1  41.8%  1,298.8  1,005.5  29.2% 
EBITDA Margin - %  7.0%  5.7%  130 bps(2)  6.2%  6.4%  -20 bps(2) 
(1) Totals may not tally as the figures are rounded off             
(2) basis points             

 

In the third quarter, consolidated EBITDA stood at R$493.5 million, 41.8% up on 3Q09, with a margin of 7.0%, a 130 bps improvement over 3Q09.

In the first nine months, EBITDA amounted to R$1,298.8 million, with a margin of 6.2%.

The Company is reaffirming its beginning-of-year guidance of exceeding EBITDA of R$1.8 billion by year-end.

 

Net Financial Result

Financial result increases due to higher net debt in the period

GPA FOOD

  3Q10
( exc. Globex)

3Q09
( exc. Globex)

Chg.
9M10
( exc. Globex)

9M09
( exc. Globex)

Chg.
 
(R$ million)(1) 
Financ. Revenue  75.0  66.0  13.7%  212.0  186.9  13.4% 
Financ. Expenses  (177.1)  (113.9)  55.5%  (483.3)  (367.2)  31.6% 
Net Financial Income  (102.1)  (47.9)  113.0%  (271.3)  (180.2)  50.5% 
(1) Totals may not tally as the figures are rounded off             

In the third quarter, the net financial expense came to R$102.1 million, equivalent to 1.8% of net sales, chiefly due to the increase in the net debt from R$597 million in 3Q09 to R$1,788 million in 3Q10 and the period upturn in the SELIC base rate (see page 7 below, “Net Debt”)

The net financial expense of R$102.1 million in 3Q10 was the result of three factors:

(i)  interest on the net bank debt totaling R$54.4 million, representing 1.0% of net sales, 30 bps higher than the 2Q10 ratio, fueled by the period increase in net debt and the SELIC base rate.

(ii) Discounted receivables of R$28.2 million, equivalent to 0.5% of net sales, in line with the 2Q10 figure, despite the increase in the SELIC base rate. The average term is of 36 days and an average cost of 109.5% of CDI.

97


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

12.01 – COMMENTS ON THE CONSOLIDATED PERFORMANCE DURING THE QUARTER

 

(iii) Other assets and liabilities restated by the CDI rate (i.e. taxes paid in installments and court deposits included in the balance sheet), totaling R$19.5 million, equivalent to 0.3% of net sales.

 

Net Debt

Net debt increased, as shown in the graph below, mainly due to: (i) expenditure of R$598 million on acquisitions, including R$471 million paid to Globex’s shareholders; (ii) investments of R$98 million in the expansion of Assaí; and (iii) a R$194 million loan with Globex.

 

(1) end of period

In the first nine months, the net financial expense was R$271.3 million, 50.5% higher than the 3Q09 expense.

 

CONSOLIDATED

  3Q10
consolidated
( inc. Globex) 


3Q09
consolidated
( inc. Globex) 


Chg. 9M10
consolidated
( inc. Globex) 


9M09
consolidated
( inc. Globex) 


Chg.
 
(R$ million)(1) 
Financ. Revenue  77.4  69.0  12.2%  221.8  190.0  16.7% 
Financ. Expenses  (269.2)  (136.4)  97.3%  (687.0)  (389.7)  76.3% 
Net Financial Income  (191.7)  (67.4)  184.3%  (465.2)  (199.7)  132.9% 
(1) Totals may not tally as the figures are rounded off             

 

In the third quarter, GPA’s consolidated net financial expense was R$191.7 million, equivalent to 2.7% of net sales.

It is worth noting the recognition of R$18.0 million in non-recurring costs from Globex this quarter, due to the change in the criterion for booking the cost of discounted receivables, which are now recognized in the same month as the discount.

Excluding this non-recurring effect, the net financial expense would have been R$173.7 million, equivalent to 2.4% of net sales.

98


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

12.01 – COMMENTS ON THE CONSOLIDATED PERFORMANCE DURING THE QUARTER

 

In the first nine months, the net financial expense came to R$465.2 million, or R$415.2 million excluding the non-recurring effect of R$ 50.0 million in 9M10.

 

Equity Income

FIC’s result came to R$11.7 million in the quarter

CONSOLIDATED

Since the third quarter of 2009, FIC (Financeira Itaú CBD) has also been operating Globex's credit cards and, given their respective shareholders’ equities, GPA now retains a 36% interest in FIC, excluding Globex, while Globex retains a 14% stake. GPA’s consolidated interest in FIC remains at 50%.

In the third quarter, FIC, including Globex’s operations, accounted for 15.0% of total sales, closing the period with 7.4 million clients. Default remained under control, thanks to a rigorous credit-granting policy.

As a result, FIC’s equity income was R$11.7 million, six times more than the same period a year earlier. Of this total, R$9.5 million went to GPA and R$2.3 million to Globex.

This performance was in line with the Group’s strategy of increasing the FIC card’s share of sales, making it the best payment option in the stores and e-commerce operations, with exclusive benefits and advantages for card-holders.

In the first nine months, equity income, including Globex’s operations, totaled R$36.0 million, of which R$26.4 million went to GPA and R$9.6 million to Globex.

 

Net Income

GPA Food’s net income totaled R$138.0 million in 3Q10

 

GPA FOOD

  3Q10
( exc. Globex) 


3Q09
( exc. Globex) 


Chg. 9M10
( exc. Globex) 


9M09
( exc. Globex) 


Chg.
 
(R$ million)(1) 
Net Income  138.0  206.7  -33.3%  349.9  433.3  -19.3% 
Net Margin - %  2.5%  4.1%  -160 bps(2)  2.1%  2.9%  -90 bps(2) 
Tax Installments  2.2  -  -  72.3  -  - 
ZBB Restructuring  6.3  -  -  6.3  -  - 
Income Tax  (2.3)  -  -  (10.4)  -  - 
Minority Interest  (0.6)  -  -  (18.1)  -  - 
Non-recurring Result(2)  -  (52.2)  -  -  (52.2)  - 
Adjusted Net Income  143.6  154.5  -7.1%  400.0  381.1  4.9% 
Adjusted Net Margin - %  2.6%  3.0%  -40 bps(2)  2.4%  2.6%  -20 bps(2) 
(1) Totals may not tally as the figures are rounded off             
(2) basis points             

 

99


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

12.01 – COMMENTS ON THE CONSOLIDATED PERFORMANCE DURING THE QUARTER

 

In the third quarter, net income came to R$138.0 million and the net margin stood at 2.5%.

It is worth noting that if we exclude the non-recurring effects in 3Q10 (REFIS complement in Rio de Janeiro of a negative R$2.2 million and restructuring expenses from the ZBB process totaling a negative R$6.3 million), the adjusted net income totaled R$143.6 million. 

In the first nine months, net income totaled R$349.9 million, equivalent to 2.1% of net sales. Excluding non-recurring items in 9M10, net income would have increased by 4.9% to R$400.0 million. 

 

CONSOLIDATED

  3Q10
consolidated
( inc. Globex) 


3Q09
consolidated
( inc. Globex) 


Chg. 9M10
consolidated
( inc. Globex) 


9M09
consolidated
( inc. Globex) 


Chg.
 
(R$ million)(1) 
Net Income  115.1  164.6  -30.1%  303.6  391.2  -22.4% 
Net Margin - %  1.6%  2.7%  -110 bps(2)  1.4%  2.5%  -110 bps(2) 
Tax Installments  2.2  -  -  66.7  -  - 
ZBB Restructuring  6.3  -  -  6.3  -  - 
Income Tax  (2.3)  -  -  (8.5)  -  - 
Minority Interest  (0.6)  -  -  (18.1)  -  - 
Non-recurring Result(2)  -  (52.2)  -  -  (52.2)  - 
Changing in Recognition of Receivables  11.9  -  -  33.0  -  - 
Adjusted Net Income  132.6  112.4  18.0%  383.0  339.0  13.0% 
Adjusted Net Margin - %  1.9%  1.8%  10 bps(2)  1.8%  2.2%  -40 bps(2) 
(1) Totals may not tally as the figures are rounded off             
(2) basis points             

In the third quarter, consolidated net income stood at R$115.1 million, accompanied by a net margin of 1.6%, impacted by GPA and Globex’s net financial expenses. Excluding non-recurring effects in 3Q10, net income totaled R$ 132.6 million.

In the first nine months, consolidated net income came to R$303.6 million, equivalent to 1.4% of net sales.

Excluding non-recurring items in 9M10, net income totaled R$383.0 million.

 

Assaí Atacadista

In the quarter, EBITDA totaled R$25.6 million, 46.9% up on 3Q09

 

In the third quarter, Assaí recorded gross sales of R$816.2 million, including the stores in São Paulo, Ceará, Rio de Janeiro, Pernambuco and Tocantins(6), 47.5% up on 3Q09, fueled by the sales of new channels, organic growth, conversion of stores, and the format’s improved operating result. Net sales accompanied the gross sales growth, climbing to R$736.5 million.

Gross profit totaled R$108.5 million, with a margin of 14.7%, 10 bps up on 3Q09.

100


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

12.01 – COMMENTS ON THE CONSOLIDATED PERFORMANCE DURING THE QUARTER

 

Total operating expenses came to R$82.9 million, equivalent to 11.3% of net sales, very close to the 3Q09 ratio, but 80 bps down on 2Q10.

EBITDA amounted to R$25.6 million, 46.9% up on 3Q09, with a margin of 3.5%, i.e. up by 100 bps, evidence of an improved operating performance despite the new stores under maturation.

In the first nine months (6), Assaí posted gross sales of R$2,237.3 million and net sales of R$2,021.1 million, 49.2% and 49.6% up, respectively, on 9M09.

Gross profit totaled R$288.0 million, with a margin of 14.2%, 10 bps down on the 14.3% margin recorded in 9M09, due to investments in competitive pricing at the beginning of 2010.

Total operating expenses came to R$227.6 million, representing 11.3% of net sales, 90 bps less than the same period last year.

EBITDA stood at R$60.4 million, 143.9% up year-on-year, with a margin of 3.0%, a 120 bps improvement.

(6) The Tocantins store was included in the figures for all months in 2010.

 

Globex Utilidades S.A.

In same-store terms, gross sales increased by 39.9%

 

In the third quarter, gross sales came to R$ 1,720.1 million, 41.7% up on the same period in 2009, while net sales grew by 49.3% to R$ 1,514.5 million.

Gross profit stood at R$300.3 million, 86.9% up on the same period last year, with a gross margin of 19.8%, a 400 bps improvement.

Total operating expenses came to R$223.2million, representing 14.7% of net sales, a 190 bps reduction compared to the 3Q09.

EBITDA was a positive R$77.1 million, with a margin of 5.1%, versus a negative R$8.3 million in 3Q09.

The net financial result was a negative R$89.6 million. It is worth noting that, in this quarter, there was a non-recurring expense of R$18.0 million due to the change in the criterion for booking the cost of discounted receivables. Excluding this effect, the net financial expense would reach R$71.6 million, representing 4.7% of net sales.

Equity income, considering Globex’s 14% interest in FIC, came to R$2.3 million. This performance was in line with the strategy of increasing the FIC card’s share of sales, making it the best payment option in the Group’s stores and e-commerce operations, with exclusive benefits and advantages for card-holders.

The net result was a loss of R$18.3 million, a R$25.9 million improvement over the loss recorded in 3Q09.

Globex's investments totaled R$9.4 million, less than the R$15.9 million recorded in 3Q09. The reduction was due to the Company’s decision to concentrate first on capitalizing the existing assets and maximizing the synergies with Casas Bahia.

101


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

12.01 – COMMENTS ON THE CONSOLIDATED PERFORMANCE DURING THE QUARTER

 

Investments

GPA invested R$293.1 million in 3Q10

 

GPA FOOD

In the third quarter, GPA invested a total of R$293.1 million in 3Q10, versus R$215.7 million in 3Q09. 

The main quarterly investments were:

·         R$93.7 million in the opening and construction of new stores and the acquisition of strategic sites;

·         R$110.6 million in store renovations and conversions;

·         R$88.7 million in infrastructure (technology and logistics) and others.

 

In the first nine months, the Group invested R$682.5 million, 58.8% more than in 9M09. Investments should reach R$1.3 billion by year-end.

In this quarter, ten new stores were opened in the quarter: 2 Extra Supermercado stores, 5 Extra Fácil stores and 2 Assaí stores in São Paulo and 1 Extra Hipermercado in Piauí. In addition, 1 CompreBem store was converted into an Assaí store and 12 CompreBem stores were converted into Extra Supermercado format in São Paulo, 6 Sendas stores were converted into Extra Supermercados in Rio de Janeiro, 1 Extra Hipermercado store was converted into the Assaí format in São Paulo, and 2 Sendas stores were converted into Assaí stores in Rio de Janeiro. It is worth noting that the sales area expanded by 1.0% in 3Q10 and 2.5% in 9M10.

By the end of 2010, GPA expects to record sales area growth of 7.0% over 2009, giving a total sales area of 1.5 million sq.m., which includes the opening of 5 more Extra Hipermercado stores and 9 Assaí stores in 4Q10.

 

Dividend Payments

R$19.6 million to be paid as dividends in the quarter

 

On November 10, 2010, the Board of Directors approved the prepayment of interim dividends of R$0.08 per class A preferred share and R$ 0.0727272 per common share. Dividends in 3Q10 will total R$19.6 million, in accordance with the Company’s Dividend Payment Policy, approved by the Board of Directors’ Meeting of August 3, 2009.

As for the fourth quarter, after the end of the fiscal year and the approval of the corresponding financial statements, the Company will pay shareholders the minimum mandatory dividends, calculated in accordance with Corporate Law, less the amounts prepaid throughout 2010.

102


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

12.01 – COMMENTS ON THE CONSOLIDATED PERFORMANCE DURING THE QUARTER

 

Dividends in relation to the third quarter of 2010 will be paid on December 1, 2010. Shareholders registered as such on November 17, 2010 will be entitled to receive the payment. As of November 18, 2010, shares will be traded ex-dividends until the payment date.

 

Breakdown of Gross Sales by Format (R$ thousand)     
 
1st Half  2010  %  2009  %  Var.(%) 
Pão de Açúcar  2,308,844  14.8%  2,027,815  18.5%  13.9% 
Extra(1)(4)  6,311,891  40.5%  5,489,982  50.2%  15.0% 
CompreBem  1,389,530  8.9%  1,374,412  12.6%  1.1% 
Extra Eletro  247,827  1.6%  200,912  1.8%  23.4% 
Sendas(2)  951,064  6.1%  893,880  8.2%  6.4% 
Assai  1,421,073  9.1%  945,662  8.6%  50.3% 
Ponto Frio(3)(4)  2,970,862  19.0%  -  -  - 
Grupo Pão de Açúcar  15,601,091  100.0%  10,932,663  100.0%  42.7% 
GPA ex Ponto Frio  12,630,229  -  10,932,663  100.0%  15.5% 
 
3rd Quarter  2010  %  2009  %  Var.(%) 
Pão de Açúcar  1,148,142  14.5%  1,047,610  15.3%  9.6% 
Extra(1) ( 4 )  3,096,612  39.0%  2,848,103  41.5%  8.7% 
CompreBem  630,262  7.9%  667,695  9.7%  -5.6% 
Extra Eletro  116,156  1.5%  107,536  1.6%  8.0% 
Sendas(2 )  411,885  5.2%  427,876  6.2%  -3.7% 
Assai  816,356  10.3%  553,521  8.1%  47.5% 
Ponto Frio(3) ( 4 )  1,720,147  21.7%  1,213,959  17.7%  41.7% 
Grupo Pão de Açúcar  7,939,559  100.0%  6,866,301  100.0%  15.6% 
GPA ex Ponto Frio  6,219,412  -  5,652,342  -  10.0% 
 
9 Months  2010  %  2009  %  Var.(%) 
Pão de Açúcar  3,456,986  14.7%  3,075,425  17.3%  12.4% 
Extra(1) ( 4 )  9,408,504  40.0%  8,338,086  46.8%  12.8% 
CompreBem  2,019,791  8.6%  2,042,107  11.5%  -1.1% 
Extra Eletro  363,982  1.5%  308,448  1.7%  18.0% 
Sendas(2 )  1,362,949  5.8%  1,321,756  7.4%  3.1% 
Assai  2,237,430  9.5%  1,499,183  8.4%  49.2% 
Ponto Frio(3) ( 4 )  4,691,009  19.9%  1,213,959  6.8%  286.4% 
Grupo Pão de Açúcar  23,540,651  100.0%  17,798,964  100.0%  32.3% 
GPA ex Ponto Frio  18,849,642  -  16,585,005  -  13.7% 
 
(1)Includes Extra Fácil and Extra Perto sales
(2)Sendas stores which are part of Sendas Distribuidora S/A
(3)Ponto Frio sales as of 3Q09
(4)As of 2Q10, Extra.com.br sales are included in Globex operations

 

 

 

 

103


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

12.01 – COMMENTS ON THE CONSOLIDATED PERFORMANCE DURING THE QUARTER

 

 

Breakdown of Net Sales by Format (R$ thousand)     
 
1st Half  2010  %  2009  %  Var.(%) 
Pão de Açúcar  2,082,736  14.9%  1,805,418  18.7%  15.4% 
Extra(1)(4)  5,636,460  40.4%  4,800,684  49.8%  17.4% 
CompreBem  1,286,195  9.2%  1,244,518  12.9%  3.3% 
Extra Eletro  229,222  1.6%  163,597  1.7%  40.1% 
Sendas(2)  838,698  6.0%  786,187  8.1%  6.7% 
Assai  1,284,598  9.2%  847,893  8.8%  51.5% 
Ponto Frio(3)(4)  2,593,488  18.6%       
Grupo Pão de Açúcar  13,951,397  100.0%  9,648,296  100.0%  44.6% 
GPA ex Ponto Frio  11,357,909  -  9,648,296  100.0%  17.7% 
 
3rd Half  2010  %  2009  %  Var.(%) 
Pão de Açúcar  1,032,590  14.5%  940,922  15.5%  9.7% 
Extra(1) ( 4 )  2,764,231  38.9%  2,544,224  41.8%  8.6% 
CompreBem  582,625  8.2%  613,891  10.1%  -5.1% 
Extra Eletro  107,746  1.5%  99,346  1.6%  8.5% 
Sendas(2 )  361,989  5.1%  373,054  6.1%  -3.0% 
Assai  736,688  10.4%  502,826  8.3%  46.5% 
Ponto Frio(3 ) ( 4 )  1,514,486  21.3%  1,014,498  16.7%  49.3% 
Grupo Pão de Açúcar  7,100,356  100.0%  6,088,760  100.0%  16.6% 
GPA ex Ponto Frio  5,585,869  -  5,074,262  -  10.1% 
 
9 Months  2010  %  2009  %  Var.(%) 
Pão de Açúcar  3,115,327  14.8%  2,746,340  17.5%  13.4% 
Extra(1) ( 4 )  8,400,692  39.9%  7,344,908  46.7%  14.4% 
CompreBem  1,868,820  8.9%  1,858,409  11.8%  0.6% 
Extra Eletro  336,967  1.6%  262,943  1.7%  28.2% 
Sendas(2 )  1,200,687  5.7%  1,159,240  7.4%  3.6% 
Assai  2,021,286  9.6%  1,350,718  8.6%  49.6% 
Ponto Frio(3 ) ( 4 )  4,107,974  19.5%  1,014,498  6.4%  304.9% 
Grupo Pão de Açúcar  21,051,753  100.0%  15,737,057  100.0%  33.8% 
GPA ex Ponto Frio  16,943,779  -  14,722,559  -  15.1% 
 
(1)Includes Extra Fácil and Extra Perto sales
(2)Sendas stores which are part of Sendas Distribuidora S/A
(3)Ponto Frio sales as of 3Q09
(4)As of 2Q10, Extra.com.br sales are included in Globex operations

 

 

104


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

12.01 – COMMENTS ON THE CONSOLIDATED PERFORMANCE DURING THE QUARTER

 

 

 

 

Sales Breakdown (% of Net Sales)     
 
  2010  2009 
  3rd Quarter  9 Months  3rd Quarter  9 Months 
  Consolidated  Consolidated  Consolidated  Consolidated 
  ( inc. Globex)  ( inc. Globex)  ( inc. Globex)  ( inc. Globex) 
Cash  46.7%  46.5%  47.6%  48.9% 
Credit Card  46.3%  46.3%  44.4%  42.1% 
Food Voucher  6.4%  6.5%  6.7%  8.0% 
Credit  0.6%  0.7%  1.3%  1.0% 
Post-dated Checks  0.2%  0.2%  0.8%  0.8% 
Installment Sales  0.4%  0.5%  0.5%  0.3% 
 
 
  2010  2009 
  3rd Quarter  9 Months  3rd Quarter  9 Months 
  ( exc. Globex)  ( exc. Globex)  ( exc. Globex)  ( exc. Globex) 
Cash  50.7%  49.9%  48.9%  49.1% 
Credit Card  40.9%  41.7%  42.2%  41.7% 
Food Voucher  8.1%  8.1%  8.1%  8.3% 
Credit  0.2%  0.3%  0.9%  0.8% 
Post-dated Checks  0.2%  0.3%  0.9%  0.8% 
Installment Sales  0.0%  0.0%  0.0%  0.1% 

 

 

 

 

 

 

105


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                               COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                           47.508.411/0001-56

 

12.01 – COMMENTS ON THE CONSOLIDATED PERFORMANCE DURING THE QUARTER

 

 

3Q10 Results Conference Call

Thursday, November 11, 2010

 

Conference Call in Portuguese with simultaneous translation into English:

12:00 p.m. – Brasília time |  9:00 a.m.– New York time

Dial-in: +55 (11) 3301-3000
Code: GPA

A live webcast is available on the Company’s site: www.grupopaodeacucar.com.br/ir/gpa. The replay can be accessed after the end of the Call by dialing +55 (11) 3127-4999 – Code: 48529515

 

Investor Relations

 

 

Vitor Fagá                                                          

vitor.faga@grupopaodeacucar.com.br                            

 

Marcel Rodrigues da Silva
marcel.rodrigues@grupopaodeacucar.com.br

Juliana Palhares Mendes
juliana.mendes@grupopaodeacucar.com.br

Investor Relations

 

Telephone: +55 (11) 3886-0421

Fax: +55(11) 3884-2677

 

E-mail: gpa.ri@grupopaodeacucar.com.br

Website: www.grupopaodeacucar.com.br/ir/gpa

 

Statements contained in this release relating to the business outlook of the Group, projections of operating and financial results and relating to the growth potential of the Group, constitute mere forecasts and were based on the expectations of Management in relation to the future of the Company. These expectations are highly dependent on changes in the market, on Brazil’s general economic performance, on the industry and on international markets, and are therefore subject to change

 

 

Grupo Pão de Açúcar operates 1,112 stores, 80 gas stations and 153 drugstores in 19 states and the Federal District. The Group’s multi-format structure comprises supermarkets (Pão de Açúcar, Extra Supermercado, CompreBem and Sendas), hypermarkets (Extra), electronics/household appliance stores (Ponto Frio and Extra Eletro), convenience stores (Extra Fácil), ‘atacarejo’ (wholesale/retail) (Assaí), and e-commerce operations (Extra.com.br, Pão de Açúcar Delivery and PontoFrio.com.br), gas stations and drugstores, as well as an extensive distribution network. Thanks to the recent association with Casas Bahia, the Group will add around 519 more points of sale and an e-commerce site (www.casasbahia.com.br). In 2009, the Group recorded gross sales of R$ 26.2 billion thanks to differentiated customer service and strong positioning in the country’s leading markets.

 

 

 

106


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01.01 - IDENTIFICATION

 

 

1 - CVM CODE

01482-6

 

2 - COMPANY NAME

COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

 

3 - CNPJ (Corporate Taxpayer’s ID)

47.508.411/0001-56

 

09.01 – INTEREST IN SUBSIDIARIES AND/OR ASSOCIATED COMPANIES

 

1 - ITEM

2 - NAME OF SUBSIDIARY/AFFILIATED COMPANY

3 - CNPJ (Corporate Taxpayer’s ID)

4 - CLASSIFICATION

5 - PARTICIPATION IN CAPITAL OF INVESTEE - %

 

6 - INVESTOR’S  SHAREHOLDERS' EQUITY - %

7 - TYPE OF COMPANY

8 - NUMBER OF SHARES HELD IN CURRENT QUARTER

 

(in thousands)

9 - NUMBER OF SHARES HELD IN PREVIOUS QUARTER

 

(in thousands)

 

01

NOVASOC COMERCIAL LTDA

 03.139.761/0001-17

PRIVATE SUBSIDIARY

10.00

0.09

COMMERCIAL, INDUSTRY AND OTHER

1

1

 

02

SE SUPERMERCADOS LTDA

 01.545.828/0001-98

PRIVATE SUBSIDIARY

24.23

24.22

COMMERCIAL, INDUSTRY AND OTHER

1,444,656

1,444,656

 

03

SENDAS DISTRIBUIDORA S.A.

 06.057.223/0001-71

PRIVATE SUBSIDIARY

57.43

-0.96

COMMERCIAL, INDUSTRY AND OTHER

607,084

607,084

 

04

PA PUBLICIDADE LTDA

 04.565.015/0001-58

PRIVATE SUBSIDIARY

99.99

0.05

COMMERCIAL, INDUSTRY AND OTHER

100

100

 

06

BARCELONA COM. VAREJISTA ATACADISTA LTDA

 07.170.943/0001-01

PRIVATE SUBSIDIARY

100.00

2.08

COMMERCIAL, INDUSTRY AND OTHER

15,010

15,010

 

07

CBD HOLLAND B.V.

    .   .   /    -

PRIVATE SUBSIDIARY

100.00

0.01

COMMERCIAL, INDUSTRY AND OTHER

1

1

 

08

CBD PANAMA TRADING CORP

     .   .   /    -

PRIVATE SUBSIDIARY

100.00

0.07

COMMERCIAL, INDUSTRY AND OTHER

2

2

 

 

 

107


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01.01 - IDENTIFICATION

 

 

1 - CVM CODE

01482-6

 

2 - COMPANY NAME

COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

 

3 - CNPJ (Corporate Taxpayer’s ID)

47.508.411/0001-56

 

09.01 – INTEREST IN SUBSIDIARIES AND/OR ASSOCIATED COMPANIES

 

1 - ITEM

2 - NAME OF SUBSIDIARY/AFFILIATED COMPANY

3 - CNPJ (Corporate Taxpayer’s ID)

4 - CLASSIFICATION

5 - PARTICIPATION IN CAPITAL OF INVESTEE - %

 

6 - INVESTOR’S  SHAREHOLDERS' EQUITY - %

7 - TYPE OF COMPANY

8 - NUMBER OF SHARES HELD IN CURRENT QUARTER

 

(in thousands)

9 - NUMBER OF SHARES HELD IN PREVIOUS QUARTER

 

(in thousands)

 

09

SAPER PARTICIPAÇÕES LTDA

 43.183.052/0001-53

PRIVATE SUBSIDIARY

24.00

0.00

COMMERCIAL, INDUSTRY AND OTHER

9

9

 

10

XANTOCARPA PARTICIPAÇÕES LTDA

 10.246.989/0001-71

PRIVATE SUBSIDIARY

100.00

0.06

COMMERCIAL, INDUSTRY AND OTHER

28,672

28,672

 

11

VERDRA EMPREENDIMENTOS E PARTICIP. S.A.

 07.170.941/0001-12

PRIVATE SUBSIDIARY

99.99

0.00

COMMERCIAL, INDUSTRY AND OTHER

9

9

 

12

VANCOUVER EMPREEN. E PARTICIPAÇÕES LTDA

 07.145.976/0001-00

PRIVATE SUBSIDIARY

100.00

0.01

COMMERCIAL, INDUSTRY AND OTHER

12,010

12,010

 

13

BELLAMAR E,PREEND E PARTICIPAÇÕES LTDA

 06.950.710/0001-69

PRIVATE SUBSIDIARY

100.00

2.49

COMMERCIAL, INDUSTRY AND OTHER

10

10

 

16

GLOBEX UTILIDADES S/A

 33.041.260/0652-90

PUBLIC SUBSIDIARY

98.77

9.48

COMMERCIAL, INDUSTRY AND OTHER

122,287

122,287

 

17

BRUXELAS EMPREEND. E PARTIC.

 07.170.938/0001-07

PRIVATE SUBSIDIARY

99.99

0.00

COMMERCIAL, INDUSTRY AND OTHER

10

10

 

18

DALLAS EMPREEND. E PART. S/S

 07.170.934/0001-10

PRIVATE SUBSIDIARY

99.99

0.00

COMMERCIAL, INDUSTRY AND OTHER

10

10

108


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

 

01.01 - IDENTIFICATION

 

 

1 - CVM CODE

01482-6

 

2 - COMPANY NAME

COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

 

3 - CNPJ (Corporate Taxpayer’s ID)

47.508.411/0001-56

 

09.01 – INTEREST IN SUBSIDIARIES AND/OR ASSOCIATED COMPANIES

 

1 - ITEM

2 - NAME OF SUBSIDIARY/AFFILIATED COMPANY

3 - CNPJ (Corporate Taxpayer’s ID)

4 - CLASSIFICATION

5 - PARTICIPATION IN CAPITAL OF INVESTEE - %

 

6 - INVESTOR’S  SHAREHOLDERS' EQUITY - %

7 - TYPE OF COMPANY

8 - NUMBER OF SHARES HELD IN CURRENT QUARTER

 

(in thousands)

9 - NUMBER OF SHARES HELD IN PREVIOUS QUARTER

 

(in thousands)

 

19

MONTE TARDELI EMPREEND. E PARTICIPAÇÕES

 11.561.904/0001-02

PRIVATE SUBSIDIARY

99.99

0.00

COMMERCIAL, INDUSTRY AND OTHER

1

0

 

20

GPA EMPREEND. E PARTICIP. LTDA

 11.979.404/0001-95

PRIVATE SUBSIDIARY

99.99

0.00

COMMERCIAL, INDUSTRY AND OTHER

1

0

 

21

GPA 2 EMPREEND. E PARTICIP. LTDA

 11.666.221/0001-10

PRIVATE SUBSIDIARY

99.99

0.00

COMMERCIAL, INDUSTRY AND OTHER

1

0

 

22

NOVA EXTRA ELETRO COMERCIAL LTDA.

11.666.020/0001-12

PRIVATE SUBSIDIARY

99.99

0.00

COMMERCIAL, INDUSTRY AND OTHER

1

0

 

23

GPA 4 EMPREEND. E PARTICIP. S/A

11.732.612/0001-95

PRIVATE SUBSIDIARY

99.99

0.00

COMMERCIAL, INDUSTRY AND OTHER

1

0

 

24

GPA 5 EMPREEND. E PARTICIP. S/A

11.732.615/0001-29

PRIVATE SUBSIDIARY

99.99

0.00

COMMERCIAL, INDUSTRY AND OTHER

1

0

 

25

GPA 6 EMPREEND. E PARTICIP. S/A

11.666.171/0001-70

PRIVATE SUBSIDIARY

99.99

0.00

COMMERCIAL, INDUSTRY AND OTHER

1

0

 

 

 

109


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01.01 - IDENTIFICATION

 

1 - CVM CODE

01482-6

2 - COMPANY NAME

COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

3 - CNPJ (Corporate Taxpayer’s ID)

47.508.411/0001-56

 

14.01 – CHARACTERISTICS OF PUBLIC OR PRIVATE DEBENTURE ISSUE

 

1- ITEM

 

02

2 – ISSUE ORDER NUMBER

 

6

3 – REGISTRATION NUMBER WITH CVM

 

SER/DEB/2007/007

4 – DATE OF REGISTRATION WITH CVM

 

4/27/2007

5 - ISSUED SERIES

 

1

6 - TYPE

 

SIMPLE

7 - NATURE

 

PUBLIC

8 – ISSUE DATE

 

3/1/2007

9 - DUE DATE

 

3/1/2013

10 - TYPE OF DEBENTURE

 

WITHOUT PREFERENCE

11 – REMUNERATION CONDITIONS PREVAILING

 

 

12 - PREMIUM/DISCOUNT

 

 

13 - NOMINAL VALUE (Reais)

 

10,084.41

14- ISSUED AMOUNT (Thousands of Reais)

 

544,146

15- NUMBER OF DEBENTURES ISSUED (UNIT)

 

54,000

16 - OUTSTANDING DEBENTURES (UNIT)

 

54,000

17 - TREASURY DEBENTURES (UNIT)

 

0

18 - REDEEMED DEBENTURES (UNIT)

 

0

19 – CONVERTED DEBENTURES (UNIT)

 

0

20 – DEBENTURES TO BE PLACED (UNIT)

 

0

21 - DATE OF THE LAST RENEGOTIATION

 

 

22 - DATE OF NEXT EVENT

 

3/1/2011

 

110


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01.01 - IDENTIFICATION

 

1 - CVM CODE

01482-6

2 - COMPANY NAME

COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

3 - CNPJ (Corporate Taxpayer’s ID)

47.508.411/0001-56

 

14.01 – CHARACTERISTICS OF PUBLIC OR PRIVATE DEBENTURE ISSUE

 

1- ITEM

 

03

2 – ISSUE ORDER NUMBER

 

6

3 – REGISTRATION NUMBER WITH CVM

 

SER/DEB/2007/008

4 – DATE OF REGISTRATION WITH CVM

 

4/27/2007

5 - ISSUED SERIES

 

2

6 - TYPE

 

SIMPLE

7 - NATURE

 

PUBLIC

8 – ISSUE DATE

 

3/1/2007

9 - DUE DATE

 

3/1/2013

10 - TYPE OF DEBENTURE

 

WITHOUT PREFERENCE

11 – REMUNERATION CONDITIONS PREVAILING

 

 

12 - PREMIUM/DISCOUNT

 

 

13 - NOMINAL VALUE (Reais)

 

10,084.41

14- ISSUED AMOUNT (Thousands of Reais)

 

241,490

15- NUMBER OF DEBENTURES ISSUED (UNIT)

 

23,965

16 - OUTSTANDING DEBENTURES (UNIT)

 

23,965

17 - TREASURY DEBENTURES (UNIT)

 

0

18 - REDEEMED DEBENTURES (UNIT)

 

0

19 – CONVERTED DEBENTURES (UNIT)

 

0

20 – DEBENTURES TO BE PLACED (UNIT)

 

0

21 - DATE OF THE LAST RENEGOTIATION

 

 

22 - DATE OF NEXT EVENT

 

3/1/2011

 

111


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01.01 - IDENTIFICATION

 

1 - CVM CODE

01482-6

2 - COMPANY NAME

COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

3 - CNPJ (Corporate Taxpayer’s ID)

47.508.411/0001-56

 

14.01 – CHARACTERISTICS OF PUBLIC OR PRIVATE DEBENTURE ISSUE

 

1- ITEM

 

04

2 – ISSUE ORDER NUMBER

 

7

3 – REGISTRATION NUMBER WITH CVM

 

 

4 – DATE OF REGISTRATION WITH CVM

 

 

5 - ISSUED SERIES

 

1

6 - TYPE

 

SIMPLE

7 - NATURE

 

PRIVATE

8 – ISSUE DATE

 

6/15/2009

9 - DUE DATE

 

6/5/2011

10 - TYPE OF DEBENTURE

 

WITHOUT PREFERENCE

11 – REMUNERATION CONDITIONS PREVAILING

 

 

12 - PREMIUM/DISCOUNT

 

 

13 - NOMINAL VALUE (Reais)

 

1,144,927.73

14- ISSUED AMOUNT (Thousands of Reais)

 

216,354

15- NUMBER OF DEBENTURES ISSUED (UNIT)

 

200

16 - OUTSTANDING DEBENTURES (UNIT)

 

200

17 - TREASURY DEBENTURES (UNIT)

 

0

18 - REDEEMED DEBENTURES (UNIT)

 

0

19 – CONVERTED DEBENTURES (UNIT)

 

0

20 – DEBENTURES TO BE PLACED (UNIT)

 

0

21 - DATE OF THE LAST RENEGOTIATION

 

 

22 - DATE OF NEXT EVENT

 

6/5/2011

 

112


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01.01 - IDENTIFICATION

 

1 - CVM CODE

01482-6

2 - COMPANY NAME

COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

3 - CNPJ (Corporate Taxpayer’s ID)

47.508.411/0001-56

 

14.01 – CHARACTERISTICS OF PUBLIC OR PRIVATE DEBENTURE ISSUE

 

1- ITEM

 

05

2 – ISSUE ORDER NUMBER

 

8

3 – REGISTRATION NUMBER WITH CVM

 

 

4 – DATE OF REGISTRATION WITH CVM

 

 

5 - ISSUED SERIES

 

1

6 - TYPE

 

SIMPLE

7 - NATURE

 

PRIVATE

8 – ISSUE DATE

 

12/15/2009

9 - DUE DATE

 

12/15/2014

10 - TYPE OF DEBENTURE

 

WITHOUT PREFERENCE

11 – REMUNERATION CONDITIONS PREVAILING

 

 

12 - PREMIUM/DISCOUNT

 

 

13 - NOMINAL VALUE (Reais)

 

1,081,200.71

14- ISSUED AMOUNT (Thousands of Reais)

 

513,098

15- NUMBER OF DEBENTURES ISSUED (UNIT)

 

500

16 - OUTSTANDING DEBENTURES (UNIT)

 

500

17 - TREASURY DEBENTURES (UNIT)

 

0

18 - REDEEMED DEBENTURES (UNIT)

 

0

19 – CONVERTED DEBENTURES (UNIT)

 

0

20 – DEBENTURES TO BE PLACED (UNIT)

 

0

21 - DATE OF THE LAST RENEGOTIATION

 

 

22 - DATE OF NEXT EVENT

 

12/15/2012

 

113


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

                                                           

01482-6                                   COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                            47.508.411/0001-56                                                                           

 

20.01 – OTHER SIGNIFICANT INFORMATION DEEMED AS RELEVANT BY THE COMPANY

 

SHAREHOLDING OF CONTROLLING PARTIES OF MORE THAN 5% OF COMPANY'S SHARES OF EACH TYPE AND CLASS, UP TO INDIVIDUAL LEVEL
COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO Shareholding on 9/30/2010
(In units)
Shareholder Common Shares PNA Shares PNB Shares Preferred Shares  Total
Number  %  Number   %  Number  %  Number  %  Number  % 
WILKES PARTICIPAÇÕES S.A.  65,400,000  65.61%  -  0.00%  -  0.00%  -  0.00%  65,400,000  25.40% 
SUDACO PARTICIPAÇÕES LTDA.  28,619,178  28.71%  2,465,206  1.60%  -  0.00%  2,465,206  1.56%  31,084,384  12.07% 
ONYX 2006 PARTICIPAÇÕES LTDA.  -  0.00%  20,527,380  13.29%  -  0.00%  20,527,380  13.01%  20,527,380  7.97% 
CASINO GUICHARD PERRACHON *  5,600,052  5.62%  -  0.00%  -  0.00%  -  0.00%  5,600,052  2.17% 
SEGISOR *  -  0.00%  4,559,582  2.95%  532,172  15.89%  5,091,754  3.23%  5,091,754  1.98% 
SWORDFISH INVESTMENTS LIMITED*  -  0.00%  433,135  0.28%  180,472  5.39%  613,607  0.39%  613,607  0.24% 
STANHORE TRADING INTERNATIONAL S.A.*  -  0.00%  6,408,986  4.15%  330,394  9.87%  6,739,380  4.27%  6,739,380  2.62% 
MORZAN EMPREENDIMENTOS E PART. LTDA.  -  0.00%  80,045  0.05%  726,164  21.68%  806,209  0.51%  806,209  0.31% 
BLACKROCK INC.*  -  0.00%  12,885,704  8.34%  -  0.00%  12,885,704  8.16%  12,885,704  5.00% 
SCHRODER INVESTMENT MANAGEMENT                     
NORTH AMERICA LTD.*  -  0.00%  9,583,662  6.20%  -  0.00%  9,583,662  6.07%  9,583,662  3.72% 
RIO PLATE EMPREENDIMENTOS E                     
PARTICIPAÇÕES LTDA.  -  0.00%  4,055,172  2.62%  -  0.00%  4,055,172  2.57%  4,055,172  1.57% 
PENÍNSULA PARTICIPAÇÕES LTDA.  -  0.00%  2,608,467  1.69%  -  0.00%  2,608,467  1.65%  2,608,467  1.01% 
PAIC PARTICIPAÇÕES LTDA.  -  0.00%  648,729  0.42%  -  0.00%  648,729  0.41%  648,729  0.25% 
MARLIN INVESTMENTS LTD.*  -  0.00%  32,000  0.02%  -  0.00%  32,000  0.02%  32,000  0.01% 
TREASURY SHARES  -  0.00%  232,586  0.15%  -  0.00%  232,586  0.15%  232,586  0.09% 
OTHER  60,621  0.06%  89,971,077  58.24%  1,579,609  47.17%  91,550,686  58.00%  91,611,307  35.57% 
TOTAL  99,679,851  100.00%  154,491,731  100.00%  3,348,811  100.00%  157,840,542  100.00%  257,520,393  100.00% 
(*) Foreign Company

 

CORPORATE'S CAPITAL STOCK DISTRIBUTION (COMPANY'S SHAREHOLDER), UP TO THE INDIVIDUAL LEVEL
WILKES PARTICIPAÇÕES S.A Shareholding on 9/30/2010
(In units)
Shareholder/Quotaholder Common Shares Preferred Shares Total
Number  %  Number   %  Number  % 
PENINSULA PARTICIPAÇÕES LTDA.  20,375,000  50.00  -  -  20,375,000  25.49 
SUDACO PARTICIPAÇÕES LTDA.  20,375,000  50.00  39,179,308  100.00  59,554,308  74.51 
TOTAL  40,750,000  100.00  39,179,308  100.00  79,929,308  100.00 

 

CORPORATE'S CAPITAL STOCK DISTRIBUTION (COMPANY'S SHAREHOLDER), UP TO THE INDIVIDUAL LEVEL
SUDACO PARTICIPAÇÕES S.A Shareholding on 9/30/2010
(In units)
Shareholder/Quotaholder Quotas Total
Number  %  Number   % 
PUMPIDO PARTICIPAÇÕES LTDA  3,585,804,573  100.00  3,585,804,573  100.00 
TOTAL  3,585,804,573  100.00  3,585,804,573  100.00 

 

CORPORATE'S CAPITAL STOCK DISTRIBUTION (COMPANY'S SHAREHOLDER), UP TO THE INDIVIDUAL LEVEL
ONYX 2006 PARTICIPAÇÕES LTDA. Shareholding on 9/30/2010
(In units)
Shareholder/Quotaholder Quotas Total
Number  %  Number   % 
RIO PLATE EMPREEND. E PARTIC. LTDA  515,580,242  99.99  515,580,242  99.99 
ABILIO DOS SANTOS DINIZ  10,312  0.01  10,312  0.01 
TOTAL  515,590,554  100.00  515,590,554  100.00 

 

CORPORATE'S CAPITAL STOCK DISTRIBUTION (COMPANY'S SHAREHOLDER), UP TO THE INDIVIDUAL LEVEL
CASINO GUICHARD PERRACHON Shareholding on 9/30/2010
(In units)
Shareholder/Quotaholder Interest in Total Capital  % of Voting Rights
Number  %  Number   % 
GROUPE RALLYE *  54,571,978  48.79  92,338,411  62.47 
GALERIES LAFAYETTE *  2,049,747  1.83  2,985,505  2.02 
GROUPE CNP *  2,170,207  1.94  3,831,554  2.59 
TREASURY SHARES  1,162,075  1.04  -  - 
OTHER  51,889,456  46.39  48,655,616  32.92 
TOTAL  111,843,463  100.00  147,811,086  100.00 
(*) Foreign Company

 

114

114


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

                                                           

01482-6                                   COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                            47.508.411/0001-56                                                                           

 

20.01 – OTHER SIGNIFICANT INFORMATION DEEMED AS RELEVANT BY THE COMPANY

 

CORPORATE'S CAPITAL STOCK DISTRIBUTION (COMPANY'S SHAREHOLDER), UP TO THE INDIVIDUAL LEVEL
PENÍNSULA PARTICIPAÇÕES LTDA Shareholding on 9/30/2010
(In units)
Shareholder/Quotaholder Common Shares Preferred Shares Total
Number  %  Number   %  Number  % 
ABILIO DOS SANTOS DINIZ  250,659,233  37.47  3  42.86  250,659,236  61.48 
JOÃO PAULO F.DOS SANTOS DINIZ  39,260,447  15.63  1  14.29  39,260,448  9.63 
ANA MARIA F.DOS SANTOS DINIZ D'ÁVILA  39,260,447  15.63  1  14.29  39,260,448  9.63 
PEDRO PAULO F.DOS SANTOS DINIZ  39,260,447  15.63  1  14.29  39,260,448  9.63 
ADRIANA F.DOS SANTOS DINIZ  39,260,447  15.63  1  14.29  39,260,448  9.63 
TOTAL  407,701,021  100.00  7  100.00  407,701,028  100.00 

 

CORPORATE'S CAPITAL STOCK DISTRIBUTION (COMPANY'S SHAREHOLDER), UP TO THE INDIVIDUAL LEVEL
PUMPIDO PARTICIPAÇÕES LTDA Shareholding on 9/30/2010
(In units)
Shareholder/Quotaholder Quotas Total
Number  %  Number   % 
SEGISOR**  3,633,544,694  100.00  3,633,544,694  100.00 
TOTAL  3,633,544,694  100.00  3,633,544,694  100.00 
(**) Foreign Company         

 

CORPORATE'S CAPITAL STOCK DISTRIBUTION (COMPANY'S SHAREHOLDER), UP TO THE INDIVIDUAL LEVEL
RIO PLATE EMPREENDIMENTOS E PARTICIPAÇÕES LTDA Shareholding on 9/30/2010
(In units)
Shareholder/Quotaholder Quotas Total
Number  %  Number   % 
PENÍNSULA PARTICIPAÇÕES LTDA  566,610,599  100.00  566,610,599  100.00 
ABILIO DOS SANTOS DINIZ  1  0.00  1  - 
TOTAL  566,610,600  100.00  566,610,600  100.00 

 

CORPORATE'S CAPITAL STOCK DISTRIBUTION (COMPANY'S SHAREHOLDER), UP TO THE INDIVIDUAL LEVEL   
SEGISOR Shareholding on 9/30/2010
(In units)
Shareholder/Quotaholder  Quotas Total
 Number  %  Number   % 
CASINO GUICHARD PERRACHON (*)  -  99.99  -  99.99 
OTHER  -  0.01  -  0.01 
TOTAL  -  100.00  -  100.00 
(*) Foreign Company         

 

CONSOLIDATED SHAREHOLDING OF CONTROLLING PARTIES AND MANAGEMENT AND OUTSTANDING SHARES
Shareholding on 9/30/2010
Shareholder Common Shares Class A Preferred Shares  Class B Preferred Shares  Preferred Shares  Total
Number  %  Number  %  Number  %  Number  %  Number  % 
Controlling Parties  99,619,331  99.94%  40,714,140  26.35%  2,086,078  62.29%  42,800,218  27.12%  142,419,549  55.30% 
Management                     
Board of Directors  -  0.00%  4,371  0.00%  -  0.00%  4,371  0.00%  4,371  0.00% 
Board of Executive Officers  -  0.00%  536,063  0.35%  2,689  0.08%  538,752  0.34%  538,752  0.21% 
Fiscal Council  -  0.00%  -  0.00%  -  0.00%  -  0.00%  -  0.00% 
Treasury Shares  -  0.00%  232,586  0.15%  -  0.00%  232,586  0.15%  232,586  0.09% 
Other Shareholders  60,520  0.06%  113,004,571  73.15%  1,260,044  37.63%  114,264,615  72.39%  114,325,135  44.39% 
Total  99,679,851  100.00%  154,491,731  100.00%  3,348,811  100.00%  157,840,542  100.00%  257,520,393  100.00% 
Outstanding Shares  60,520  0.06%  113,004,571  73.15%  1,260,044  37.63%  114,264,615  72.39%  114,325,135  44.39% 

 

CONSOLIDATED SHAREHOLDING OF CONTROLLING PARTIES AND MANAGEMENT AND OUTSTANDING SHARES
Shareholding on 9/30/2009
Shareholder Common Shares Class A Preferred Shares  Class B Preferred Shares  Preferred Shares Total
Number  %  Number  %  Number  %  Number  %  Number  % 
Controlling Parties  99,619,331  99.94  38,120,170  26.56  3,546,335  31.40  41,666,505  26.91  141,285,836  55.51 
Management                     
Board of Directors  -  -  4,371  0.00  -  -  4,371  0.00  4,371  0.00 
Board of Executive Officers  -  -  217,750  0.15  3,954  0.04  221,704  0.14  221,704  0.09 
Fiscal Council  -  -  -  -  -  -  -    -  - 
Treasury Shares  -  -  369,600  0.26  -  -  369,600  0.24  369,600  0.15 
Other Shareholders  60,520  0.06  104,832,635  73.03  7,743,530  68.56  112,576,165  72.71  112,636,685  44.25 
Total  99,679,851  100.00  143,544,526  100.00  11,293,819  100.00  154,838,345  100.00  254,518,196  100.00 
Outstanding Shares  60,520  0.06  104,832,635  73.03  7,743,530  68.56  112,576,165  72.71  112,636,685  44.25 

 

115


 

 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

                                                           

01482-6                                        COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                     47.508.411/0001-56                                                                          

 

21.01 – SPECIAL REVIEW REPORT – UNQUALIFIED OPINION

 

A free translation from Portuguese into English of Review Report of Independent Auditors on quarterly financial information prepared in Brazilian currency in accordance with the accounting practices adopted in Brazil and specific norms issued by CVM (Brazilian Securities Exchange Commission)

 

 

REVIEW REPORT OF INDEPENDENT AUDITORS

 

To the Board of Directors and Shareholders of

Companhia Brasileira de Distribuição

São Paulo - SP

 

 

1. We have performed a review of the accompanying  unconsolidated and consolidated  Quarterly Financial Information (“ITR”) of Companhia Brasileira de Distribuição and the Company and subsidiaries for the quarter ended September 30, 2010, including the balance sheets, statements of income, shareholders’ equity, cash flows, added value, notes to the quarterly financial information and Company’s performance comments prepared under responsibility of Management of the Company.

 

2. Our review was conducted in accordance with the specific procedures determined by the Institute of Independent Auditors of Brazil (“IBRACON”) and the Federal Board of Accountancy (“CFC”), and included principally: (a) inquiries of and discussions with the management responsible for the Company’s and subsidiaries accounting, financial and operating areas regarding the criteria adopted for the preparation of the quarterly information and (b) review of information and subsequent events which have or might have significant effects on the Company’s and  subsidiaries operations and financial position.

 

3. Based on our review, we are not aware of any material modification that should be made to the Quarterly Financial Information referred in paragraph 1 for it to comply with accounting practices adopted in Brazil and Brazilian Securities Exchange Commission (“CVM”) instructions, applicable to the preparation of Quarterly Financial Information.

 

4. As mentioned in Note 2, during 2009, CVM approved several accounting pronouncements, interpretations and guidances, which were issued by the Accounting Pronouncements Committee (CPC), with mandatory application in 2010. These accounting pronouncements, interpretations and guidance change the accounting practices adopted in Brazil. According to the Deliberation CVM no. 603/09, Management of the Company chose to present the Quarterly Financial Information (ITR) prepared according to the accounting practices adopted in Brazil until December 31, 2009, not adopting the new accounting rules applicable for 2010. As required by the Deliberation CVM no. 603/09, the Company described in Note 2 the main changes that could have impact over the financial statements for  December 31, 2010, and clarifications over the reasons that preclude the estimation of impacts in the shareholoders’ equity and net income.

 

São Paulo, November 9, 2010.

 

ERNST & YOUNG TERCO

Auditores Independentes S.S.

CRC 2SP015199/O-6

 

 

Sergio Citeroni

Contador CRC -1SP170652/O-1

 

 

116


 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                        COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                     47.508.411/0001-56                                                                          

 

22.01 – COMMENTS ON THE PERFORMANCE OF THE SUBSIDIARY/ASSOCIATED COMPANY

 

Subsidiary/Associated Company: NOVASOC COMERCIAL LTDA

 

See Item 12.01 – Comments on the consolidated performance during the quarter

117


 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                        COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                     47.508.411/0001-56                                                                          

 

22.01 – COMMENTS ON THE PERFORMANCE OF THE SUBSIDIARY/ASSOCIATED COMPANY

 

Subsidiary/Associated Company: SE SUPERMERCADO LTDA

 

See Item 12.01 – Comments on the consolidated performance during the quarter

 

118


 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                        COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                     47.508.411/0001-56                                                                          

 

22.01 – COMMENTS ON THE PERFORMANCE OF THE SUBSIDIARY/ASSOCIATED COMPANY

 

Subsidiary/Associated Company: SENDAS DISTRIBUIDORAS S.A

 

See Item 12.01 – Comments on the consolidated performance during the quarter

119


 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                        COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                     47.508.411/0001-56                                                                          

 

22.01 – COMMENTS ON THE PERFORMANCE OF THE SUBSIDIARY/ASSOCIATED COMPANY

 

Subsidiary/Associated Company: PA PUBLICIDADE LTDA

 

See Item 12.01 – Comments on the consolidated performance during the quarter

120


 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                        COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                     47.508.411/0001-56                                                                          

 

22.01 – COMMENTS ON THE PERFORMANCE OF THE SUBSIDIARY/ASSOCIATED COMPANY

 

Subsidiary/Associated Company: BARCELONA COM. VAREJISTA ATACADISTA LTDA

 

See Item 12.01 – Comments on the consolidated performance during the quarter

121


 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                        COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                     47.508.411/0001-56                                                                          

 

22.01 – COMMENTS ON THE PERFORMANCE OF THE SUBSIDIARY/ASSOCIATED COMPANY

 

Subsidiary/Associated Company: CBD HOLLAND B.V.

 

See Item 12.01 – Comments on the consolidated performance during the quarter

122


 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                        COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                     47.508.411/0001-56                                                                          

 

22.01 – COMMENTS ON THE PERFORMANCE OF THE SUBSIDIARY/ASSOCIATED COMPANY

 

Subsidiary/Associated Company: CBD PANAMA TRADING CORP

 

See Item 12.01 – Comments on the consolidated performance during the quarter

123


 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                        COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                     47.508.411/0001-56                                                                          

 

22.01 – COMMENTS ON THE PERFORMANCE OF THE SUBSIDIARY/ASSOCIATED COMPANY

 

Subsidiary/Associated Company: SAPER PARTICIPAÇÕES LTDA

 

See Item 12.01 – Comments on the consolidated performance during the quarter

124


 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                        COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                     47.508.411/0001-56                                                                          

 

22.01 – COMMENTS ON THE PERFORMANCE OF THE SUBSIDIARY/ASSOCIATED COMPANY

 

Subsidiary/Associated Company: VEDRA EMPREENDIMENTOS E PARTICIP. S.A.

 

See Item 12.01 – Comments on the consolidated performance during the quarter

125


 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                        COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                     47.508.411/0001-56                                                                          

 

22.01 – COMMENTS ON THE PERFORMANCE OF THE SUBSIDIARY/ASSOCIATED COMPANY

 

Subsidiary/Associated Company: VANCOUVER EMPREEN. E PARTICIPAÇÕES LTDA

 

See Item 12.01 – Comments on the consolidated performance during the quarter

126


 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                        COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                     47.508.411/0001-56                                                                           

 

22.01 – COMMENTS ON THE PERFORMANCE OF THE SUBSIDIARY/ASSOCIATED COMPANY

 

Subsidiary/Associated Company: BELLAMAR EMPREEND E PARTICIPAÇÕES LTDA

 

See Item 12.01 – Comments on the consolidated performance during the quarter

127


 

(A free translation of the original in Portuguese)

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

01482-6                                        COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO                     47.508.411/0001-56                                                                           

 

22.01 – COMMENTS ON THE PERFORMANCE OF THE SUBSIDIARY/ASSOCIATED COMPANY

 

Subsidiary/Associated Company: GLOBEX UTILIDADES S/A

 

See Item 12.01 – Comments on the consolidated performance during the quarter

128


 

(A free translation of the original in Portuguese)

 

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

 

01.01 - IDENTIFICATION

 

1 - CVM CODE

01482-6

2 - COMPANY NAME

COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

3 - CNPJ (Corporate Taxpayer’s ID)

47.508.411/0001-56

 

 

TABLE OF CONTENTS

 

GROUP

TABLE

DESCRIPTION

PAGE

01

01

IDENTIFICATION

1

01

02

HEADQUARTERS

1

01

03

INVESTORS RELATIONS OFFICER (Company Mailing Address)

1

01

04

ITR REFERENCE

1

01

05

CAPITAL STOCK

2

01

06

COMPANY PROFILE

2

01

07

COMPANIES NOT INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENTS

2

01

08

CASH DIVIDENDS

2

01

09

SUBSCRIBED CAPITAL AND CHANGES IN THE CURRENT YEAR

3

01

10

INVESTORS RELATIONS OFFICER

4

02

01

BALANCE SHEET - ASSETS

5

02

02

BALANCE SHEET - LIABILITIES

6

03

01

STATEMENT OF INCOME 

8

04

01

04- STATEMENT OF CASH FLOWS

10

05

01

05- STATEMENT OF CHANGES IN SHAREHOLDER’S EQUITY FROM 7/1/2010 TO 9/30/2010

12

05

02

05- STATEMENT OF CHANGES IN SHAREHOLDER’S EQUITY FROM1/1/2010 TO 9/30/2010

13

08

01

CONSOLIDATED BALANCE SHEET - ASSETS

14

08

02

CONSOLIDATED BALANCE SHEET - LIABILITIES

15

09

01

CONSOLIDATED STATEMENT OF INCOME

17

10

01

10.01- CONSOLIDATED STATEMENT OF CASH FLOWS

19

11

01

11- CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDER’S EQUITY FROM 7/1/2010 TO 9/30/2010

21

11

02

11- CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDER’S EQUITY FROM 1/1/2010 TO 9/30/2010

22

06

01

NOTES TO THE QUARTERLY INFORMATION

23

07

01

COMMENTS ON THE COMPANY’S PERFORMANCE DURING THE QUARTER

90

12

01

COMMENTS ON THE CONSOLIDATED PERFORMANCE DURING THE QUARTER

91

13

01

INVESTMENT IN SUBSIDIARIES AND/OR ASSOCIATED COMPANIES

107

14

01

CHARACTERISTICS OF PUBLIC OR PRIVATE DEBENTURE ISSUE

110

20

01

OTHER INFORMATION DEEMED AS RELEVANT BY THE COMPANY

114

21

01

SPECIAL REVIEW REPORT

116

 

 

NOVASOC COMERCIAL LTDA

 

22

02

COMMENTS ON THE PERFORMANCE OF THE SUBSIDIARY/ASSOCIATED COMPANY

117

 

 

SE SUPERMERCADOS LTDA

 

22

02

COMMENTS ON THE PERFORMANCE OF THE SUBSIDIARY/ASSOCIATED COMPANY

118

 

 

SENDAS DISTRIBUIDORA S.A.

 

22

02

COMMENTS ON THE PERFORMANCE OF THE SUBSIDIARY/ASSOCIATED COMPANY

119

 

 

PA PUBLICIDADE LTDA

 

22

02

COMMENTS ON THE PERFORMANCE OF THE SUBSIDIARY/ASSOCIATED COMPANY

120

129


 

(A free translation of the original in Portuguese)

 

 

FEDERAL PUBLIC SERVICE

BRAZILIAN SECURITIES COMMISSION (CVM)

QUARTERLY INFORMATION - ITR

COMMERCIAL, INDUSTRIAL AND OTHER                         

 

September 30, 2010

 

 

Brazilian Corporation Law

 

 

 

01.01 - IDENTIFICATION

 

1 - CVM CODE

01482-6

2 - COMPANY NAME

COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO

3 - CNPJ (Corporate Taxpayer’s ID)

47.508.411/0001-56

 

 

TABLE OF CONTENTS

 

GROUP

TABLE

DESCRIPTION

PAGE

 

 

BARCELONA COM. VAREJISTA ATACADISTA LTDA

 

22

02

COMMENTS ON THE PERFORMANCE OF THE SUBSIDIARY/ASSOCIATED COMPANY

121

 

 

CBD HOLLAND B.V.

 

22

02

COMMENTS ON THE PERFORMANCE OF THE SUBSIDIARY/ASSOCIATED COMPANY

122

 

 

CBD PANAMA TRADING CORP

 

22

02

COMMENTS ON THE PERFORMANCE OF THE SUBSIDIARY/ASSOCIATED COMPANY

123

 

 

SAPER PARTICIPAÇÕES LTDA

 

22

02

COMMENTS ON THE PERFORMANCE OF THE SUBSIDIARY/ASSOCIATED COMPANY

124

 

 

VEDRA EMPREENDIMENTOS E PARTICIP. S.A.

 

22

02

COMMENTS ON THE PERFORMANCE OF THE SUBSIDIARY/ASSOCIATED COMPANY

125

 

 

VANCOUVER EMPREEN. E PARTICIPAÇÕES LTDA

 

22

02

COMMENTS ON THE PERFORMANCE OF THE SUBSIDIARY/ASSOCIATED COMPANY

126

 

 

BELLAMAR EMPREEND E PARTICIPAÇÕES LTDA

 

22

02

COMMENTS ON THE PERFORMANCE OF THE SUBSIDIARY/ASSOCIATED COMPANY

127

 

 

GLOBEX UTILIDADES S/A

 

22

02

COMMENTS ON THE PERFORMANCE OF THE SUBSIDIARY/ASSOCIATED COMPANY

128

 

 

BRUXELAS EMPREEND. E PARTICIP.

 

 

 

DALLAS EMPREEND. E PART. S/S

 

 

 

MONTE TARDELI EMPREEND. E PARTICIPAÇÕES

 

 

 

GPA 1 EMPREEND. E PARTICIP. LTDA.

 

 

 

GPA 2 EMPREEND. E PARTICIP. LTDA.

 

 

 

NOVA EXTRA ELETRO COMERCIAL LTDA.

 

 

 

GPA 4 EMPREEND. E PARTICIP. S/A

 

 

 

GPA 5 EMPREEND. E PARTICIP. S/A

 

 

 

GPA 6 EMPREEND. E PARTICIP. LTDA.

 

 

130


 

SIGNATURES

        Pursuant to the requirement 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.




COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO



Date:  November 16, 2010 By:   /s/ Enéas César Pestana Neto      
         Name:   Enéas César Pestana Neto
         Title:      Chief Executive Officer



    By:    /s/ Vitor Fagá de Almeida            
         Name:  Vitor Fagá de Almeida 
         Title:     Investor Relations 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.