SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
For the month of November 2021
(Commission File No. 001-32221)
GOL LINHAS AÉREAS INTELIGENTES S.A.
(Exact name of registrant as specified in its charter)
GOL INTELLIGENT AIRLINES INC.
(Translation of registrant’s name into English)
Praça Comandante Linneu Gomes, Portaria 3, Prédio 24
Jd. Aeroporto
04630-000 São Paulo, São Paulo
Federative Republic of Brazil
(Address of registrant’s principal executive offices)
Indicate by check mark whether the registrant files or will file
annual reports under cover Form 20-F or Form 40-F.
Form 20-F ___X___ Form 40-F ______
Indicate by check mark 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___
Quarterly Information (ITR)
Parent Company and Consolidated
GOL Linhas Aéreas Inteligentes S.A.
September 30, 2021
with Review Report on the Quarterly Information
Gol Linhas Aéreas Inteligentes S.A.
Parent Company and Consolidated Quarterly Information (ITR)
September 30, 2021
Contents
| Comments on the Performance | 2 |
| Report of the Statutory Audit Committee (SAC) | 7 |
| Statement of the Executive Officers on the Parent Company and Consolidated Quarterly Information (ITR) | 8 |
Statement of the Executive Officers on the Independent Auditors’ Review Report | 9 |
Independent Auditors’ Review Report on the Quarterly Information (ITR) | 10 |
Balance Sheets | 12 |
Income Statement | 14 |
Comprehensive Income Statements | 16 |
Statements of Changes in Shareholders’ Equity | 17 |
Cash Flow Statements | 18 |
Statement of Added Value | 20 |
Notes on the Parent Company and Consolidated Quarterly Information (ITR) | 21 |
Comments on the Performance
Sales: Consolidated gross sales reached around R$2.5 billion in 3Q21. GOL’s average daily sales reached R$27.6 million, representing around 66% of pre-pandemic sales, R$9.1 million above 2Q21 and 148% higher than 3Q20. During the quarter, the migration process of the Company’s PSS (Passenger Service System) to a new Sabre system temporarily reduced Company’s flights and sales by approximately 5% in the quarter, as provided for in the transition plan.
Customer experience: GOL believes that the Customer experience will be critical to growth of market share post-pandemic, as passengers will look to fly with airlines that they trust for Safety and Service. GOL’s Way of Serving was honored with the 2021 CustomerSA Award. The award recognizes, identifies and promotes the best practices by leading companies in customer service throughout Latin America.
To reinforce its commitment to Service further, in September, GOL completed its successful migration to the SabreSonic Passenger Service System (PSS). The technology will support sales growth and expansion in connectivity and integration with codeshare partners' sales systems by more efficiently managing the large number of passengers that travel on GOL each year, through improvements to the Customer booking experience and a more fluid service at check-in and other airport areas.
Eduardo Bernardes Neto, Vice President of Sales, Marketing and Clients stated: “The migration to Sabre’s PSS will enable us to be more efficient in our management of passenger bookings and offer our Customers a better overall digital experience, making more services available to our Clients through greater personalization, thus enhancing the competitive differentiation of GOL’s product.”
Expansion of commercial cooperation with American Airlines: In September, GOL signed a letter of intent to expand its commercial cooperation with American Airlines through an exclusive codeshare agreement for the next three years that expands beyond the terms of the previous codeshare partnership.
Operating since February 2020, the existing codeshare agreement already respresented the largest route network in the Americas, enabling the Company’s Customers to conveniently connect to more than 30 destinations in the United States. The partnership’s flights currently operate at GOL’s hubs in São Paulo (GRU) and Rio de Janeiro (GIG), integrating 34 Brazilian and international route options, including destinations like Montevideo, Uruguay.
Kakinoff added “The exclusive codeshare agreement between two of the leading airlines in the Americas brings together highly complementary air networks and offers Customers a superior travel experience with more flights and destinations in North America and South America. We believe this will further strengthen our operations in international markets, accelerating long-term growth and maximizing value for our shareholders. This also endorses confidence in the Company’s growth as the economy reopens and travel demand increases.”
As part of the agreement, American agreed to invest US$200 million in 22.2 million of GOL’s newly issued preferred shares in a capital increase, for a 5.2% stake in the Company. The completion of the extended partnership and equity investment is subject to closing conditions, including the execution and delivery of definitive documentation.
Network and Fleet: GOL’s fleet currently consists of 129 aircraft Boeing 737. This includes 91 737-800s, 23 737-700s, and 15 MAX-8 aircraft. The Company’s acceleration of its fleet transformation will replace 23 B 737-800 NGs with 28 Boeing 737 MAX8 aircraft by the end of 2022.
Leasing: During the third quarter, GOL maintained flexibility on its variable monthly payments contracts. The agreements signed with its lessors allow for the extension of deferrals in order to be adjusted proportionally to the recovery of capacity during 2021, resulting in a lower volume of payments. The efficient management of the lease contracts enabled the Company to record the lowest fleet indebtedness among local peers.
Aircraft Maintenance: In September, the Company celebrated the 15th anniversary of GOL Aerotech, the largest aircraft maintenance center in Latin America, located in Confins (MG). GOL Aerotech is qualified to perform maintenance services for companies and airlines that have Boeing 737 Next Generation, 737 Classic, 737 MAX and Boeing 767 family aircraft. It is certified by national and international regulators such as ANAC (National Civil Aviation Agency of Brazil), the FAA (Federal Aviation Administration, United States) and EASA (European Union Aviation Safety Agency).
Liability management: With the Retap of its Senior Secured Notes maturing in 2026 in the total amount of US$150 million, and the refinancing of its R$1.2 billion bank debt, GOL concluded the reprofiling of more than R$3.3 billion of short-term maturities. Excluding the effects of exchange rate variations from the devaluation of the Real, GOL is the only airline among its peers to maintain the same level of gross debt (including financial and leasing liabilities) and operating liabilities (suppliers payables and provisions) when compared to pre-pandemic anounts.
Sustainability: The Company invests in several initiatives to mitigate its environmental impact. GOL was the first airline in Latin America to affirm its commitment to zero carbon emissions by 2050, by using SAFs (Sustainable Aviation Fuels), and through operational and technical improvements that reduce GHG (Greenhouse Gases) emissions, in line with the guidelines of IATA and the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).
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GOL obtained the maximum score in Exame magazine's ranking of “Best and Biggest” in 2021 in the metrics of environmental, social and corporate responsibility practices, due to its standing out in relation to competitors in the Transport, Logistics and Logistics Services sector in all analysis criteria .
Furthermore, as announced in the second quarter, and GOL is the first airline to offer its Customers the option to offset carbon from their travels through a partnership with MOSS Earth, one of the world’s largest environmental carbon credit platforms. The emissions are offset with the MCO2 acquisition, the MOSS carbon credit, a global token backed by blockchain. The transaction that offsets carbon issued on a flight by supporting certified conservation projects in the Amazon region.
Within the Company’s Sustainability Policy, on September 1st of this year, GOL had the first carbon-neutral flight in Brazil, bound for Fernando de Noronha, departing from Recife. This initiative was born out of our partnership with MOSS, which will donate to the Company’s Customers the carbon offset of their trips to Fernando Noronha neutralizing total carbon emissions both to and from there. The GOL Clients that fly to the arquipelego receive an offset certification for the Recife-Noronha segment and, if they purchased other segments, they are invited to offset them also.
The Company also signed a non-binding memorandum of understanding with Avolon for the acquisition and/or lease of 250 electric vertical take-off and landing aircraft (eVTOL) of Vertical Aerospace. Assuming that the aircraft is certified in Brazil and that its deliveries are successful, the Company expects to start operations with a new and additional Brazilian air network using eVTOLs in mid-2025.
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Operating and Financial Indicators
| Traffic Data – GOL (in Millions) | 3Q21 | 3Q20 | % Var. | 9M21 | 9M20 | % Var. |
| RPK GOL – Total | 5,932 | 3,164 | 87.5% | 14,956 | 13,884 | 7.7% |
| RPK GOL – Domestic | 5,932 | 3,164 | 87.5% | 14,956 | 12,594 | 18.8% |
| RPK GOL – International | 0 | 0 | NM | 0 | 1,290 | NM |
| ASK GOL – Total | 7,280 | 3,992 | 82.4% | 18,312 | 17,444 | 5.0% |
| ASK GOL – Domestic | 7,280 | 3,992 | 82.4% | 18,312 | 15,660 | 16.9% |
| ASK GOL – International | 0 | 0 | NM | 0 | 1,784 | NM |
| GOL Load Factor – Total | 81.5% | 79.3% | 2.2 p.p. | 81.7% | 79.6% | 2.1 p.p. |
| GOL Load Factor – Domestic | 81.5% | 79.3% | 2.2 p.p. | 81.7% | 80.4% | 1.3 p.p. |
| GOL Load Factor – International | 0.0% | 0.0% | NM | 0.0% | 72.3% | NM |
| Operating Data | 3Q21 | 3Q20 | % Var. | 9M21 | 9M20 | % Var. |
| Revenue Passengers - Pax on Board ('000) | 4,991 | 2,604 | 91.7% | 12,408 | 11,577 | 7.2% |
| Aircraft Utilization (Block Hours/Day) | 10.2 | 6.7 | 52.2% | 9.4 | 9.8 | -4.1% |
| Departures | 36,216 | 19,338 | 87.3% | 88,675 | 87,440 | 1.4% |
| Total Seats (‘000) | 6,398 | 3,360 | 90.4% | 15,646 | 15,015 | 4.2% |
| Average Stage Length (km) | 1,124 | 1,172 | -4.1% | 1,158 | 1,146 | 1.0% |
| Fuel Consumption (mm liters) | 200 | 113 | 77.0% | 505 | 506 | -0.2% |
| Full-time Employees (at Period End) | 14,193 | 15,083 | -5.9% | 14,193 | 15,083 | -5.9% |
| Average Operating Fleet(6) | 76 | 63 | 20.6% | 69 | 65 | 6.2% |
| On-time Departures | 95.76% | 96.7% | -0.9 p.p. | 95.7% | 93.5% | 2.2 p.p. |
| Flight Completion | 98.88% | 98.1% | 0.8 p.p. | 99.2% | 97.5% | 1.7 p.p. |
| Passenger Complaints (per 1,000 pax) | 1.42 | 1.02 | 39.2% | 1.15 | 1.08 | 6.5% |
| Lost Baggage (per 1,000 pax) | 1.89 | 1.77 | 6.8% | 1.92 | 2.11 | -9.0% |
| Financial Information | 3Q21 | 3Q20 | % Var. | 9M21 | 9M20 | % Var. |
| Net YIELD (R$ cents) | 29.80 | 27.78 | 7.3% | 27.22 | 29.27 | -7.0% |
| Net PRASK (R$ cents) | 24.28 | 22.02 | 10.3% | 22.23 | 23.30 | -4.6% |
| Net RASK (R$ cents) | 26.31 | 24.42 | 7.7% | 24.63 | 25.68 | -4.1% |
| CASK (R$ cents)(4) | 36.64 | 43.47 | -15.9% | 36.02 | 29.31 | 22.9% |
| CASK Ex-Fuel (R$ cents)(4) | 27.40 | 35.55 | -22.8% | 27.20 | 20.98 | 29.5% |
| Adjusted CASK(6) | 35.00 | 34.12 | 2.6% | 34.34 | 24.97 | 37.5% |
| Adjusted CASK(6) Ex-Fuel (R$ cents) | 25.76 | 26.19 | -1.6% | 25.52 | 16.64 | 53.4% |
| Recurring Adjusted CASK (R$ cents) | 21.66 | 20.37 | 6.3% | 20.87 | 19.26 | 8.4% |
| Recurring Adjusted CASK Ex-Fuel (R$ cents) | 12.34 | 13.93 | -11.4% | 12.33 | 11.71 | 5.3% |
| Breakeven Load Factor(4) | 113.5% | 132.5% | -19.0 p.p. | 118.6% | 88.3% | 30.3 p.p. |
| Average Exchange Rate(1) | 5.2294 | 5.3772 | -2.7% | 5.3325 | 5.0793 | 5.0% |
| End of Period Exchange Rate(1) | 5.4394 | 5.6407 | -3.6% | 5.4394 | 5.6407 | -3.6% |
| WTI (Average per Barrel. US$)(2) | 70.56 | 40.91 | 72.5% | 64.82 | 38.36 | 69.0% |
| Price per Liter Fuel (R$)(3) | 3.46 | 2.34 | 47.9% | 3.25 | 2.65 | 22.6% |
| Gulf Coast Jet Fuel (Average per Liter, US$)(2) | 0.50 | 0.28 | 78.6% | 0.46 | 0.29 | 58.6% |
(1)Source: Brazilian Central Bank; (2) Source: Bloomberg; (3) Fuel expenses excluding hedge results and PIS/COFINS credits/liters consumed; (4) Excluding non-recurring expenses and Idle expenses. (5) Average operating fleet excluding aircraft in sub-leasing and MRO. Certain calculations may not match with the financial statements due to rounding. (6) Considers only expenses related to current operating levels.
Domestic market
GOL’s domestic demand was 5,932 million RPK, an increase of 87.5%, while the ASK supply increased 82.4% compared to 3Q20, and the load factor reached 81.5% in the quarter. The Company transported 4.9 million Customers in 3Q21, an increase of 91.7% compared to the same period in 2020.
International Market
In 3Q21, the Company carried out non-regular charter flights for soccer teams in championships. As most country borders were closed, GOL did not offer regular international flights.
Volume of Departures and Total Seats
The total volume of the Company’s departures was 36,216, an increase of 87.3% over 3Q20. The total number of seats available to the market was 6.3 million in the second quarter of 2021, an increase of 90.4% quarter-over- quarter.
PRASK, Yield and RASK
Net PRASK increased by 10.3% in the quarter when compared to 3Q20, reaching 24.28 cents (R$). GOL’s net RASK was 26.31 cents (R$) in 3Q21, a n increase of 7.7% compared to 3Q20. Net yield increased 7.3% compared to 3Q20, reaching 29.80 cents (R$), but increase 15.2% when compared to 2Q21.
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Fleet
At the end of 3Q21, GOL's total fleet was 129 Boeing 737 aircraft, comprised of 114 NGs and 15 MAXs (operational). At the end of 3Q20, GOL's total fleet was 129 aircraft, of which seven were MAXs (non- operational). The average age of the Company's fleet was 11.1 years at the end of 3Q21.
GOL‘s operating fleet is 100% composed of narrow body aircraft financed via operating leases.
| Total Fleet at Period-end | 3Q21 | 3Q20 | %Var. | 2Q21 | %Var. |
| B737s | 129 | 129 | 0 | 127 | 2 |
| B737-7 NG | 23 | 22 | 1 | 23 | 0 |
| B737-8 NG | 91 | 100 | -9 | 94 | -3 |
| B737-8 MAX 8 | 15 | 7 | 8 | 10 | 5 |
As of September 30, 2021, GOL had 95 firm orders for the acquisition of Boeing 737 MAX aircraft, of which 73 were orders for 737 MAX-8s and 22 orders were for 737 MAX-10s. The Company's plan is to return up to six aircraft by the end of 2021, with the flexibility to return even more aircraft if necessary.
| Fleet Plan | 2021E | 2022E | 2023E | >2024E | Total |
| Operating Fleet at the End of the Year | 102 | 115 | |||
| Aircraft Commitments (R$ MM) | 452.8 | 2,592.8 | 3,853.3 | 21,117.6 | 28,016.5 |
During the third quarter, GOL maintained flexibility on its fixed monthly payments via variable contracts. The agreements signed with its lessors allow for the extension of deferrals in order to be adjusted proportionally to the recovery of capacity during 2021. Lease liability measurement took into account the new payment flows, the discount rate and the exchange rate on the date of the contractual changes. The calculated effects were recorded as an increase in the lease liability in the amount of R$47.4 million, with a corresponding decrease in fixed assets.
GOL recently signed agreements to acquire 28 additional Boeing 737 MAX-8 aircraft, which should reduce the Company’s unit costs by 8% in 2022.
The 28 B 737 MAX 8 aircraft will replace 23 B 737-800 NGs by the end of 2022. The Company currently operates 15 737 MAX aircraft and has returned 18 B737 NGs in the past 18 months. Due to the new agreements, GOL will end 2021 with 28 737 MAX-8 aircraft (~20% of the total fleet). By the end of 2022, the Company will have 44 737 MAX aircraft (32% of the total fleet). With current purchase commitments for 737 MAX, GOL expects to meet its goal of a 75% MAX fleet by 2030.
Glossary of Industry Terms
| · | AIRCRAFT LEASING: an agreement through which a company (the lessor) acquires a resource chosen by its client (the lessee) for subsequent rental to the latter for a determined period. |
| · | AVAILABLE SEAT KILOMETERS (ASK): The aircraft seating capacity is multiplied by the number of kilometers flown. |
| · | BARREL OF WEST TEXAS INTERMEDIATE (WTI): Intermediate oil from Texas, a region that serves as a reference to the name for concentrating oil exploration in the USA. WTI is used as a reference point in oil for the US derivatives markets. |
| · | BRENT: Oil produced in the North Sea, traded on the London Stock Exchange and used as a reference in the European and Asian derivatives markets. |
| · | TOTAL CASH: Total cash, financial investments, and restricted cash in the short- and long-term. |
| · | OPERATING COST PER AVAILABLE SEAT KILOMETER (CASK): operating expenses divided by the total number of available seat kilometers. |
| · | OPERATING COST PER AVAILABLE SEAT KILOMETER EX-FUEL (CASK EX-FUEL): operating cost divided by the total number of available seat kilometers excluding fuel expenses. |
| · | AVERAGE STAGE LENGTH: It is the average number of kilometers flown per stage performed. |
| · | EXCHANGEABLE SENIOR NOTES (ESN): Securities convertible into shares. |
| · | AIRCRAFT CHARTER: Flight operated by a Company that is out of its normal or regular operation. |
| · | BLOCK HOURS: Time in which the aircraft is in flight, plus taxi time. |
| · | LESSOR: The party renting a property or other asset to another party, the lessee. |
| · | LONG-HAUL FLIGHTS: Long-distance flights (in GOL’s case, flights of more than four hours’ duration). |
| · | REVENUE PASSENGERS: total number of passengers on board who have paid more than 25% of the full flight fare. |
| · | REVENUE PASSENGER KILOMETERS PAID (RPK): sum of the products of the number of paying passengers on a given flight and the length of the flight. |
| · | PDP: Credit for financing prepayments for the acquisition of aircraft. |
| · | Load Factor: Percentage of the aircraft’s capacity used in terms of seats (calculated by dividing the RPK/ASK). |
| · | Break-Even Load Factor: Load factor required for operating revenues to correspond to operating expenses. |
| · | Aircraft Utilization Rate: Average number of hours per day that the aircraft was in operation. |
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| · | Passenger Revenue per Available Seat Kilometer (PRASK): total passenger revenue divided by the total number of available seat kilometers. |
| · | Operating Revenue per Available Seat Kilometers (RASK): The operating revenue is divided by the total number of available seat kilometers. |
| · | Sale-leaseback: A financial transaction whereby a resource is sold and then leased back, enabling the use of the resource without owning it. |
| · | SLOT: The right of an aircraft to take off or land at a given airport for a determined period. |
| · | Sub-Lease: An arrangement whereby a lessor in a rent agreement leases the item rented to a fourth party. |
| · | Freight Load Factor (FLF): Measure of capacity utilization (% of AFTKs used). Calculated by dividing FTK by AFTK. |
| · | Freight Tonne Kilometers (FTK): The demand for cargo transportation, calculated as the weight of the cargo in tons multiplied by the total distance traveled. |
| · | Available Freight Tonne Kilometer (AFTK): Weight of the cargo in tons multiplied by the kilometers flown. |
| · | Yield per Passenger Kilometer: The average value paid by a passenger to fly one kilometer. |
Disclaimer
This release contains forward-looking statements relating to the prospects of the business, estimates for operating and financial income (expenses), and those related to growth prospects of GOL, which are, by nature, subject to significant risks and uncertainties. The estimates and forecasts in this document involve known and unknown risks, uncertainties, contingencies, and other factors, many of which are beyond GOL’s control and which may lead the results, performances, or events to be substantially different from those expressed or implied in these statements. The forward-looking statements in this document are based on several assumptions related to GOL’s current and future business strategies and GOL’s future operating environment and are not a guarantee of future performance. GOL does not issue any statement or provide any guarantee that the results anticipated by the estimates in this document will be equivalent to those effectively achieved by GOL. Although GOL believes that the estimates here are reasonable, they may prove incorrect, and the final results may differ. These are merely estimates and projections and, as such, are based exclusively on management’s expectations for GOL. Such forward-looking statements depend, substantially, on external factors and risks presented in the disclosure documents filed by GOL, apply exclusively to the date they were issued and are, therefore, subject to change without prior notice.
Non-Accounting Measures
To be consistent with industry practice, the Company discloses so-called non-GAAP financial measures, which are not recognized under IFRS or other accounting standards, including “Net Debt”, “Total Liquidity” and “EBITDA”. GOL’s Management believes that disclosure of non-GAAP measures provides useful information to investors, financial analysts, and the public in their review of its operating performance and their comparison of its operating performance to the operating performance of other airlines and other industries. However, these non-GAAP items do not have standardized meanings and may not be directly comparable to similarly-titled items adopted by other companies. Potential investors should not rely on information not recognized under IFRS as a substitute for the GAAP measures of earnings or liquidity in making an investment decision.
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Report of the Statutory Audit Committee (“SAC”)
The Statutory Audit Committee of Gol Linhas Aéreas Inteligentes S.A., in compliance with its legal and statutory obligations, has reviewed the Parent Company and Consolidated Quarterly Information (ITR) for the three-month and nine-month periods ended September 30, 2021. Based on the procedures we have undertaken and considering the independent auditors’ review report issued by Grant Thornton Auditores Independentes and the information and explanations we have received during the quarter, we conclude that these documents can be submitted to the assessment of the Board of Directors.
São Paulo, November 8, 2021
André Béla Jánszky
Member of the Statutory Audit Committee
Antônio Kandir
Member of the Statutory Audit Committee
Germán Pasquale Quiroga Vilardo
Member of the Statutory Audit Committee
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Statement of the Executive Officers on the Parent Company and Consolidated Quarterly Information (ITR)
Under the provisions of CVM Instruction 480/09, the executive officers state that they have discussed, reviewed, and approved the Parent Company and Consolidated Quarterly Information (ITR) for the three-month and nine-month periods ended September 30, 2021.
São Paulo, November 8, 2021
Paulo Sérgio Kakinoff
Chief Executive Officer
Richard Freeman Lark Jr.
Executive Vice President, Chief Financial Officer, and Investor Relations Officer
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Statement of the Executive officers on the Independent Auditors’ Review Report
Under the provisions of CVM Instruction 480/09, the Executive Board states that it has discussed, reviewed, and agreed with the conclusion of the review report from the independent auditor, Grant Thornton Auditores Independentes, on the Parent Company and Consolidated Quarterly Information (ITR) for the three-month and nine-month periods ended September 30, 2021.
São Paulo, November 8, 2021
Paulo Sérgio Kakinoff
Chief Executive Officer
Richard Freeman Lark Jr.
Executive Vice President, Chief Financial Officer, and Investor Relations Office
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(Free translation from the original issued in Portuguese. In the event of any discrepancies, the Portuguese language version shall prevail.)
Independent auditor’s report on review of interim financial information
To the Board of directors and shareholders of Gol Linhas Aéreas Inteligentes S.A. São Paulo – SP | Grant Thornton Auditores Independentes
Av. Eng. Luís Carlos Berrini, 105 - 12o andar Itaim Bibi, São Paulo (SP) Brasil
T +55 11 3886-5100 |
Introduction
We have reviewed the accompanying individual and consolidated interim financial information of Gol Linhas Aéreas Inteligentes S.A. (the Company), comprised in the Quarterly Information Form for the quarter ended September 30, 2021, comprising the balance sheet as of September 30, 2021 and the respective statements of income and of comprehensive income for the periods of three and nine months then ended and of changes in shareholders’ equity and of cash flows for the period of nine months then ended, including the footnotes.
Management is responsible for the preparation of the individual interim financial information in accordance with the NBC TG 21 – Interim Financial Reporting and of the consolidated interim financial information in accordance with the NBC TG 21 and with the international standard IAS 34 – Interim Financial Reporting, as issued by the International Accounting Standards Board (Iasb), such as for the presentation of these information in accordance with the standards issued by the Brazilian Exchange Securities Commission, applicable to the preparation of interim financial information. Our responsibility is to express a conclusion on this interim financial information based on our review.
Review scope
We conducted our review in accordance with the Brazilian and International standards on reviews of interim information (NBC TR 2410 – Review of Interim Financial Information Performed by the Independent Auditor of the Entity and ISRE 2410 – Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). The review of interim information consists of making inquiries, primarily of persons responsible for the financial and accounting matters and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the audit standards and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion on the individual interim financial information
Based on our review, nothing has come to our attention that causes us to believe that the individual interim financial information included in the quarterly information form referred to above has not been prepared, in all material respects, in accordance with NBC TG 21 applicable to the preparation of interim financial information, and presented in accordance with the standards issued by the Brazilian Securities and Exchange Commission.
© 2021 Grant Thornton Auditores Independentes. All rights reserved │ GLAI | 10 |
Conclusion on the consolidated interim financial information
Based on our review, nothing has come to our attention that causes us to believe that the consolidated interim financial information included in the quarterly information form referred to above has not been prepared, in all material respects, in accordance with NBC TG 21 and IAS 34 applicable to the preparation of interim financial information, and presented in accordance with the standards issued by the Brazilian Securities and Exchange Commission.
Emphasis of matter
Significant uncertainty as to the ability to continue as a going concern
We draw attention to Note 1, which states that the individual and consolidated interim financial information were prepared under the assumption of going concern. As described in the aforementioned note, the Company has been impacted in its operations due to the effects of the COVID-19 pandemic and recorded net working capital deficit and equity deficiency as of September 30, 2021 which, together with other events and conditions, indicate the existence of material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern. The plans and actions being developed by Management to restore the Company’s financial economic balance and financial position are described in Note 1. The individual and consolidated interim financial information do not include any adjustment that may arise from the result of such uncertainty. Our review conclusion is not qualified regarding this matter.
Other matters
Statements of value added
The quarterly information referred to above includes the individual and consolidated statements of value added for the period of nine months ended September 30, 2021, prepared under the responsibility of the Company's management and presented as supplementary information for the purposes of IAS 34.
These statements were submitted to the same review procedures in conjunction with the review of the Company's interim financial information in order to conclude they are reconciliated to the interim financial information and to the accounting records, as applicable, and whether the structure and content are in accordance with the criteria established in the NBC TG 09 - Statement of Value Added. Based on our review, nothing has come to our attention that causes us to believe that the accompanying statements of value added were not prepared, in all material respects, in accordance with the individual and consolidated interim financial information taken as a whole.
São Paulo, November 08, 2021
Octavio Zampirollo Neto
Assurance Partner
Grant Thornton Auditores Independentes
Balance
© 2021 Grant Thornton Auditores Independentes. All rights reserved │ GLAI | 11 |
 | Balance Sheets September 30, 2021 and December 31, 2020 (In thousands of Reais) |
| Parent Company | Consolidated | ||||
| Assets | Note | September 30, 2021 | December 31, 2020 | September 30, 2021 | December 31, 2020 |
| Current | |||||
| Cash and Cash Equivalents | 6 | 343,832 | 423,937 | 1,043,358 | 662,830 |
| Financial Investments | 7 | 373 | 236 | 89,943 | 628,343 |
| Restricted Cash | 8 | 4,298 | 4,194 | 210,523 | 355,769 |
| Trade Receivables | 9 | - | - | 638,864 | 739,699 |
| Inventories | 10 | - | - | 239,001 | 195,638 |
| Prepayment to Suppliers and Third-Parties | 11 | 57 | 10,441 | 264,716 | 318,769 |
| Taxes to Recover | 12 | 3,504 | 6,295 | 157,677 | 186,955 |
| Rights from Derivative Transactions | 34.2 | - | - | 2,602 | 12,526 |
| Dividends and Interest on Shareholders’ Equity to Receive | - | 24,120 | - | - | |
| Other Credits | 9,045 | 9,640 | 121,537 | 144,822 | |
| Total Current | 361,109 | 478,863 | 2,768,221 | 3,245,351 | |
| Noncurrent | |||||
| Financial Investments | 7 | - | - | 289 | 992 |
| Restricted Cash | 8 | 3 | 7 | 97,343 | 188,838 |
| Deposits | 14 | 48,313 | 118,261 | 1,898,858 | 2,058,455 |
| Advances to Suppliers | 11 | - | - | 97,332 | 89,701 |
| Taxes to Recover | 12 | 13,060 | 12,102 | 120,186 | 318,404 |
| Deferred Taxes | 13 | 53,298 | 53,492 | 53,541 | 53,563 |
| Other Credits | - | - | 33,455 | 34,338 | |
| Credits with Related Companies | 29.1 | 7,024,325 | 4,897,331 | - | - |
| Rights from Derivative Transactions | 34.2 | 107,290 | 87,663 | 107,290 | 116,283 |
| Investments | 15 | - | 574,717 | - | 815 |
| Property, Plant & Equipment | 16 | 367,745 | 68,660 | 5,968,074 | 4,960,288 |
| Intangible Assets | 17 | - | - | 1,810,486 | 1,747,108 |
| Total Noncurrent | 7,614,034 | 5,812,233 | 10,186,854 | 9,568,785 | |
| Total | 7,975,143 | 6,291,096 | 12,955,075 | 12,814,136 | |
The accompanying notes are an integral part of the Parent Company and Consolidated Quarterly Information (ITR).
| 12 |
| Balance Sheets September 30, 2021 and December 31, 2020 (In thousands of Reais) |
| Parent Company | Consolidated | ||||
| Liabilities | Note | September 30, 2021 | December 31, 2020 | September 30, 2021 | December 31, 2020 |
| Current | |||||
| Loans and Financing | 18 | 163,272 | 638,964 | 1,848,112 | 2,353,279 |
| Leases to Pay | 19 | - | - | 2,138,765 | 1,317,008 |
| Suppliers | 20 | 65,551 | 72,702 | 1,773,284 | 1,612,536 |
| Suppliers - Forfaiting | 21 | - | - | 23,629 | - |
| Labor Liabilities | 162 | 181 | 373,417 | 334,670 | |
| Taxes to Collect | 22 | 907 | 292 | 61,876 | 73,614 |
| Landing Fees | - | - | 634,353 | 907,958 | |
| Advance Ticket Sales | 23 | - | - | 2,297,031 | 2,050,799 |
| Frequent-Flyer Program | 24 | - | - | 1,236,598 | 1,258,502 |
| Prepayment from Customers | - | - | 88,731 | 27,897 | |
| Provisions | 25 | - | - | 330,648 | 169,381 |
| Liabilities with Derivative Transactions | 34.2 | - | - | - | 5,297 |
| Other Liabilities | 52 | - | 408,107 | 287,275 | |
| Total Current | 229,944 | 712,139 | 11,214,551 | 10,398,216 | |
| Noncurrent | |||||
| Loans and Financing | 18 | 9,572,740 | 6,990,749 | 9,950,575 | 7,623,687 |
| Leases to Pay | 19 | - | - | 6,961,029 | 6,267,184 |
| Suppliers | 20 | 16 | - | 38,742 | 32,658 |
| Labor Liabilities | - | - | 28,079 | - | |
| Taxes to Collect | 22 | - | - | 25,964 | 32,362 |
| Landing Fees | - | - | 284,302 | - | |
| Frequent-Flyer Program | 24 | - | - | 338,576 | 322,460 |
| Provisions | 25 | - | - | 1,756,620 | 1,353,515 |
| Deferred Taxes | 13 | - | - | 10,211 | 219,634 |
| Liabilities to Related Parties | 29.1 | 6,523 | 8,791 | - | - |
| Provision for Investment Losses | 15 | 15,863,999 | 12,670,479 | - | - |
| Other Liabilities | 581,535 | 316,030 | 626,040 | 331,479 | |
| Total Noncurrent | 26,024,813 | 19,986,049 | 20,020,138 | 16,182,979 | |
| Shareholders’ Equity | |||||
| Share Capital | 26.1 | 4,041,424 | 3,009,436 | 4,041,424 | 3,009,436 |
| Shares to Issue | 12 | 1,180 | 12 | 1,180 | |
| Treasury Shares | 26.2 | (41,514) | (62,215) | (41,514) | (62,215) |
| Capital Reserves | 202,258 | 207,246 | 202,258 | 207,246 | |
| Equity Valuation Adjustments | (1,084,209) | (577,369) | (1,084,209) | (577,369) | |
| Accumulated Losses | (21,397,585) | (16,985,370) | (21,397,585) | (16,985,370) | |
| Negative Shareholders’ Equity (Deficit) Attributable to the Parent Company | (18,279,614) | (14,407,092) | (18,279,614) | (14,407,092) | |
| Minority Interest | - | - | - | 640,033 | |
| Total Shareholders’ Equity (Deficit) | (18,279,614) | (14,407,092) | (18,279,614) | (13,767,059) | |
| Total | 7,975,143 | 6,291,096 | 12,955,075 | 12,814,136 | |
The accompanying notes are an integral part of the Parent Company and Consolidated Quarterly Information (ITR).
| 13 |
| Income Statement Periods ended on September 30, 2021 and 2020 (In thousands of Brazilian Reais - R$, except basic and diluted loss per share) |
| Parent Company | ||||||
| Three-month period ended on | Nine-month period ended on | |||||
| Note | September 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2020 | ||
| Operating Revenues (Expenses) | ||||||
| Selling Expenses | (24) | - | (417) | - | ||
| Administrative Expenses | (17,349) | (6,095) | (121,764) | (13,265) | ||
| Other Revenues and Expenses, Net | 2,262 | (18,289) | 2,742 | 357,970 | ||
| Total Operating Expenses | 31 | (15,111) | (24,384) | (119,439) | 344,705 | |
| Equity Earnings (Loss) | 15 | (2,133,276) | (1,564,142) | (3,843,053) | (5,354,694) | |
| Operating Loss before Financial Income (Expenses) and Income Taxes | (2,148,387) | (1,588,526) | (3,962,492) | (5,009,989) | ||
| Financial Income (Expenses) | ||||||
| Financial Revenues | 103,069 | 244,748 | 297,928 | 1,010,892 | ||
| Financial Expenses | (188,170) | (272,462) | (590,587) | (1,013,662) | ||
| Financial Revenues (Expenses), Net | 32 | (85,101) | (27,714) | (292,659) | (2,770) | |
| Financial Income (Expenses) before Exchange Rate Change, Net | (2,233,488) | (1,616,240) | (4,255,151) | (5,012,759) | ||
| Exchange Rate Change, Net | 32 | (292,993) | (108,328) | (156,870) | (990,752) | |
| Loss before Income Tax and Social Contribution | (2,526,481) | (1,724,568) | (4,412,021) | (6,003,511) | ||
| Income Tax and Social Contribution | ||||||
| Current | - | 722 | - | (2,356) | ||
| Deferred | (244) | 4,076 | (194) | 915 | ||
| Total Income Tax and Social Contribution | 13 | (244) | 4,798 | (194) | (1,441) | |
| Loss for the Period | (2,526,725) | (1,719,770) | (4,412,215) | (6,004,952) | ||
| Basic and Diluted Loss | 27 | |||||
| Per Common Share | (0.182) | (0.163) | (0.338) | (0.570) | ||
| Per Preferred Share | (6.405) | (22.340) | (11.893) | (19.964) | ||
The accompanying notes are an integral part of the Parent Company and Consolidated Quarterly Information (ITR).
| 14 |
| Income Statement Periods ended on September 30, 2021 and 2020 (In thousands of Brazilian Reais - R$, except basic and diluted loss per share) |
| Consolidated | ||||||
| Three-month period ended on | Nine-month period ended on | |||||
| Note | September 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2020 | ||
| Net Revenue | ||||||
| Passenger Transportation | 1,767,430 | 879,026 | 4,071,282 | 4,063,662 | ||
| Cargo and Others | 147,621 | 95,894 | 439,768 | 416,833 | ||
| Total Net Revenue | 30 | 1,915,051 | 974,920 | 4,511,050 | 4,480,495 | |
| Cost of Services | 31 | (1,841,205) | (958,970) | (4,720,393) | (4,040,886) | |
| Gross Profit (Loss) | 73,846 | 15,950 | (209,343) | 439,609 | ||
| Operating Revenues (Expenses) | ||||||
| Selling Expenses | (150,030) | (82,257) | (354,855) | (317,431) | ||
| Administrative Expenses | (652,723) | (381,304) | (1,447,946) | (949,021) | ||
| Other Revenues and Expenses, Net | (23,545) | (312,836) | (73,061) | 194,217 | ||
| Total Operating Expenses | 31 | (826,298) | (776,397) | (1,875,862) | (1,072,235) | |
| Operating Loss before Financial Income (Expenses) and Taxes | (752,452) | (760,447) | (2,085,205) | (632,626) | ||
| Financial Income (Expenses) | ||||||
| Financial Revenues | 78,706 | 242,584 | 242,357 | 1,137,231 | ||
| Financial Expenses | (558,898) | (618,460) | (1,606,253) | (2,339,673) | ||
| Financial Revenues (Expenses), Net | 32 | (480,192) | (375,876) | (1,363,896) | (1,202,442) | |
| Income (Expenses) before Exchange Rate Change, Net and Income Taxes | (1,232,644) | (1,136,323) | (3,449,101) | (1,835,068) | ||
| Exchange Rate Change, Net | 32 | (1,486,966) | (551,232) | (1,085,661) | (4,064,660) | |
| Loss before Income Tax and Social Contribution | (2,719,610) | (1,687,555) | (4,534,762) | (5,899,728) | ||
| Income Tax and Social Contribution | ||||||
| Current | (3,356) | (42,093) | (48,944) | (77,946) | ||
| Deferred | 196,241 | 33,723 | 209,224 | 23,059 | ||
| Total Income Tax and Social Contribution | 13 | 192,885 | (8,370) | 160,280 | (54,887) | |
| Loss for the Period | (2,526,725) | (1,695,925) | (4,374,482) | (5,954,615) | ||
| Net Profit (Loss) Attributable to: | ||||||
| Shareholders of the Parent Company | (2,526,725) | (1,719,770) | (4,412,215) | (6,004,952) | ||
| Minority Shareholders | - | 23,845 | 37,733 | 50,337 | ||
| Basic and Diluted Loss | 27 | |||||
| Per Common Share | (0.182) | (0.163) | (0.338) | (0.570) | ||
| Per Preferred Share | (6.405) | (22.340) | (11.893) | (19.964) | ||
The accompanying notes are an integral part of the Parent Company and Consolidated Quarterly Information (ITR).
| 15 |
| Statements of Comprehensive Income Periods ended on September 30, 2021 and 2020 (In thousands of Brazilian reais - R$) |
| Parent Company | |||||
| Three-month period ended on | Nine-month period ended on | ||||
| September 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2020 | ||
| Loss for the Period | (2,526,725) | (1,719,770) | (4,412,215) | (6,004,952) | |
| Other Comprehensive Income that will be Reversed to Income (Expenses) | |||||
| Cash Flow Hedge, Net of Income Tax and Social Contribution | (13,143) | (43,822) | 402,639 | (1,122,171) | |
| Actuarial Losses from Pension Plans and Post-Employment Benefits | - | - | - | 27,287 | |
| Cumulative Adjustment of Conversion into Subsidiaries | (36) | (29) | 501 | (304) | |
| (13,179) | (43,851) | 403,140 | (1,095,188) | ||
| Total Comprehensive Income (Expenses) for the Period | (2,539,904) | (1,763,621) | (4,009,075) | (7,100,140) | |
| Consolidated | |||||
| Three-month period ended on | Nine-month period ended on | ||||
| September 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2020 | ||
| Loss for the Period | (2,526,725) | (1,695,925) | (4,374,482) | (5,954,615) | |
| Other Comprehensive Income that will be Reversed to Income (Expenses) | |||||
| Cash Flow Hedge, Net of Income Tax and Social Contribution | (13,143) | (43,822) | 402,639 | (1,122,171) | |
| Actuarial Losses from Pension Plans and Post-Employment Benefits | - | - | - | 27,287 | |
| Cumulative Adjustment of Conversion into Subsidiaries | (36) | (29) | 773 | (304) | |
| (13,179) | (43,851) | 403,412 | (1,095,188) | ||
| Total Comprehensive Income (Expenses) for the Period | (2,539,904) | (1,739,776) | (3,971,070) | (7,049,803) | |
| Comprehensive Income (Expenses) Attributed to: | |||||
| Shareholders of the Parent Company | (2,539,904) | (1,763,621) | (4,009,075) | (7,100,140) | |
| Minority Shareholders | - | 23,845 | 38,005 | 50,337 | |
The accompanying notes are an integral part of the Parent Company and Consolidated Quarterly Information (ITR).
| 16 |
| Statements of Changes in Shareholders’ Equity Periods ended on September 30, 2021 and 2020 (In thousands of Brazilian reais - R$) |
| Parent Company and Consolidated | ||||||||||||||
| Capital Reserves | Equity Valuation Adjustments | |||||||||||||
| Share Capital | Shares to Issue | Treasury Shares | Bonus on Transfer Options | Special Premium Reserve of the Subsidiary | Share-Based Compensation | Unrealized Income (Expenses) on Hedge | Post-Employment Benefits | Other Comprehensive Income | Effects of Change in Equity Interest | Accumulated Losses | Negative Shareholders’ Equity (Deficit) Attributable to the Parent Company | Non-Controlling Interests
| Total | |
| Balances on December 31, 2019 | 3,008,178 | 584 | (102,543) | 17,497 | 83,229 | 124,550 | (530,043) | (41,045) | - | 759,335 | (10,996,413) | (7,676,671) | 571,254 | (7,105,417) |
| Other Comprehensive Income, Net | - | - | - | - | - | - | (1,122,171) | 27,287 | (304) | - | - | (1,095,188) | (73) | (1,095,261) |
| Net Income (Loss) for the Period | - | - | - | - | - | - | - | - | - | - | (6,004,952) | (6,004,952) | 50,337 | (5,954,615) |
| Total Comprehensive Income (Expenses) for the Period | - | - | - | - | - | - | (1,122,171) | 27,287 | (304) | - | (6,004,952) | (7,100,140) | 50,264 | (7,049,876) |
Capital Increase due to Options Exercised Options | 954 | (954) | - | - | - | - | - | - | - | - | - | - | - | - |
| Prepayment for Future Capital Increase | - | 674 | - | - | - | - | - | - | - | - | - | 674 | - | 674 |
| Transfer of Treasury Shares | - | - | 40,328 | - | - | (40,328) | - | - | - | - | - | - | - | - |
| Effects from Dilution in the Equity Interest | - | - | - | - | 642 | - | - | - | - | - | (690) | (48) | 48 | - |
| Stock Option | - | - | - | - | - | 16,984 | - | - | - | - | - | 16,984 | 689 | 17,673 |
| Balances on September 30, 2020 | 3,009,132 | 304 | (62,215) | 17,497 | 83,871 | 101,206 | (1,652,214) | (13,758) | (304) | 759,335 | (17,002,055) | (14,759,201) | 622,255 | (14,136,946) |
| Balances on December 31, 2020 | 3,009,436 | 1,180 | (62,215) | 17,497 | 83,229 | 106,520 | (1,311,076) | (26,669) | 564 | 759,812 | (16,985,370) | (14,407,092) | 640,033 | (13,767,059) |
| Other Comprehensive Income, Net | - | - | - | - | - | - | 402,639 | - | 501 | - | - | 403,140 | 272 | 403,412 |
| Net Income (Loss) for the Period | - | - | - | - | - | - | - | - | - | (4,412,215) | (4,412,215) | 37,733 | (4,374,482) | |
| Total Comprehensive Income (Expenses) for the Period | - | - | - | - | - | - | 402,639 | - | 501 | - | (4,412,215) | (4,009,075) | 38,005 | (3,971,070) |
| Stock Option | - | - | - | - | - | 15,125 | - | - | - | - | - | 15,125 | 263 | 15,388 |
| Capital Increase due to Stock Options Exercised | 2,088 | (1,168) | - | - | - | - | - | - | - | - | - | 920 | - | 920 |
| Interim Dividends Distributed by the Subsidiary Smiles (Note 26.3) | - | - | - | - | - | - | - | - | - | - | - | - | (236,992) | (236,992) |
| Treasury Shares Sale | - | - | 867 | (279) | - | - | - | - | - | - | - | 588 | - | 588 |
| Transfer of Treasury Shares | - | - | 19,834 | (6,198) | - | (13,636) | - | - | - | - | - | - | - | - |
| Acquisition of Interest from Non-Controlling Shareholders (Notes 1.4, 15 and 26.1) | 606,839 | - | - | - | 744,450 | - | - | - | - | (909,980) | - | 441,309 | (441,309) | - |
| Redemption of Preferred Shares (Note 1.4) | - | - | - | - | (744,450) | - | - | - | - | - | - | (744,450) | - | (744,450) |
| Capital Increase (Note 26.1) | 423,061 | - | - | - | - | - | - | - | - | - | - | 423,061 | - | 423,061 |
| Balances on September 30, 2021 | 4,041,424 | 12 | (41,514) | 11,020 | 83,229 | 108,009 | (908,437) | (26,669) | 1,065 | (150,168) | (21,397,585) | (18,279,614) | - | (18,279,614) |
The accompanying notes are an integral part of the Parent Company and Consolidated Quarterly Information (ITR).
| 17 |
| Cash Flow Statements Periods ended on September 30, 2021 and 2020 (In thousands of Brazilian reais - R$) |
| Parent Company | Consolidated | |||
| September 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2020 | |
| Loss for the Period | (4,412,215) | (6,004,952) | (4,374,482) | (5,954,615) |
| Adjustments to Reconcile the Net Loss to Cash Generated from Operating Activities | ||||
| Depreciation - Aircraft Right of Use | - | - | 444,760 | 652,295 |
| Depreciation and Amortization - Others | - | - | 508,893 | 817,495 |
| Provision for Doubtful Accounts | - | - | 165 | 598 |
| Provision for Legal Proceedings | - | - | 514,974 | 219,160 |
| Provisions for Inventory Obsolescence | - | - | 57 | 608 |
| Reversal of Provision for Losses on Advances to Suppliers | - | (4,705) | - | |
| Recovery of Overdue Credits | - | - | (57,422) | (126,675) |
| Adjustment to Present Value of Assets and Liabilities | - | - | 53,975 | 48,603 |
| Deferred Taxes | 194 | (915) | (209,224) | (23,059) |
| Equity Pickup | 3,843,053 | 5,354,694 | - | - |
| Share-Based Compensation | - | - | 15,388 | 16,984 |
| Sale-Leaseback | - | - | - | (112,591) |
| Actuarial Losses from Post-Employment Benefits | - | - | 13,060 | 8,024 |
| Exchange Rate and Cash Changes, Net | 135,997 | 1,132,507 | 1,041,209 | 3,812,024 |
| Interest on Loans and Leases and Amortization of Costs | 516,928 | 342,241 | 1,362,644 | 1,075,638 |
| Provision for Aircraft and Engine Return | - | - | 334,409 | 90,883 |
| Provision (Reversal) for Deposit Reduction and Maintenance Reserve | - | - | 10,521 | - |
| Write-off of Collateral Deposits for Lease and Maintenance | 89,307 | - | 264,397 | 117,310 |
| Income (Expenses) from Derivatives Recognized in Income (Expenses) | (15,753) | 121,745 | 41,014 | 668,447 |
| Unrealized Income (Expenses) on Derivatives – ESN (*) | (168,199) | (512,876) | (168,199) | (512,876) |
| Provision for Labor Liabilities | - | - | 142,467 | 131,494 |
| Write-off of Property, Plant & Equipment and Intangible Assets | - | 108,538 | 2,495 | 91,617 |
| Other Provisions | - | 1,313 | (4,127) | 54,500 |
| Adjusted Net Income (Expenses) | (10,688) | 542,295 | (67,731) | 1,075,864 |
| Changes in Operating Assets and Liabilities: | ||||
| Trade Receivables | - | - | 100,754 | 451,337 |
| Financial Investments | 4,827 | 5,975 | (43,331) | 231,223 |
| Inventories | - | - | (43,420) | (1,112) |
| Prepayment to Suppliers and Third-Parties | 10,384 | (15) | 51,127 | (139,149) |
| Deposits | (7,345) | (2,270) | (85,535) | (64,624) |
| Taxes to Recover | 1,833 | 6,881 | 284,918 | 47,947 |
| Variable Leases | - | 21,884 | ||
| Suppliers | (6,627) | 15,950 | 156,885 | 336,321 |
| Suppliers - Forfaiting | - | - | 23,629 | (143,010) |
| Labor Liabilities | (19) | 33 | (75,641) | (188,515) |
| Taxes to Collect | 615 | (4,667) | 24,646 | 40,142 |
| Landing Fees | - | - | 10,697 | 52,087 |
| Advance Ticket Sales | - | - | 246,232 | (160,218) |
| Frequent-Flyer Program | - | - | (5,788) | 379,938 |
| Prepayment from Customers | - | - | 60,834 | 3,565 |
| Liabilities with Derivative Transactions | - | - | 131,897 | (749,915) |
| Provisions | - | - | (424,372) | (198,914) |
| Other Credits (Liabilities) | 266,152 | (2,445) | 462,699 | 125,246 |
| Interest Paid | (501,091) | (465,844) | (585,199) | (546,360) |
| Income Tax Paid | - | (2,789) | (42,782) | (51,060) |
| Net Cash (Used in) from Operating Activities | (241,959) | 93,104 | 202,403 | 500,793 |
| 18 |
| Cash Flow Statements Periods ended on September 30, 2021 and 2020 (In thousands of Brazilian reais - R$) |
| Parent Company | Consolidated | |||
| September 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2020 | |
| Loans Receivable from Related Parties | (1,762,666) | (629,303) | - | - |
| Financial Investments in Subsidiary | - | - | 610,425 | 497,777 |
| Restricted Cash | (100) | 2,254 | 38,471 | (108,750) |
| Dividends and Interest on Shareholders’ Equity Received through Subsidiary | 287,128 | 15,002 | - | - |
| Prepayment for Future Capital Increase in Subsidiary | (222,700) | - | - | |
| Prepayment for Property, Plant & Equipment Acquisition, Net | - | - | (232,347) | (91,439) |
| Acquisition of Property, Plant & Equipment | (310,675) | (10,419) | (195,331) | (507,095) |
| Return of Advances for Acquisition of Property, Plant & Equipment | 11,590 | 136,962 | 11,590 | 136,962 |
| Acquisition of Intangible Assets | - | - | (122,462) | (47,910) |
| Net Cash Flows (Used in) from Investment Activities | (1,997,423) | (485,504) | 110,346 | (120,455) |
| Funding of Borrowings | 2,261,773 | 1,367,825 | 2,272,725 | 1,846,113 |
| Loan Payments | (499,663) | (2,131,879) | (672,628) | (2,761,194) |
| Lease Payments - Aircraft | - | (912,287) | (771,447) | |
| Lease Payments - Others | - | - | (11,602) | (12,986) |
| Derivatives Paid (Received) | - | - | - | 21,800 |
| Sale of Treasury Shares | 588 | 588 | - | |
| Acquisition of Interest from Non-Controlling Shareholders | - | (744,450) | - | |
| Dividends and Interest on Shareholders’ Equity Paid to Non-Controlling Shareholders | - | - | (260,131) | (14,811) |
| Capital Increase by Shareholders | 423,061 | - | 423,061 | - |
| Shares to Issue | 920 | 674 | 920 | 674 |
| Net Cash Flows (Used in) from Financing Activities | 2,186,679 | (763,380) | 96,196 | (1,691,851) |
| Exchange Rate Change of the Cash of Subsidiaries Abroad | (27,402) | 145,662 | (28,417) | 164,842 |
| Increase (Decrease) in Cash and Cash Equivalents | (80,105) | (1,010,118) | 380,528 | (1,146,671) |
| Cash and Cash Equivalents at the Start of the Fiscal Year | 423,937 | 1,016,746 | 662,830 | 1,645,425 |
| Cash and Cash Equivalents at the End of the Period | 343,832 | 6,628 | 1,043,358 | 498,754 |
(*) Exchangeable Senior Notes
Transactions that do not affect cash are presented in Note 35 of this Quarterly Information.
The accompanying notes are an integral part of the Parent Company and Consolidated Quarterly Information (ITR).
| 19 |
| Statement of Added Value Periods ended on September 30, 2021 and 2020 (In thousands of Brazilian reais - R$) |
| Parent Company | Consolidated | |||
| September 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2020 | |
| Revenues | ||||
| Passenger, Cargo, and Other Transportation | - | - | 4,738,798 | 4,681,010 |
| Other Operating Revenues | 62 | 357,970 | 127,503 | 194,217 |
| Provision for Doubtful Accounts | - | - | (165) | (598) |
| 62 | 357,970 | 4,866,136 | 4,874,629 | |
| Inputs Acquired from Third Parties (includes ICMS and IPI) | ||||
| Fuel and Lubricant Suppliers | - | - | (1,659,764) | (1,506,552) |
| Materials, Energy, Third-Party Services, and Others | (110,591) | (8,567) | (2,355,433) | (961,465) |
| Aircraft Insurance | - | - | (36,918) | (27,332) |
| Sales and Marketing | (345) | (366) | (237,427) | (221,496) |
| Gross Added Value | (110,874) | 349,037 | 576,594 | 2,157,784 |
| Depreciation - Aircraft Right of Use | - | (444,760) | (652,295) | |
| Depreciation and Amortization - Others | - | - | (508,893) | (817,495) |
| Net Added Value Produced by the Company | (110,874) | 349,037 | (377,059) | 687,994 |
| Added Value Received on Transfers | ||||
| Equity Earnings (Loss) | (3,843,053) | (5,354,694) | - | - |
| Financial Revenue | 385,614 | 1,010,892 | 342,144 | 1,137,231 |
| Total Value Added (Distributed) to Distribute | (3,568,313) | (3,994,765) | (34,915) | 1,825,225 |
| Distribution of Value Added: | ||||
| Direct Compensation | 10,077 | 3,137 | 1,044,005 | 794,321 |
| Benefits | 328 | 1 | 151,496 | 128,945 |
| FGTS | - | - | 59,199 | 31,613 |
| Personnel | 10,405 | 3,138 | 1,254,700 | 954,879 |
| Federal | 1,214 | 2,695 | 216,141 | 362,875 |
| State | - | - | 11,815 | 10,362 |
| Municipal | - | - | 1,690 | 2,373 |
| Taxes, Fees, and Contributions | 1,214 | 2,695 | 229,646 | 375,610 |
| Interest and Exchange Rate Change - Aircraft Leases | - | - | 998,953 | 2,833,670 |
| Interest and Exchange Rate Change - Others | 832,283 | 2,004,354 | 1,770,704 | 3,550,926 |
| Rents | - | - | 85,342 | 63,396 |
| Others | - | - | 222 | 1,359 |
| Third-Party Capital Compensation | 832,283 | 2,004,354 | 2,855,221 | 6,449,351 |
| Net Loss for the Period | (4,412,215) | (6,004,952) | (4,412,215) | (6,004,952) |
| Net Profit of the Period Attributed to Non-Controlling Shareholders | - | - | 37,733 | 50,337 |
| Shareholders’ Equity Compensation | (4,412,215) | (6,004,952) | (4,374,482) | (5,954,615) |
| Total Value Added Distributed (to Distribute) | (3,568,313) | (3,994,765) | (34,915) | 1,825,225 |
The accompanying notes are an integral part of the Parent Company and Consolidated Quarterly Information (ITR).
| 20 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
| 1. | Operating Context |
Gol Linhas Aéreas Inteligentes S.A. (“Company” or “GOL”) is a limited liability company incorporated on March 12, 2004 under Brazilian laws. The Company’s bylaws states that the corporate purpose is exercising the equity control of GOL Linhas Aéreas S.A. (“GLA”), which provides scheduled and non-scheduled air transportation services for passengers, develops frequent-flyer programs, among others.
The Company’s shares are traded on B3 S.A. - Brasil, Bolsa, Balcão (“B3”) and on the New York Stock Exchange (“NYSE”) under the ticker GOLL4 and GOL, respectively. The Company adopts B3’s Special Corporate Governance Practices Level 2 and is part of the Special Corporate Governance (“IGC”) and Special Tag Along (“ITAG”) indexes, created to distinguish companies that commit to special corporate governance practices.
The Company’s official headquarters are located at Praça Comandante Linneu Gomes, s/n, Portaria 3, prédio 24, Jardim Aeroporto, São Paulo, Brazil.
| 1.1. | Impacts and Measures taken by the Management regarding Covid-19 |
The third quarter of 2021 was marked as a period of recovery in global economic activity with progress in vaccination and a reduction in the number of cases and deaths due to the pandemic triggered by Covid-19, which directly affects the demand for air tickets in the leisure and corporate markets.
With the fast vaccination pace in the country, which currently has more than half of the population fully vaccinated and 71% with the first dose, according to data from the Press Consortium based on data from the state health offices, the airline industry continues to recover the demand in 3Q21, with higher sales indicators and demand for flights on search platforms, including trips scheduled for the approaching high season.
GOL's operations showed a higher flight volume, with over 36,000 take-offs in the third quarter of 2021, compared to around 20,000 take-offs in the second quarter of 2021. The daily sales volume also grew, going from R$11 million per day on July 1, 2021 to R$23 million per day on September 30, 2021, which continues in October 2021 with a daily peak above R$58 million. Since the pandemic started, GOL, readjusting its airline network, has had consistent occupancy rates at a level close to 80%, reaching 81.4% in the third quarter of 2021. The flexible business model based on a single fleet type is key to following the drop of over 90% in passenger demand during the lockdown and sanitary barriers.
In 2021, GOL has the initiative to transport Covid-19 vaccines for free, with GOLLOG and health professionals to work directly in the fight against the pandemic, besides crediting 1,000 Smiles’ miles for each GOL flight, at no cost. There are also active and strict protocols for aircraft hygiene, as well as safety and health, besides actions to reduce human contact throughout the entire chain.
The Company, through its Executive Committee, with its entire management body, works in a timely manner to support society, monitor demand, and define financial and operational strategies. Following WHO guidelines, the Company is currently working with its ecosystem to help advance the Brazil’s vaccination calendar, which should lead to the resumption of economic activity and also corporate markets of the Brazilian air transportation, as seen in initial forecasts in countries with further advanced immunization.
| 21 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
| 1.1.1 | Impacts on the Parent Company and Consolidated Quarterly Information |
As mentioned, the pandemic’s impacts were immediate and severe for the Company. The main consequence was the reduction in the operational air network, meeting the lower demand, which was verified by the lower Company’s net revenue and margins. The table below details the reclassifications made in the three-month and nine-month periods ended September 30, 2021, which are directly related to the Covid-19 pandemic and additional disclosures:
| Consolidated – September 30, 2021 | ||||||
| Three-month period ended on | Nine-month period ended on | |||||
| Income Statement - Reclassifications | Cost of Services | Other Revenues and Expenses, Net | Cost of Services | Other Revenues and Expenses, Net | ||
| Flight Equip. Depreciation - Idleness | (a) | 56,517 | (56,517) | 199,727 | (199,727) | |
| Personnel Costs - Idleness | (a) | 74 | (74) | 394 | (394) | |
| (a) | Due to the drop in the number of flights operated and labor agreements suspended, where the Company incurred with the burden of time and paid part of the personnel compensation, by analogy to the provisions of CPC 16 (R1) - Inventories, equivalent to IAS 2, expenses and depreciation of flight equipment not directly related to the revenues generated in the period, called idleness, were reclassified from the group of costs of services to the group of other revenues and expenses, net. |
Like all other business organizations, the Company is unable to foresee the duration of the pandemic and the continued extent of the impacts caused by it on future business, results and cash generation. For this reason, when preparing this quarterly information, the Management considered the most recent forecasts available, duly reflected in the Company's business plans. In the period ended September 30, 2021, no adjustment was needed regarding impairments on the Company’s Taxes to Recover, Deferred Tax Assets, Property, Plant & Equipment, and Intangible Assets.
| 1.2. | Capital Structure and Net Current Capital |
Consolidated net current capital on September 30, 2021 is negative by R$8,446,330 (R$7,152,865 negative on December 31, 2020). The variation is mainly due to an increase of Leases to pay totaling R$821,757, as a result of the deferrals negotiation in lease agreements, an increase of R$246,232 in Advance Ticket Sales and R$161,267 in Provisions, which reflect a higher volume of operations expected to coming quarters. Of the consolidated negative net current capital, on September 30, 2021, R$3,533,629 refers to advances from ticket sales and the frequent-flyer program (R$3,309,301 on December 31, 2020), which are expected to be substantially recognized with the Company’s services.
On September 30, 2021, the Company also had a negative shareholders’ equity position attributed to the controlling shareholders of R$18,279,614 (negative by R$14,407,092 on December 31, 2020). The variation observed is due to the pandemic’s impacts on the Company’s operations and mainly due to the negative exchange variation resulting from the devaluation of the Brazilian real, with a loss of R$4,412,215 attributable to the controlling shareholders in the nine-month period ended on September 30, 2021. This impact was partially offset by the capital increase held by the Company's shareholders totaling R$423,061.
The Company is highly sensitive to the domestic macroeconomic scenario and the U.S. dollar, as approximately 96.1% of the indebtedness (loans and financing and leases) is linked to US dollars (“US$”) and 36.3% of costs are also linked to US dollars, while the capacity to adjust ticket prices charged to its customers in order to offset the U.S. dollar appreciation is dependent on capacity (offer) and ticket prices practiced by the competitors.
| 22 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
Over the past four years, the Management has taken many measures to adapt the size of its fleet to demand, matching the supply of seats to the demand level, thus promoting high occupancy rates, reducing costs, and adjusting the capital structure, as well as implementing structuring initiatives for its balance sheet.
In the period ended September 30, 2021, the Company completed important initiatives to strengthen its capital structure, such as: (i) acquiring the interest from Smiles’ non-controlling shareholders; (ii) complementary issues of Senior Secured Notes of US$450 million additional; (iii) capital increase reaching R$423 million, led by the Company's controlling shareholders and with interest in the subscription by minority shareholders and; (iv) fully paying the remaining balance of its principal amortizable debt, guaranteed financing, totaling R$410 million in principal and interest, freeing assets in guarantee. Besides having signed an exclusive codeshare agreement with American Airlines, with a US$200 million estimated investment in the Company's capital and completed the refinancing of the short-term debt with local banks, affecting the financial statements of December 31, 2021 when the operations were concluded. These measures resulted in an upgrade of the credit rating by Fitch and change in outlook of Standard & Poor's from stable to positive and will also provide better financial flexibility for the Company and sustain its liquidity by resuming the volume of its operations during the high season.
With the pandemic’s outbreak, leading to an never seen before economic crisis, the Management reorganized the Company's business and, by continuously monitoring Covid-19’s impacts on economic activity, works in a timely manner to ensure the business sustainability, considering the market’s management and the Company's financial position.
Besides continuously monitoring operations and sales, focused on the economic balance, given the uncertainty, the Management monitors possible additional measures to rebalance the current net capital for the next 12 months. These measures, if adopted, have the purpose to optimize the capital structure and the definition will be based on a rigorous assessment of the economic situation and current prospects.
Our Parent Company and Consolidated Quarterly Information have been prepared on an accounting base of continuity, which includes the continuity of operations, realization of assets and compliance with liabilities and commitments in the usual course of business, in compliance with the business plan prepared by Management, reviewed and approved, at least annually, by GOL's Board of Directors.
Although there is still a substantial uncertainty about how long it will take the airline industry to recover, and that leads to material uncertainty on our ability to continue as a going concern, on September 30, 2021 the Parent Company and Consolidated Quarterly Information, don’t include any adjustment that may result from inability to continue operating.
| 23 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
| 1.3. | Corporate Structure |
The corporate structure of the Company and its subsidiaries, on September 30, 2021, is shown below:
The Company’s equity Interest in the capital of its subsidiaries, on September 30, 2021, is shown below:
| Entity | Incorporation Date | Location | Principal Activity | Type of Control | % of Interest in the share capital | |
| September 30, 2021 | December 31, 2020 | |||||
| GAC | March 23, 2006 | Cayman Islands | Aircraft Acquisition | Direct | 100.00 | 100.00 |
| Gol Finance Inc. | March 16, 2006 | Cayman Islands | Fundraising | Direct | 100.00 | 100.00 |
| Gol Finance | June 21, 2013 | Luxembourg | Fundraising | Direct | 100.00 | 100.00 |
| GLA | April 9, 2007 | Brazil | Flight Transportation | Direct | 100.00 | 100.00 |
| GTX | February 8, 2021 | Brazil | Equity in Companies | Direct | 100.00 | - |
| Smiles Fidelidade (c) | August 1, 2011 | Brazil | Frequent-Flyer Program | (c) | - | 52.60 |
| Smiles Viagens | August 10, 2017 | Brazil | Tourism Agency | Indirect | 100.00 | 52.60 |
| Smiles Fidelidade Argentina (a) | November 7, 2018 | Argentina | Frequent-Flyer Program | Indirect | 100.00 | 52.60 |
| Smiles Viagens Argentina (a) | November 20, 2018 | Argentina | Tourism Agency | Indirect | 100.00 | 52.60 |
| AirFim | November 7, 2003 | Brazil | Investment Fund | Indirect | 100.00 | 100.00 |
| Fundo Sorriso | July 14, 2014 | Brazil | Investment Fund | Indirect | 100.00 | 52.60 |
| Companies in Shareholding: | ||||||
| SCP Trip (b) | April 27, 2012 | Brazil | On-Board Magazine | - | - | 60.00 |
| (a) | Companies with functional currency in Argentine pesos (ARS). |
| (b) | GLA discontinued the investment held in Trip in 2021. |
| (c) | In May 2021, GOL transferred direct control (52.60% of the capital) of Smiles Fidelidade to its GLA subsidiary. In June 2021, the Company completes the corporate transaction to acquire minority interest. On September 1st, Smiles Fidelidade was merged into GLA, see note 1.4 |
The subsidiaries GAC Inc., GOL Finance, and GOL Finance Inc. are entities created for the specific purpose of continuing financial operations and related to the Company's fleet. They do not have their own governing body and decision-making autonomy. Therefore, their assets and liabilities are consolidated in the Parent Company.
| 24 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
GTX S.A., direct subsidiary by the Company, is pre-operational and its corporate purpose is to manage its own assets and have an interest in the capital of other companies.
Smiles Viagens e Turismo S.A. (“Smiles Viagens”) has as main purpose intermediating travel organization services by booking or selling airline tickets, accommodation, tours, among others. The subsidiaries Smiles Fidelidade Argentina and Smiles Viajes Y Turismo S.A. both headquartered in Buenos Aires, Argentina, have the purpose to promote Smiles Program’s operations and the sale of airline tickets in this country.
The investment funds Airfim and Fundo Sorriso, controlled by GLA have the characteristic of an exclusive fund and act as an extension to carry out operations with derivatives and investments, so that the Company consolidates the assets and liabilities of this fund.
| 1.4. | Stock Merger Plan |
Resulting from implementing the proposed merger of shares approved by the shareholders of Smiles and GOL, on June 4, 2021, Smiles Fidelidade became GLA’s wholly-owned subsidiary and, on September 1, 2021, it was merged into GLA.
The incorporation included the following steps:
· withdrawal right exercised on GOL’s 176 preferred shares and Smiles’ 28,220 common shares, with the total R$299 settled on May 12, 2021;
· control of Smiles Fidelidade S.A. transferred to GLA, through a capital increase totaling R$350,075;
· Smiles Fidelidade shares merged into GLA, issuing GLA’s preferred shares and GLA’s redeemable preferred shares for Smiles Fidelidade’s shareholders, followed by the merger of GLA’s shares by the Company, issuing 22,433,975 new preferred shares, 25,707,301 preferred class B shares and 33,113,683 preferred class C shares;
· redeemed the GLA’s and Company’s redeemable preferred shares paying in cash based on redeeming the Company’s redeemable preferred shares to Smiles Fidelidade’s shareholders totaling R$744,450; and
| · | concluded the transaction by merging Smiles Fidelidade into GLA on September 1, 2021. |
| 1.5. | Acquisition of MAP Transportes Aéreos |
On June 8, 2021, GOL signed an agreement to acquire MAP Transportes Aéreos Ltda., a domestic Brazilian airline with routes from Congonhas Airport in São Paulo to regional destinations, considering the Company's commitment to expand the air transportation demand and rationally consolidate in the domestic market as the country's economy recovers from Covid-19.
MAP will be acquired for R$28 million to be paid only after meeting all precedent conditions, through 100,000 preferred shares (GOLL4) at R$28.00 per share and R$25 million in cash in 24 monthly installments. At closing, the Company will assume up to R$100 million in MAP's financial commitments.
This transaction should bring as main benefits: (i) expanded new routes; (ii) higher seat supply to historically under-offered markets; and (iii) improved efficient operations.
The transaction’s conclusion is subject to approval by the National Agency of Civil Aviation (ANAC) and by the Administrative Council for Economic Defense (CADE). However, on September 30, 2021, there is no impact of this transaction on the quarterly information.
| 25 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
| 1.6. | Compliance Program |
In December 2016, as a result of the investigations involving the Company, GOL signed an agreement with the Brazilian Federal Public Ministry ("Agreement"), through which the Company agreed to pay fines and improve its compliance program, in return for the commitment of the Brazilian Federal Public Ministry agreed not file any lawsuit related to activities under the Agreement, as disclosed in the financial statements for the fiscal years ended December 31, 2017, 2018, 2019, and 2020.
The Company voluntarily informed the U.S. Department of Justice (“DOJ”), the Securities and Exchange Commission (“SEC”) and the Brazilian Securities and Exchange Commission (“CVM”) about the Agreement and the external independent investigation conducted by an independent committee of the Company.
The investigation, completed in April 2017, revealed that immaterial payments were made to politically exposed people and the competent authorities were duly reported. None of the current employees, representatives or members of the Management and Board of Directors knew of any illegal purpose behind any of the transactions identified, or of any illegal benefit to the Company from the transactions under investigation.
The Company will keep reporting any future developments regarding this issue, as well as the investigation being conducted by the relevant authorities, which may impose significant fines and possibly other sanctions on us.
Since 2016, the Company has adopted several measures to strengthen and expand its internal control and compliance, detailed in the annual financial statements. In addition, Management constantly reinforces with its employees, customers, and suppliers its commitment to continue improvement in its internal control and compliance programs.
| 2. | Message from the Management, base to Prepare and Present the Parent Company and Consolidated Quarterly Information (ITR) |
The Company’s consolidated quarterly information (ITR) was prepared in accordance with accounting practices adopted in Brazil and the International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”). The accounting practices adopted in Brazil include those in the Brazilian Corporation Law and in the technical pronouncements, guidelines and interpretations issued by the Accounting Pronouncements Committee (“CPC”) and approved by the Federal Accounting Council (“CFC”) and the Brazilian Securities and Exchange Commission (“CVM”).
The Company’s Parent Company and Consolidated Quarterly Information (ITR) was prepared using the Brazilian real (“R$”) as the functional and presentation currency. Figures are expressed in thousands of Brazilian reais, except when otherwise indicated. The items disclosed in foreign currencies are duly identified, when applicable.
The preparation of the Parent Company and Consolidated Quarterly Information (ITR) requires the Management to make judgments, use estimates and adopt assumptions affecting the amounts presented of revenues, expenses, assets and liabilities. However, uncertainty inherent in these judgments, assumptions and estimates could give rise to results that require a significant adjustment to the book value of certain assets and liabilities in future reporting periods.
| 26 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
The Company is continually reviewing its judgments, estimates, and assumptions.
When preparing this Parent Company and Consolidated Quarterly Information (ITR), the Management used disclosure criteria, considering regulatory aspects and the relevance of the transactions to understand the changes in the Company’s economic and financial position and its performance since the end of the fiscal year ended December 31, 2020, as well as the restatement of relevant information included in the annual financial statements disclosed on March 17, 2021.
The Management confirms that all material information in this Parent Company and Consolidated Quarterly Information (ITR) is being demonstrated and corresponds to the information used by the Management in the development of its business management activities.
The Parent Company and Consolidated Quarterly Information (ITR) has been prepared based on historical cost, with the exception of the following material items recognized in the statements of financial position:
| · | short-term investments classified as cash and cash equivalents measured at fair value; |
| · | short-term investments mainly comprising exclusive investment funds, measured at fair value; |
| · | restricted cash measured at fair value; |
| · | derivative financial instruments measured at fair value; and |
| · | investments accounted for using the equity method. |
The Company’s Parent Company and Consolidated Quarterly Information (ITR) for the three-month and nine-month periods ended September 30, 2021 has been prepared assuming that it will continue as going concern, realizing assets and settling liabilities in the normal course of business, as per Note 1.2.
| 3. | Approval of the Parent Company and Consolidated Quarterly Information |
This Parent Company and Consolidated Quarterly Information (ITR) was authorized by the Board of Directors on November 8, 2021.
| 4. | Summary of Significant Accounting Practices |
The Parent Company and Consolidated Quarterly Information (ITR) presented herein was prepared based on policies, accounting practices and estimate calculation methods adopted and presented in detail in the annual financial statements for the year ended December 31, 2020, released on March 17, 2021.
| 4.1. | Information by Segment |
As disclosed in Note 4.23 to the financial statements for the fiscal year ended December 31, 2020, the Company had two operating segments: air transportation and frequent flyer program. After the merger of Smiles Fidelidade by GOL Linhas Aéreas (GLA) on September 1, 2021, in the parent company financial information, revenue from the frequent flyer program with airline products and services are recognized only at when the flight takes place, as the obligation becomes exclusively air transportation, and the frequent flyer program is characterized as a way to promote air transportation and improve the financial flows for GOL. Furthermore, the Management does not separately assess operating results segregated between these segments. Therefore, on September 30, 2021, the Company had a single reportable operating segment - air transportation - as per CPC 22 - "Information by Segment", equivalent to IFRS 8.
| 27 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
| 4.2. | New Accounting Standards and Pronouncements Adopted in the Current Year |
On the first quarter of 2021, CPC issued the Standards Technical Review Nr. 17 resulting from the "Reform of Reference Interest Rate - Phase 2", duly approved by CVM, through CVM Resolution 18/2021, effective for fiscal years beginning after January 1, 2021.
On March 31, 2021, IASB extended the possibility of applying the practical expedient with benefits granted to tenants in lease agreements, for years beginning on or after April 1, 2021, with early adoption allowed.
Both changes did not impact the Company's Quarterly Information. Additionally, in the period ended September 30, 2021, standards or pronouncements issued in previous periods with an impact on the Company's quarterly information did not enter into force.
| 4.3. | Foreign Currency Transactions |
Foreign currency transactions are recorded at the exchange rate change prevailing on the date on which the transactions take place. Monetary assets and liabilities designated in foreign currency are calculated based on the exchange rate change on the balance sheet date. Any difference resulting from the translation of currencies is recorded under the item “Exchange rate change, net” in the income statement.
The main exchange rates in reais in effect on the base date of this Parent Company and Consolidated Quarterly Information (ITR) are as follows:
| Final Rate | Average Rate | |||
| September 30, 2021 | December 31, 2020 | September 30, 2021 | September 30, 2020 | |
| U.S. Dollar | 5.4394 | 5.1967 | 5.3317 | 5.3841 |
| Argentinian Peso | 0.0551 | 0.0617 | 0.0572 | 0.0716 |
| 5. | Seasonality |
Under normal economic and social conditions, the Company expects revenues and operating income (expense) from its flights to be at their highest levels in the summer and winter months of January and July, respectively, and during the last weeks of December and in the year-end holiday period. Domestic demand, mainly from the corporate segment, is highly linked to Brazil’s economic activity level (GDP). Given the high proportion of fixed costs, this seasonality tends to drive changes in operating income (expense) across the fiscal-year quarters. In the current context, considering the unpredictability and uncertainty, operations have negatively correlated with cases and deaths by Covid-19. In other words, in the pandemic’s current context, the recovery of the normalized demand behavior in high-season periods will depend not only on the historical seasonality between different months but also on a lower curve of cases and deaths.
| 28 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
| 6. | Cash and Cash Equivalents |
| Parent Company | Consolidated | |||
| September 30, 2021 | December 31, 2020 | September 30, 2021 | December 31, 2020 | |
| Cash and Bank Deposits | 30,688 | 374,271 | 170,134 | 428,812 |
| Cash Equivalents | 313,144 | 49,666 | 873,224 | 234,018 |
| Total | 343,832 | 423,937 | 1,043,358 | 662,830 |
The breakdown of cash equivalents is as follows:
| Parent Company | Consolidated | |||
| September 30, 2021 | December 31, 2020 | September 30, 2021 | December 31, 2020 | |
| Domestic Currency | ||||
| Private Bonds | 312,460 | 49,014 | 837,628 | 170,359 |
| Automatic Investments | 684 | 652 | 35,569 | 59,936 |
| Total Domestic Currency | 313,144 | 49,666 | 873,197 | 230,295 |
| Foreign Currency | ||||
| Private Bonds | - | - | 27 | 3,723 |
| Total Foreign Currency | - | - | 27 | 3,723 |
| Total | 313,144 | 49,666 | 873,224 | 234,018 |
| 7. | Financial Investments |
| Average Profitability (p.a.) | Parent Company | Consolidated | |||
| September 30, 2021 | December 31, 2020 | September 30, 2021 | December 31, 2020 | ||
| Domestic Currency | |||||
| Government Bonds | 96.1% of CDI | - | - | 289 | 22,465 |
| Investment Funds | 98.5% of CDI | 373 | 236 | 71,283 | 603,698 |
| Total Domestic Currency | 373 | 236 | 71,572 | 626,163 | |
| Foreign Currency | |||||
| Private Bonds | 2.0% | - | - | 18,642 | 2,415 |
| Investment Funds | - | - | 18 | 757 | |
| Total Foreign Currency | - | - | 18,660 | 3,172 | |
| Total | 373 | 236 | 90,232 | 629,335 | |
| Current | 373 | 236 | 89,943 | 628,343 | |
| Noncurrent | - | - | 289 | 992 | |
| 8. | Restricted Cash |
| Average Profitability (p.a.) | Parent Company | Consolidated | |||
| September 30, 2021 | December 31, 2020 | September 30, 2021 | December 31, 2020 | ||
| Domestic Currency | |||||
| Import Financing | 98.0% of CDI | - | - | 61,356 | 213,153 |
| Letter of Guarantee - Legal Proceedings | 88.2% of CDI | 4,301 | 4,201 | 57,381 | 56,440 |
| Letter of Credit – Maintenance Deposit | 98.0% of CDI | - | - | 150,889 | 155,184 |
| Working Capital Loan | 101.1% of CDI | - | - | 3,876 | 52,927 |
| Total Domestic Currency | 4,301 | 4,201 | 273,502 | 477,704 | |
| Foreign Currency | |||||
| Financing with Ex-lm Bank Collateral | 0.2% | - | - | 32,707 | 31,206 |
| Letter of Guarantee - Legal Proceedings | - | - | - | 1,657 | - |
| Hedge Margin | - | - | - | - | 35,697 |
| Total Foreign Currency | - | - | 34,364 | 66,903 | |
| Total | 4,301 | 4,201 | 307,866 | 544,607 | |
| Current | 4,298 | 4,194 | 210,523 | 355,769 | |
| Noncurrent | 3 | 7 | 97,343 | 188,838 | |
| 29 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
The drop in restricted cash linked to import financing and working capital loans, in the period ended September 30, 2021, refers to the use of the asset to pay for import financing operations to which they were linked.
| 9. | Trade Receivables |
| Consolidated | ||
| September 30, 2021 | December 31, 2020 | |
| Domestic Currency | ||
| Credit Card Administrators | 114,461 | 318,869 |
| Travel Agencies | 345,580 | 266,086 |
| Cargo Agencies | 30,617 | 29,902 |
| Partner Airlines | 1,515 | 8,877 |
| Others | 33,771 | 13,845 |
| Total Domestic Currency | 525,944 | 637,579 |
| Foreign Currency | ||
| Credit Card Administrators | 68,313 | 77,616 |
| Travel Agencies | 25,971 | 13,960 |
| Cargo Agencies | 31 | 122 |
| Partner Airlines | 10,873 | 19,464 |
| Others | 25,944 | 9,005 |
| Total Foreign Currency | 131,132 | 120,167 |
| Total | 657,076 | 757,746 |
| Estimated Losses from Doubtful Accounts | (18,212) | (18,047) |
| Total Trade Receivables | 638,864 | 739,699 |
The aging list of trade receivables, net of allowance for expected loss on trade receivables accounts, is as follows:
| Consolidated | ||
| September 30, 2021 | December 31, 2020 | |
| To be Due | ||
| Up to 30 days | 468,975 | 459,338 |
| From 31 to 60 days | 73,757 | 88,893 |
| From 61 to 90 days | 5,714 | 33,121 |
| From 91 to 180 days | 4,197 | 54,832 |
| From 181 to 360 days | 13,086 | 41,484 |
| Above 360 days | 81 | 256 |
| Total to be Due | 565,810 | 677,924 |
| Overdue | ||
| Up to 30 days | 30,197 | 10,278 |
| From 31 to 60 days | 5,896 | 21,677 |
| From 61 to 90 days | 5,421 | 13,501 |
| From 91 to 180 days | 4,134 | 11,474 |
| From 181 to 360 days | 22,266 | 785 |
| Above 360 days | 5,140 | 4,060 |
| Total Overdue | 73,054 | 61,775 |
| Total | 638,864 | 739,699 |
| 30 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
The changes in the doubtful accounts are as follows:
| Consolidated | ||
| September 30, 2021 | December 31, 2020 | |
| Opening Balance of the Fiscal Year | (18,047) | (16,952) |
| (Additions) Reversals | (165) | (1,095) |
| Closing Balance of the Period | (18,212) | (18,047) |
| 10. | Inventories |
| Consolidated | ||
| September 30, 2021 | December 31, 2020 | |
| Consumables | 19,813 | 14,533 |
| Parts and Maintenance Materials | 179,881 | 181,105 |
| Prepayment to Suppliers | 39,307 | - |
| Total | 239,001 | 195,638 |
The changes in the provision for obsolescence are as follows:
| Consolidated | ||
| September 30, 2021 | December 31, 2020 | |
| Balances at the Beginning of the Fiscal Year | (12,862) | (14,302) |
| Additions | (57) | (702) |
| Write-offs | 7,346 | 2,142 |
| Balances at the End of the Period | (5,573) | (12,862) |
| 11. | Prepayment to Suppliers and Third-Parties |
| Parent Company | Consolidated | |||
| September 30, 2021 | December 31, 2020 | September 30, 2021 | December 31, 2020 | |
| Prepayment to Domestic Suppliers | 8 | - | 223,399 | 290,664 |
| Prepayment to Foreign Suppliers | 49 | 10,441 | 89,717 | 68,873 |
| Prepayment for Materials and Repairs | - | - | 48,932 | 48,933 |
| Total Advances to Suppliers | 57 | 10,441 | 362,048 | 408,470 |
| Current | 57 | 10,441 | 264,716 | 318,769 |
| Noncurrent | - | - | 97,332 | 89,701 |
| 31 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
| 12. | Taxes to Recover |
| Parent Company | Consolidated | ||||
| September 30, 2021 | December 31, 2020 | September 30, 2021 | December 31, 2020 | ||
| Prepaid Income Tax and Social Contribution to Recover | 15,543 | 18,335 | 68,378 | 109,231 | |
| PIS and COFINS to Recover (*) | - | - | 191,341 | 387,033 | |
| Value Added Tax (VAT), Abroad | - | - | 3,335 | 3,998 | |
| Others | 1,021 | 62 | 14,809 | 5,097 | |
| Total | 16,564 | 18,397 | 277,863 | 505,359 | |
| Current | 3,504 | 6,295 | 157,677 | 186,955 | |
| Noncurrent | 13,060 | 12,102 | 120,186 | 318,404 | |
(*) During the period ended September 30, 2021, the subsidiary GLA recorded PIS and COFINS extemporaneous tax credits, in the total amount of R$57,422 (R$126,675 in the fiscal year ended December 31, 2020).
| 32 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
| 13. | Deferred Taxes |
| 13.1. | Deferred Taxes (Liabilities) |
The positions of deferred assets and liabilities are presented below and comply with the enforceable offset legal rights that consider taxes levied by the same tax authority under the same tax entity.
| Parent Company | Consolidated | ||||||
| December 31, 2020 | Income (Expenses) | September 30, 2021 | December 31, 2020 | Income (Expenses) | Shareholders’ Equity (*) | September 30, 2021 | |
| Deferred Assets | |||||||
| Tax Losses | 37,921 | - | 37,921 | 37,921 | - | - | 37,921 |
| Negative Basis of Social Contribution | 13,650 | - | 13,650 | 13,650 | - | - | 13,650 |
| Temporary Differences: | |||||||
| Provision for Losses on Other Credits | 2,004 | (188) | 1,816 | 2,004 | (188) | - | 1,816 |
| Provision for Legal Proceedings and Tax Liabilities | (83) | (6) | (89) | (83) | (6) | - | (89) |
| Others | - | - | - | 71 | (5) | 177 | 243 |
| Total Income Tax and Social Contribution Deferred - Assets | 53,492 | (194) | 53,298 | 53,563 | (199) | 177 | 53,541 |
| Deferred Liabilities | |||||||
| Temporary Differences: | |||||||
| Breakage Provision | - | - | - | (193,498) | (41,381) | - | (234,879) |
| Flight Rights | - | - | - | (353,226) | - | - | (353,226) |
| Depreciation of Engines and Parts for Aircraft Maintenance | - | - | - | (194,789) | (5,854) | - | (200,643) |
| Tax Amortization of Goodwill and Customer Portfolio | - | - | - | (127,659) | (3,910) | - | (131,569) |
| Derivative Transactions | - | - | - | (28,902) | 35,478 | - | 6,576 |
| Allowance for Doubtful Accounts and Loss of Other Credits | - | - | - | 201,446 | 11,067 | - | 212,513 |
| Provision for Legal Proceedings and Tax Liabilities | - | - | - | 124,723 | 117,750 | - | 242,473 |
| Aircraft Return | - | - | - | 190,778 | 114,567 | - | 305,345 |
| Aircraft Leases and Others | - | - | - | 10,586 | 63,820 | - | 74,406 |
| Unrealized Profits | - | - | - | 69,843 | (69,843) | - | - |
| Others | - | - | - | 81,064 | (12,271) | - | 68,793 |
| Total Income Tax and Social Contribution Deferred - Liabilities | - | - | - | (219,634) | 209,423 | - | (10,211) |
| Total Effect of Deferred Taxes in the Income (Expenses) | - | (194) | - | - | 209,224 | - | |
(*) Exchange rate change recognized in other comprehensive income.
| 33 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
The Company’s Management considers that the deferred assets and liabilities recognized on September 30, 2021 arising from temporary differences will be realized in proportion to realization of their bases and the expectation of future results.
The Management estimates that active deferred tax credits, recorded on tax losses and a negative social contribution base, may be realized as follows:
| Year | Amount |
| 2023 | 5,034 |
| 2024 | 12,183 |
| 2025 | 9,981 |
| 2025 onwards | 24,373 |
| Total | 51,571 |
The direct subsidiary GLA has tax losses and negative bases of social contribution in the determination of taxable profit, to be offset against 30% of future annual tax profits, with no prescription period, not recorded in the balance sheet, in the following amounts:
| GLA | ||
| September 30, 2021 | December 31, 2020 | |
| Income Tax Losses and Negative Basis of Social Contribution | 11,179,677 | 8,401,388 |
| Potential Tax Credit | 3,801,090 | 2,856,472 |
The reconciliation between tax expense and multiplying the accounting profit by the nominal tax rate for the nine-month periods ended September 30, 2021 and 2020 is shown below:
| Parent Company | ||||
| Three-month period ended on | Nine-month period ended on | |||
| September 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2020 | |
| Loss before Income Tax and Social Contribution | (2,526,481) | (1,724,568) | (4,412,021) | (6,003,511) |
| Combined Nominal Tax Rate | 34% | 34% | 34% | 34% |
| Income Tax and Social Contribution by the Combined Tax Rate | 859,004 | 586,353 | 1,500,087 | 2,041,194 |
| Adjustments to Calculate the Actual Tax Rate: | ||||
| Equity Pickup | (725,314) | (531,808) | (1,306,637) | (1,820,596) |
| Tax Rate Difference of the Income (Expenses) of Subsidiaries | (32,382) | (12,797) | (108,154) | 57,117 |
| Nondeductible Revenues (Expenses), Net | (1,055) | (210) | (24,155) | (618) |
| Exchange Rate Change on Foreign Investments | (103,452) | (36,740) | (50,261) | (278,538) |
| Benefit Constituted (Not Constituted) on Tax Losses, Negative Basis and Temporary Differences | 2,955 | - | (11,074) | - |
| Total Income Tax and Social Contribution | (244) | 4,798 | (194) | (1,441) |
| Income Tax and Social Contribution | ||||
| Current | - | 722 | - | (2,356) |
| Deferred | (244) | 4,076 | (194) | 915 |
| Total Income Tax and Social Contribution | (244) | 4,798 | (194) | (1,441) |
| 34 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
| Consolidated | ||||
| Three-month period ended on | Nine-month period ended on | |||
| September 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2020 | |
| Loss before Income Tax and Social Contribution | (2,719,610) | (1,687,555) | (4,534,762) | (5,899,728) |
| Combined Nominal Tax Rate | 34% | 34% | 34% | 34% |
| Income Tax and Social Contribution by the Combined Tax Rate | 924,667 | 573,769 | 1,541,819 | 2,005,908 |
| Adjustments to Calculate the Actual Tax Rate: | ||||
| Tax Rate Difference of the Income (Expenses) of Subsidiaries | (24,492) | 2,959 | (99,594) | 68,148 |
| Income Tax on Permanent Differences and Other | (17,696) | (45,236) | (86,385) | (40,236) |
| Exchange Rate Change on Foreign Investments | (88,452) | (45,743) | (56,590) | (224,697) |
| Benefit Constituted (Not Constituted) on Tax Losses, Negative Basis and Temporary Differences | (601,142) | (494,119) | (1,138,970) | (1,864,010) |
| Total Income Tax and Social Contribution | 192,885 | (8,370) | 160,280 | (54,887) |
| Income Tax and Social Contribution | ||||
| Current | (3,356) | (42,093) | (48,944) | (77,946) |
| Deferred | 196,241 | 33,723 | 209,224 | 23,059 |
| Total Income Tax and Social Contribution | 192,885 | (8,370) | 160,280 | (54,887) |
| 14. | Deposits |
| Parent Company | Consolidated | |||
| September 30, 2021 | December 31, 2020 | September 30, 2021 | December 31, 2020 | |
| Maintenance Deposits | - | - | 954,740 | 1,032,418 |
| Court Deposits | 45,593 | 49,838 | 595,926 | 667,565 |
| Deposit in Guarantee for Lease Agreements | 2,720 | 68,423 | 348,192 | 358,472 |
| Total | 48,313 | 118,261 | 1,898,858 | 2,058,455 |
| 14.1. | Maintenance Deposits |
The Company makes deposits in US dollars for the maintenance of aircraft and engines, which will be used in future events as established in certain lease agreements.
Maintenance deposits do not exempt the Company, as a lessee, from contractual liabilities related to the maintenance or the risk associated with operating activities. These deposits can be replaced by bank guarantees or letters of credit (SBLC - stand by letter of credit) as established in the aircraft lease. The Company has the right to choose to carry out the maintenance internally or through its suppliers.
The Company has two categories of maintenance deposits:
| · | Maintenance Guarantee: Refers to one-time deposits that are refunded at the end of the lease, and can also be used in maintenance events, depending on negotiations with lessors. The balance of these deposits on September 30, 2021 was R$254,865 (R$273,311 as of December 31, 2020). |
· Maintenance Reserve: Refers to amounts paid monthly based on the use of components and can be used in maintenance events as set by an agreement. On September 30, 2021, the balance referring to these reserves was R$699,875 (R$759,107 on December 31, 2020).
| 35 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
| 14.2. | Court Deposits |
Court deposits and blocks represent guarantees of tax, civil and labor lawsuits, kept in court until the resolution of the disputes to which they are related. Part of the court deposits refers to civil and labor lawsuits arising from succession requests in lawsuits filed against Varig S.A. or also labor lawsuits filed by employees who do not belong to GLA or any related party. Bearing in mind that the Company is not a legitimate party to appear on the liability side of the said lawsuits, whenever blocks occur, their exclusion and respective release of the retained funds is demanded.
| 14.3. | Deposits in Guarantee for Lease Agreements |
As required by the lease agreements, the Company makes guarantee deposits (in US dollars) to the leasing companies, which may be redeemed if replaced by other bank guarantees or fully redeemed at maturity.
| 15. | Investments |
| 15.1. | Breakdown of Investments |
The investment information is shown below:
| Parent Company | Consolidated | |||
| GLA | Smiles Fidelidade (1) | Trip (2) | ||
| Material Information on Subsidiaries on September 30, 2021 | ||||
| Total Number of Shares | 2,762,566,614 | - | - | |
| Share Capital | 5,511,194 | - | - | |
| Interest % | 100.00% | - | - | |
| Shareholders’ Equity (Deficit) | (15,618,589) | - | - | |
| Unrealized Gains (a) | - | - | - | |
| Adjusted Shareholders’ Equity (b) | (15,618,589) | - | - | |
| Net Income (Loss) for the Period | (3,635,346) | 57,753 | - | |
| Unrealized Gains for the Period (a) | - | 7,324 | - | |
| Adjusted Net Income (Expenses) for the Period (b) | (3,635,346) | 37,703 | - | |
| Relevant Information of the Subsidiaries on December 31, 2020 | ||||
| Total Number of Shares | 5,262,335,049 | 124,158,953 | - | |
| Share Capital | 4,554,280 | 254,610 | 1,318 | |
| Interest % | 100.0% | 52.60% | 60.0% | |
| Shareholders’ Equity (Deficit) | (12,670,479) | 1,350,329 | 1,359 | |
| Unrealized Gains (a) | - | (135,578) | - | |
| Adjusted Shareholders’ Equity (b) | (12,670,479) | 574,717 | 815 | |
| Material Information on Subsidiaries on September 30, 2020 | ||||
| Net Income (Loss) for the Period | (5,411,922) | 106,134 | - | |
| Unrealized Gains for the Period (a) | - | 1,396 | - | |
| Adjusted Net Income (Expenses) for the Period (b) | (5,411,922) | 52,228 | - | |
| (1) | In May 2021, the Company transferred control of Smiles Fidelidade to its subsidiary GLA, as shown in the map below. Furthermore, on September 1, 2021, Smiles Fidelidade was merged into GLA. Therefore, the information referring to the shareholding position and shareholders' equity on September 30, 2021 was not presented. The income (expenses) for the period, unrealized profits and adjusted net income (expenses) in question refer only from January to April 2021, considering the 52.60% interest in the capital directly held by the Company. |
| (2) | GLA discontinued the investment held in Trip in 2021. |
(a) Corresponds to transactions involving revenue from mileage redemption for airline tickets by members in the Smiles Program which, for the purposes of consolidated statements, are only accrued when program members are actually transported by GLA.
(b) The net profit (loss) for the adjusted period corresponds to the percentage of the profit (loss) for the period net of unrealized profits. Information on Smiles Fidelidade only includes figures from January to April 2021, considering the 52.60% interest in the capital directly held by the Company.
| 36 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
| 15.2. | Changes in Investments |
| Parent Company | Consolidated | |||
| GLA | Smiles Fidelidade | Total | Trip | |
| Balances on December 31, 2020 | (12,670,479) | 574,717 | (12,095,762) | 815 |
| Prepayment for Future Capital Increase | 222,700 | - | 222,700 | - |
| Equity Earnings (Loss) | (3,880,756) | 37,703 | (3,843,053) | - |
| Unrealized Income (Expenses) on Hedge | 402,639 | - | 402,639 | - |
| Foreign Exchange Rate Change on Investment Conversion Abroad | 71 | 430 | 501 | - |
| Dividends and Interest on Shareholders' Equity | - | (263,008) | (263,008) | - |
| Share-Based Compensation | 14,892 | 233 | 15,125 | - |
| Investment Write-Off | - | - | - | (815) |
| Transfer of Control Smiles Fidelidade (a) | 350,075 | (350,075) | - | - |
| Transaction with Non-Controlling Shareholders - Capital Increase (b) | 1,351,289 | - | 1,351,289 | - |
| Transaction with Non-Controlling Shareholders - Equity Valuation Adjustments (b) | (909,980) | - | (909,980) | - |
| Redemption of Preferred Shares - Corporate Reorganization (c) | (744,450) | - | (744,450) | - |
| Balances on September 30, 2021 | (15,863,999) | - | (15,863,999) | - |
| (a) | On May 25, 2021, the Company transferred to GOL the control of Smiles Fidelidade S.A. through a capital increase totaling R$350,075. |
| (b) | On June 4, 2021, the Company concluded the corporate reorganization stage to acquire the minority shareholders of Smiles. This transaction involved a consideration of R$1,351,289 (R$606,839 in preferred shares and R$744,450 in redeemable preferred shares). The book value of this acquisition was R$441,309, which resulted in recording an equity valuation adjustment totaling R$909,980, recognized directly in the subsidiary's equity. |
| (c) | The redeemable preferred shares were settled in cash on June 23, 2021. |
| 16. | Property, Plant & Equipment |
| 16.1. | Parent Company |
On September 30, 2021, the balance of property, plant and equipment was R$367,745 in GAC (R$68,660 on December 31, 2020), mainly due to advances for aircraft acquisition.
| 37 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
| 16.2. | Consolidated |
| December 31, 2020 | September 30, 2021 | ||||||||||
| Weighted Average Rate (p.a.) | Cost History | Accumulated Depreciation | Net Opening Balance | Additions | Contractual Amendment | Depreciation | Write-Offs | Net Closing Balance | Cost History | Accumulated Depreciation | |
| Flight Equipment | |||||||||||
| Aircraft - ROU(1) with no Purchase Option | 18.03% | 4,020,709 | (1,420,648) | 2,600,061 | 1,198,840 | 254,404 | (431,401) | - | 3,621,904 | 5,379,516 | (1,757,612) |
| Spare Parts and Engines - Own (4) (5) | 6.84% | 1,964,411 | (837,048) | 1,127,363 | 56,259 | - | (99,002) | (2,301) | 1,082,319 | 2,014,323 | (932,004) |
| Spare Parts and Engines - ROU | 33.55% | 84,329 | (47,940) | 36,389 | 2,026 | - | (13,359) | - | 25,056 | 82,717 | (57,661) |
| Aircraft and Engine Overhauling | 41.23% | 3,206,385 | (2,282,042) | 924,343 | 164,509 | - | (323,697) | (77) | 765,078 | 3,172,174 | (2,407,096) |
| Tools | 10.00% | 55,821 | (28,697) | 27,124 | 604 | - | (2,907) | (16) | 24,805 | 56,210 | (31,405) |
| 9,331,655 | (4,616,375) | 4,715,280 | 1,422,238 | 254,404 | (870,366) | (2,394) | 5,519,162 | 10,704,940 | (5,185,778) | ||
| Property, Plant & Equipment in Use | |||||||||||
| Vehicles | 20.00% | 11,264 | (9,572) | 1,692 | 374 | - | (418) | - | 1,648 | 11,638 | (9,990) |
| Machinery and Equipment | 10.00% | 62,841 | (48,417) | 14,424 | 60 | - | (1,999) | (1) | 12,484 | 62,857 | (50,373) |
| Furniture and Fixtures | 10.00% | 32,790 | (20,483) | 12,307 | 59 | - | (1,474) | (46) | 10,846 | 32,507 | (21,661) |
| Computers and Peripherals - Own | 20.00% | 47,487 | (35,837) | 11,650 | 224 | - | (2,751) | (10) | 9,113 | 47,091 | (37,978) |
| Computers and Peripherals – ROU | 26.58% | 21,992 | (15,460) | 6,532 | - | - | (3,678) | - | 2,854 | 21,992 | (19,138) |
| Communication Equipment | 10.00% | 2,233 | (1,871) | 362 | 4 | - | (76) | (8) | 282 | 2,213 | (1,931) |
| Security Equipment | 10.00% | 55 | (32) | 23 | - | - | (2) | - | 21 | 55 | (34) |
| Third-Party Property Improvements - CMA (3) | 12.05% | 107,637 | (107,637) | - | - | - | - | - | - | 107,637 | (107,637) |
| Third-Party Property Improvements | 20.31% | 75,714 | (49,328) | 26,386 | 15 | - | (7,411) | (14) | 18,976 | 75,678 | (56,702) |
| Third-Party Properties - ROU | 35.68% | 27,867 | (15,834) | 12,033 | - | 930 | (6,416) | - | 6,547 | 28,797 | (22,250) |
| Construction in Progress | 14,837 | - | 14,837 | 247 | - | - | - | 15,084 | 15,084 | - | |
| 404,717 | (304,471) | 100,246 | 983 | 930 | (24,225) | (79) | 77,855 | 405,549 | (327,694) | ||
| Impairment Losses (2) | - | (34,330) | - | (34,330) | 5,538 | - | - | - | (28,792) | (28,792) | - |
| Total | 9,702,042 | (4,920,846) | 4,781,196 | 1,428,759 | 255,334 | (894,591) | (2,473) | 5,568,225 | 11,081,697 | (5,513,472) | |
| Prepayment to Suppliers | - | 179,092 | - | 179,092 | 232,347 | - | - | (11,590) | 399,849 | 399,849 | - |
| Total Property, Plant & Equipment | 9,881,134 | (4,920,846) | 4,960,288 | 1,661,106 | 255,334 | (894,591) | (14,063) | 5,968,074 | 11,481,546 | (5,513,472) | |
| (1) | Right of Use (“ROU”). |
| (2) | Refers to provisions for impairment losses for rotable items (spare parts), classified under “Parts and spare engines", recorded by the Company in order to present its assets according to the actual capacity for the generation of expected future benefits. |
| (3) | CMA - Maintenance Center - Confins/MG |
| (4) | On September 30, 2021, the balance of spare parts is granted as a guarantee to the Secured Senior Notes 2026, as per Note 18. |
| (5) | On September 30, 2021, 19 Company's engines are granted as a guarantee to the Spare Engine Facility and the Loan Facility, according to Note 18. |
| 38 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
| 17. | Intangible Assets |
The breakdown of and changes in intangible assets are as follows:
| Consolidated | |||||||||||
| December 31, 2020 | September 30, 2021 | ||||||||||
| Weighted Average Rate (p.a.) | Cost History | Accumulated Amortization | Balance Net Opening | Additions |
Write-Offs | Amortization | Net Closing Balance | Cost History | Accumulated Amortization | ||
| Cost | |||||||||||
| Goodwill | - | 542,302 | - | 542,302 | - | - | - | 542,302 | 542,302 | - | |
| Slots | - | 1,038,900 | - | 1,038,900 | - | - | - | 1,038,900 | 1,038,900 | - | |
| Software | 38.28% | 507,734 | (345,661) | 162,073 | 122,462 | (22) | (57,562) | 226,951 | 489,321 | (262,370) | |
| Others | 20.00% | 10,000 | (6,167) | 3,833 | - | - | (1,500) | 2,333 | 10,000 | (7,667) | |
| Total | 2,098,936 | (351,828) | 1,747,108 | 122,462 | (22) | (59,062) | 1,810,486 | 2,080,523 | (270,037) | ||
The balances of goodwill and airport operating rights (slots) were tested for impairment on December 31, 2020, through the discounted cash flow for each cash-generating unit, giving rise to the value in use, not resulting in impairment.
For the purposes of assessing the impairment, assets are grouped at the lowest level for which there is separately identifiable cash flow (cash-generating unit or CGU). To establish the book value of each CGU, the Company considers not only the recorded intangible assets but also all tangible assets necessary for conducting business, as it is only through the use of this set that the Company will generate economic benefits.
| 39 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
| 18. | Loans and Financing |
The breakdown of and changes in short and long-term debt are as follows:
| Parent Company | |||||||||||||||
| December 31, 2020 | September 30, 2021 | ||||||||||||||
| Maturity | Interest Rate p.a. | Current | Noncurrent | Total | Funding | Unrealized Income (Expenses) on ESN | Principal Payment | Interest Incurred | Interest Paid | Exchange Rate Change | Amortization of Costs and Goodwill | Total | Current | Noncurrent | |
| In US$: | |||||||||||||||
| Guaranteed Funding | 06/2021 | 9.50% | 484,113 | - | 484,113 | - | - | (499,663) | 17,000 | (17,745) | 16,295 | - | - | - | - |
| ESN 2024 (1) | 07/2024 | 3.75% | 37,960 | 1,896,854 | 1,934,814 | - | (168,199) | - | 146,922 | (84,449) | 75,005 | 241 | 1,904,334 | 18,061 | 1,886,273 |
| Senior Notes 2025 | 01/2025 | 7.00% | 98,521 | 3,340,316 | 3,438,837 | - | - | - | 181,941 | (241,093) | 159,635 | 6,895 | 3,546,215 | 41,249 | 3,504,966 |
| Senior Secured Notes 2026 | 06/2026 | 8.00% | 1,848 | 953,802 | 955,650 | 2,261,773 | - | - | 191,860 | (103,935) | 107,594 | 18,098 | 3,431,040 | 86,668 | 3,344,372 |
| Perpetual Notes | - | 8.75% | 16,522 | 799,777 | 816,299 | - | - | - | 53,861 | (53,869) | 38,132 | - | 854,423 | 17,294 | 837,129 |
| Total | 638,964 | 6,990,749 | 7,629,713 | 2,261,773 | (168,199) | (499,663) | 591,584 | (501,091) | 396,661 | 25,234 | 9,736,012 | 163,272 | 9,572,740 | ||
(1) Exchangeable Senior Notes see Note 34.2.
| 40 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
| Consolidated | |||||||||||||||
| December 31, 2020 | September 30, 2021 | ||||||||||||||
| Maturity | Interest Rate p.a. | Current | Noncurrent | Total | Funding | Unrealized Income (Expenses) on ESN | Principal Payment | Interest Incurred | Interest Paid | Exchange Rate Change | Amortization of Costs and Goodwill | Total | Current | Noncurrent | |
| In R$: | |||||||||||||||
| Debentures VII | 03/2022 | 10.49% (3) | 440,918 | 146,170 | 587,088 | - | - | - | 29,298 | (31,360) | - | 4,199 | 589,225 | 589,225 | - |
| Working Capital | 10/2025 | 10.96% | 239,615 | 17,275 | 256,890 | - | - | (71,331) | 14,862 | (16,386) | - | - | 184,035 | 172,431 | 11,604 |
| In US$: | |||||||||||||||
| Guaranteed Funding | 06/2021 | 9.50% | 484,113 | - | 484,113 | - | - | (499,663) | 17,000 | (17,745) | 16,295 | - | - | - | - |
| Import Financing | 01/2022 | 4.98% | 783,659 | - | 783,659 | - | - | (152,258) | 23,272 | (26,359) | 39,461 | - | 667,775 | 667,775 | - |
| Financing with Ex-lm Bank Collateral | 12/2022 | 2.73% | 194,786 | 49,958 | 244,744 | - | - | (124,918) | 1,988 | (2,281) | 5,553 | 3,784 | 128,870 | 115,774 | 13,096 |
| ESN 2024 (1) | 07/2024 | 3.75% | 37,960 | 1,896,854 | 1,934,814 | - | (168,199) | - | 146,922 | (84,449) | 75,005 | 241 | 1,904,334 | 18,061 | 1,886,273 |
| Spare Engine Facility | 09/2024 | 2.44% | 22,771 | 197,009 | 219,780 | - | - | (11,266) | 3,707 | (2,884) | 9,486 | 211 | 219,034 | 91,112 | 127,922 |
| Senior Notes 2025 | 01/2025 | 7.00% | 98,521 | 3,340,316 | 3,438,837 | - | - | - | 181,941 | (241,093) | 159,635 | 6,895 | 3,546,215 | 41,249 | 3,504,966 |
| Senior Secured Notes 2026 | 06/2026 | 8.00% | 1,848 | 953,802 | 955,650 | 2,261,773 | - | - | 191,860 | (103,935) | 107,594 | 18,098 | 3,431,040 | 86,668 | 3,344,372 |
| Loan Facility | 03/2028 | 4.11% | 32,566 | 233,135 | 265,701 | - | - | (11,462) | 8,703 | (5,120) | 15,723 | 191 | 273,736 | 48,523 | 225,213 |
| Perpetual Bonds (2) | - | 8.75% | 16,522 | 789,168 | 805,690 | 10,952 | - | - | 53,805 | (53,587) | 37,563 | - | 854,423 | 17,294 | 837,129 |
| Total | 2,353,279 | 7,623,687 | 9,976,966 | 2,272,725 | (168,199) | (870,898) | 673,358 | (585,199) | 466,315 | 33,619 | 11,798,687 | 1,848,112 | 9,950,575 | ||
(1) Exchangeable Senior Notes see Note 34.2.
(2) On December 31, 2020, includes the removal of related parties, considering the securities issued by Gol Finance, held by GLA, totaling R$10,609. These securities were resold, so there is no removal in the period ended September 30, 2021.
(3) The securities are divided into three series: Series 1 with a CDI rate of 120%; Series 2 with CDI rate + 5.40% and Series 3 with CDI rate + 4.90% p.a.
| 41 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
The total parent company and consolidated loans and financing on September 30, 2021 includes funding costs and premiums totaling R$262,699 and R$270,423, respectively (R$173,086 and R$189,195 on December 31, 2020) that will be amortized over the term of their loans and financing. The total also includes amortized goodwill and fair value of the derivative financial instrument, both referring to ESN 2024, totaling R$33,275 and R$177,474, respectively, on September 30, 2021 (R$42,226 and R$346,030, respectively, on December 31, 2020).
| 18.1. | New Loans and Renegotiations of Financing in the Period ended September 30, 2021 |
The renegotiations detailed below were evaluated under CPC 48 - “Financial Instruments”, corresponding to IFRS 9, and did not meet the definitions to derecognize the liabilities (with the original financial liability extinguished and a new financial liability recognized).
| 18.1.1. | Debentures |
On March 26, 2021, the Annual Debenture Holders' Meeting decided to postpone the payment of the Third Series with maturity on March 28, 2021, to April 7, 2021, totaling R$147,913, and suspend the early maturity of the installment of the First Series, also maturing on March 28, 2021, and also totaling R$147,920.
On April 6, 2021, a Meeting of Debenture Holders was held, resolving on transferring part of the First Series that matured in March 2021 to the Third Series, besides postponing the maturity of the Third Series from April 7, 2021 to May 12 2021 with a new compensation of CDI + 4.90%, totaling R$295,833.
On May 11, 2021, a Meeting of Debenture Holders was held to change the maturity of the Third Series from May 12, 2021 to June 26, 2021.
On June 25, 2021, a Meeting of Debenture Holders was held, which resolved to change the maturity of the Third Series from June 26, 2021 to August 10, 2021.
On August 9, 2021, a Meeting of Debenture Holders was held, which resolved to change the maturity of the Third Series from August 10, 2021 to August 25, 2021.
On August 24, 2021, a Meeting of Debenture Holders was held, which resolved to change the maturity of the Third Series from August 25, 2021 to September 28, 2021.
On September 27, 2021, a Meeting of Debenture Holders was held, which resolved to change the maturity of the First Series and Third Series from September 28, 2021 to October 13, 2021.
On October 11, 2021, a new Meeting of Debenture Holders resolved to change the maturity of the First Series and Third Series from October 13, 2021 to October 27, 2021.
| 18.1.2. | Working Capital |
In the period ended September 30, 2021, the Company, through its subsidiary GLA, renegotiated the maturities of this type of agreement, keeping the operational guarantees. The purpose of these operations is to keep and manage the Company's working capital and the main change was the maturity date and interest rate, disclosed with the movement structure.
| 42 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
| 18.1.3. | Import Financing |
In the period ended September 30, 2021, the Company, through its subsidiary GLA, renegotiated the postponement of maturities of this type of agreement, with changes in the interest rate, disclosed in the table above, and keeping the operational guarantees. These operations are intended to finance engine maintenance, import financing to purchase spare parts and aircraft equipment.
| 18.1.4. | Spare Engine Facility |
In the period ended September 30, 2021, the Company, through its subsidiary GLA, renegotiated changes in the payment flows of this type of agreement, without additional charges.
| 18.1.5. | Senior Secured Notes 2026 |
In May and September 2021, the Company carried out two new Senior Secured Notes funding, as additional and consolidated issues of Senior Secured Notes issued in December 2020, with interest of 8.00% p.a. and maturity in June 2026.
| Date - | Principal | Costs | Interest | Date - | ||
| Transaction | (US$ thousand) | (R$ thousand) | (US$ thousand) | (R$ thousand) | Rate (p.a.) | Maturity |
| May 11, 2021 | 300,000 | 1,569,660 | 11,997 | 62,784 | 8.00% | June 30, 2026 |
| September 28, 2021 | 150,000 | 815,910 | 11,296 | 61,013 | 8.00% | June 30, 2026 |
| 18.1.6. | Loan Facility |
In the period ended September 30, 2021, the Company, through its subsidiary GLA, renegotiated changes in the payment flows of this type of agreement, with an additional cost for deferred installments of 5.90% p.a.
| 18.2. | Loans and Financing – Non-Current |
On September 30, 2021, the maturities of loans and financing recorded in non-current liabilities are as follows:
| 2022 | 2023 | 2024 | 2025 | 2025 onwards | Without Maturity Date | Total | |
| Parent Company | |||||||
| In US$: | |||||||
| ESN 2024 | - | - | 1,886,273 | - | - | - | 1,886,273 |
| Senior Notes 2025 | - | - | - | 3,504,966 | - | - | 3,504,966 |
| Senior Secured Notes 2026 | - | - | - | - | 3,344,372 | - | 3,344,372 |
| Perpetual Notes | - | - | - | - | - | 837,129 | 837,129 |
| Total | - | - | 1,886,273 | 3,504,966 | 3,344,372 | 837,129 | 9,572,740 |
| 43 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
| 2022 | 2023 | 2024 | 2025 | 2025 onwards | Without Maturity Date | Total | |
| Consolidated | |||||||
| In R$: | |||||||
| Working Capital | 2,269 | 4,752 | 2,500 | 2,083 | - | - | 11,604 |
| In US$: | |||||||
| Financing with Ex-lm Bank Collateral | 13,096 | - | - | - | - | - | 13,096 |
| ESN 2024 | - | - | 1,886,273 | - | - | - | 1,886,273 |
| Spare Engine Facility | 5,498 | 24,248 | 98,176 | - | - | - | 127,922 |
| Senior Notes 2025 | - | - | - | 3,504,966 | - | - | 3,504,966 |
| Senior Secured Notes 2026 | - | - | - | - | 3,344,372 | - | 3,344,372 |
| Loan Facility | 12,302 | 33,653 | 34,788 | 36,007 | 108,463 | - | 225,213 |
| Perpetual Notes | - | - | - | - | - | 837,129 | 837,129 |
| Total | 33,165 | 62,653 | 2,021,737 | 3,543,056 | 3,452,835 | 837,129 | 9,950,575 |
The fair value of debt on September 30, 2021 is as follows:
| Parent Company | Consolidated | |||
| Accounting (*) | Fair Value | Accounting (*) | Fair Value | |
| Debentures VII | - | - | 589,225 | 591,666 |
| ESN 2024 | 1,904,334 | 2,141,375 | 1,904,334 | 2,141,375 |
| Senior Notes 2025 | 3,546,215 | 3,406,796 | 3,546,215 | 3,406,796 |
| Senior Secured Notes 2026 | 3,431,040 | 3,642,714 | 3,431,040 | 3,642,714 |
| Perpetual Notes | 854,423 | 764,968 | 854,423 | 764,968 |
| Other Existing Loans | - | - | 1,473,450 | 1,473,450 |
| Total | 9,736,012 | 9,955,853 | 11,798,687 | 12,020,969 |
(*) Net Total of Funding Costs.
| 18.3. | Covenants |
The Company has covenants in the VII Debentures establishing the mandatory measurement of indicators every six months. Debenture holders granted a waiver for non-compliance with the established financial indicators and limits for June 30, 2021.
| 44 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
| 19. | Leases to Pay |
On September 30, 2021, the balance of leases to pay included: (i) R$33,728 for variable payments, not included in the measurement of liabilities, and short-term leases (R$16,252 on December 31, 2020), which fall under the exemption provided for in CPC 06 (R2) - Leases, equivalent to IFRS 16; and (ii) R$9,066,066 referring to the present value on this date of future lease payments (R$7,567,940 on December 31, 2020).
The breakdown and changes in the present value of future lease payments are shown below:
| Consolidated | |||||||||||||
| December 31, 2020 | September 30, 2021 | ||||||||||||
| Weighted Average Rate (p.a.) | Current | Noncurrent | Total | Additions | Alt. Contractual | Payments | Clearing with Deposits | Interest Incurred | Exchange Rate Change | Total | Current | Noncurrent | |
| Right of Use Leases - Without Purchase Option | |||||||||||||
| Agreements in Domestic Currency | 13.13% | 32,530 | 14,985 | 47,515 | - | 930 | (11,602) | - | 4,428 | - | 41,271 | 31,979 | 9,292 |
| Foreign Currency Contracts | 11.76% | 1,268,226 | 6,252,199 | 7,520,425 | 1,200,866 | 254,404 | (912,287) | (37,565) | 651,239 | 347,713 | 9,024,795 | 2,073,058 | 6,951,737 |
| Total Leases | 1,300,756 | 6,267,184 | 7,567,940 | 1,200,866 | 255,334 | (923,889) | (37,565) | 655,667 | 347,713 | 9,066,066 | 2,105,037 | 6,961,029 | |
In the three-month and nine-month periods ended September 30, 2021, the Company directly recognized the cost of services, with R$16,179 and R$47,290, respectively, referring to short-term leases and variable payments.
| 45 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
The future payments of lease agreements are detailed as follows:
| September 30, 2021 | December 31, 2020 | |
| 2021 | 1,185,850 | 2,102,771 |
| 2022 | 2,327,047 | 1,982,685 |
| 2023 | 1,966,258 | 1,642,264 |
| 2024 | 1,543,278 | 1,260,405 |
| 2025 | 1,253,019 | 1,018,896 |
| 2026 Onwards | 4,225,908 | 2,701,509 |
| Total Minimum Lease Payments | 12,501,360 | 10,708,530 |
| Less Total Interest | (3,401,566) | (3,124,338) |
| Present Value of Minimum Lease Payments | 9,099,794 | 7,584,192 |
| Less Current Portion | (2,138,765) | (1,317,008) |
| Noncurrent Portion | 6,961,029 | 6,267,184 |
| 19.1. | Sale-Leaseback Transactions |
During the nine-month period ended September 30, 2021, the Company did not carry out sale-leaseback transactions. In the quarter ended September 30, 2020, the Company carried out 11 sale-leaseback transactions with a gain totaling R$372,712 and R$594,587 in the parent company and consolidated, respectively, recognized in the income statement under “Sale-Leaseback Transactions” in the group other operating revenues and expenses, net, as per Note 31.
| 20. | Suppliers |
| Parent Company | Consolidated | |||
| September 30, 2021 | December 31, 2020 | September 30, 2021 | December 31, 2020 | |
| Domestic Currency | 50,164 | 48,345 | 1,339,628 | 1,164,193 |
| Foreign Currency | 15,403 | 24,357 | 472,398 | 481,001 |
| Total | 65,567 | 72,702 | 1,812,026 | 1,645,194 |
| Current | 65,551 | 72,702 | 1,773,284 | 1,612,536 |
| Noncurrent | 16 | - | 38,742 | 32,658 |
| 21. | Suppliers - Forfaiting |
The Company has contracts that allow suppliers to prepay their receivables with a financial institution and which have been converted into working capital operations described in note 18. On September 30, 2021, the amount recorded under current liabilities from forfaiting operations totaled R$23,629 (on December 31, 2020 there was no current liabilities from forfaiting operations).
| 46 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
| 22. | Taxes to Collect |
| Parent Company | Consolidated | |||
| September 30, 2021 | December 31, 2020 | September 30, 2021 | December 31, 2020 | |
| PIS and COFINS | 780 | 216 | 20,889 | 23,647 |
| Installments | - | - | 35,423 | 41,641 |
| Income Tax on Salaries | 84 | 43 | 24,835 | 33,011 |
| ICMS | - | - | 327 | 472 |
| Income Tax and Social Contribution to Collect | - | - | 181 | 13 |
| Others | 43 | 33 | 6,185 | 7,192 |
| Total | 907 | 292 | 87,840 | 105,976 |
| Current | 907 | 292 | 61,876 | 73,614 |
| Noncurrent | - | - | 25,964 | 32,362 |
| 23. | Advance Ticket Sales |
On September 30, 2021, the balance of Advance from ticket sales classified in current liabilities was R$2,297,031 (R$2,050,799 on December 31, 2020) and is represented by 6,241,768 tickets sold and not yet used (6,691,911 on December 31, 2020) with an average use of 115 days (102 days on December 31, 2020).
Balances of advance from ticket sales are shown net of breakage corresponding to R$256,013 on September 30, 2021 (R$299,188 on December 31, 2020).
On September 30, 2021, the Company has reimbursements payable for advance air tickets totaling R$340,736 (R$253,963 on December 31, 2020), recorded as Other liabilities in current liabilities.
| 24. | Frequent-Flyer Program |
| Consolidated | ||
| September 30, 2021 | December 31, 2020 | |
| Frequent-Flyer Program | 2,123,273 | 2,145,097 |
| Others | 2,904 | 5,817 |
| Breakage | (551,003) | (569,952) |
| Total | 1,575,174 | 1,580,962 |
| Current | 1,236,598 | 1,258,502 |
| Noncurrent | 338,576 | 322,460 |
Breakage consists of the estimate of miles with a high potential to expire without being used. CPC 47 - “Revenue from Agreement with Client”, corresponding to IFRS 15, provides for the recognition of revenue by the estimate (breakage) over the contractual period, therefore, before the miles are redeemed, given that this is not expected before expiration.
| 47 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
| 25. | Provisions |
| Consolidated | ||||
| Post-Employment Benefits | Provisions for Aircraft and Engine Return | Processes Judicial (a) | Total | |
| Balances on December 31, 2020 | 99,549 | 1,030,915 | 392,432 | 1,522,896 |
| Constitution (Reversal) of Provision | 13,060 | 361,433 | 514,974 | 889,467 |
| Provisions Used | - | (255,897) | (168,475) | (424,372) |
| Present Value Adjustment | - | 53,975 | - | 53,975 |
| Exchange Rate Change | - | 45,617 | (315) | 45,302 |
| Balances on September 30, 2021 | 112,609 | 1,236,043 | 738,616 | 2,087,268 |
| On September 30, 2021 | ||||
| Current | - | 330,648 | - | 330,648 |
| Noncurrent | 112,609 | 905,395 | 738,616 | 1,756,620 |
| Total | 112,609 | 1,236,043 | 738,616 | 2,087,268 |
| On December 31, 2020 | ||||
| Current | - | 169,381 | - | 169,381 |
| Noncurrent | 99,549 | 861,534 | 392,432 | 1,353,515 |
| Total | 99,549 | 1,030,915 | 392,432 | 1,522,896 |
| (a) | The provisions used consider write-offs due to the revaluation of estimates and settled processes. |
| 25.1. | Post-Employment Benefits |
The Company offers to its employees’ health care plans that, due to complying with current laws, generate liabilities with post-employment benefits.
The actuarial assumptions applied to measure the post-employment benefit remain the same as those disclosed in the annual financial statements.
| Consolidated | |
| September 30, 2021 | |
| Current Service Cost Recognized in Income (Expenses) | 7,178 |
| Cost of Interests Recognized in Income (Expenses) | 5,882 |
| Total | 13,060 |
| 25.2. | Aircraft and Engine Return |
Such provision considers the costs that meet the contractual conditions for the return of engines maintained under leases with no purchase rights, as well as the costs to reconfigure aircraft when returned as described in the return conditions of the lease agreements. The initial recognition is capitalized as property, plant & equipment, under “Aircraft and Engine Overhauling”.
| 25.3. | Legal Proceedings |
On September 30, 2021, the Company and its subsidiaries are involved in certain legal matters arising from the regular course of their business, which include civil, administrative, tax, social security, and labor lawsuits.
The Company classifies the risk of loss in legal proceedings as probable, possible, or remote. The provision recorded in relation to such lawsuits is set by the Company's Management, based on the analysis of its legal counsel, and reasonably reflects the estimated probable losses.
If the Company has lawsuits whose values are not known or reasonably estimated, but the likelihood of loss is probable, these claims will have their nature will be disclosed.
| 48 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
The Company's Management believes that the provision for tax, civil and labor risks, recorded in accordance with CPC 25 – “Provisions, Contingent Liabilities and Contingent Assets”, equivalent to IAS 37, is sufficient to cover possible losses on administrative and judicial proceedings, as shown below:
| Consolidated | ||||
| Probable Loss | Possible Loss | |||
| September 30, 2021 | December 31, 2020 | September 30, 2021 | December 31, 2020 | |
| Civil | 179,821 | 100,806 | 58,981 | 64,181 |
| Labor | 387,007 | 269,297 | 187,015 | 238,702 |
| Tax | 171,788 | 22,329 | 622,188 | 574,356 |
| Total | 738,616 | 392,432 | 868,184 | 877,239 |
The Company discusses the non-application of the additional 1% rate of COFINS on imports of aircraft, parts, and components, totaling R$149,432 (R$94,790 on December 31, 2020). In the period ended September 30, 2021, given the decisions by the Superior Courts considering the legality of charging an additional rate on imports carried out by airlines, the Company reassessed the loss prognosis, reclassifying from possible loss to probable loss of the related debts.
Details on the other relevant lawsuits were disclosed in the financial statements for the year ended December 31, 2020.
| 26. | Shareholders’ Equity |
| 26.1. | Share Capital |
On June 4, 2021, the Company's Board of Directors resolved to increase the share capital stock to R$606,839, due to the corporate reorganization for Smiles’ merger, with the Company issuing 22,433,975 new preferred shares, 25,707,301 class B preferred shares and 33,113,683 class C preferred shares, with class B and C shares redeemed in June, within the approved merger proposal.
On June 15, 2021, the Board of Directors ratified the capital increase, totaling R$423,061 issuing 171,136,137 common shares and 12,581,185 preferred shares. In this same act, the 171,136,137 common shares were converted into 4,889,603 preferred shares issued by the Company, at the ratio of 35 common shares to 1 preferred share.
Finally, on July 28, 2021, the Company's Board of Directors approved a new capital increase, totaling R$2,088, issuing 430,333 preferred shares, all nominative and with no par value, referring to the stock exercised by employees eligible for the plan, as per Note 28.1.
On September 30, 2021, the share capital totaled R$4,041,424, represented by 3,178,042,063 shares, with 2,863,682,710 common shares and 314,359,353 preferred shares (R$3,009,436, represented by 3,137,706,967 shares, with 2,863,682,710 common shares and 274,024,257 preferred shares on December 31, 2020). The share capital is reduced by the costs to issue shares totaling R$155,618 on September 30, 2021 and December 31, 2020.
| 49 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
The Company’s shares are held as follows:
| September 30, 2021 | December 31, 2020 | |||||
| Common Shares | Preferred Shares | Total | Common Shares | Preferred Shares | Total | |
| Fundo Volluto (2) | 100.00% | - | 20.65% | 100.00% | - | 22.99% |
| Mobi FIA (1) (2) | - | 32.81% | 26.03% | - | 37.57% | 28.93% |
| Path Ltd. (2) | - | 3.45% | 2.74% | - | - | - |
| AirFrance - KLM | - | 1.35% | 1.07% | - | 1.55% | 1.19% |
| Others | - | 1.54% | 1.22% | - | 1.91% | 1.47% |
| Market | - | 60.85% | 48.28% | - | 58.97% | 45.41% |
| Total | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% |
| (1) | Within the Exchangeable Senior Notes 2024, issued in 2019, due to transactions related to the ADS lending facility, Bank of America Corporation acquired 33,863,549 preferred shares, representing 10.8% of the total preferred shares on September 30, 2021. |
| (2) | It refers to legal entities controlled by the controlling shareholders (Constantino family). |
The authorized share capital on September 30, 2021 is R$6 billion. Within the authorized limit, the Company can, once approved by the Board of Directors, increase its capital regardless of any amendment to its by-laws, by issuing shares, without necessarily maintaining the proportion between the different types of shares. Under the law terms, in case of capital increase within the authorized limit, the Board of Directors will define the issuance conditions, including pricing and payment terms.
| 26.2. | Treasury Shares |
On September 30, 2021, the Company had 1,217,285 treasury shares, totaling R$41,514 (1,824,034 shares totaling R$62,215 on December 31, 2020). On September 30, 2021, the closing price of the Company's shares was R$20.71 (R$24.94 on December 31, 2020).
| 26.3. | Interim Dividends - Non-Controlling Shareholders |
On March 25, 2021, Smiles Fidelidade's Board of Directors resolved to distribute interim dividends totaling R$500,000, of with R$263,008 were paid to parent company and R$236,992 allocated to minority shareholders and fully paid on April 16, 2021.
| 50 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
| 27. | Earnings (Loss) per Share |
The Company's earnings (loss) per share was determined as follows:
| Parent Company and Consolidated | ||||||
| Three-month period ended on | ||||||
| September 30, 2021 | September 30, 2020 | |||||
| Common Shares | Preferred Shares | Total | Common Shares | Preferred Shares | Total | |
| Numerator | ||||||
| Loss for the Period Attributed to Controlling Shareholders | (521,991) | (2,004,734) | (2,526,725) | (154,803) | (1,564,967) | (1,719,770) |
| Denominator | ||||||
| Weighted average number of outstanding shares (in thousands) | 2,863,683 | 313,014 | 947,619 | 70,052 | ||
| Adjusted weighted average number of outstanding shares and diluted presumed conversions (in thousands) | 2,863,683 | 313,014 | 947,619 | 70,052 | ||
| Basic Loss per Share | (0.182) | (6.405) | (0.163) | (22.340) | ||
| Diluted Loss per Share | (0.182) | (6.405) | (0.163) | (22.340) | ||
| Parent Company and Consolidated | ||||||
| Nine-month period ended on | ||||||
| September 30, 2021 | September 30, 2020 | |||||
| Common Shares | Preferred Shares | Total | Common Shares | Preferred Shares | Total | |
| Numerator | ||||||
| Loss for the Period Attributed to Controlling Shareholders | (969,011) | (3,443,204) | (4,412,215) | (540,527) | (5,464,425) | (6,004,952) |
| Denominator | ||||||
| Weighted average number of outstanding shares (in thousands) | 2,863,683 | 289,513 | 947,619 | 273,711 | ||
| Adjusted weighted average number of outstanding shares and diluted presumed conversions (in thousands) | 2,863,683 | 289,513 | 947,619 | 273,711 | ||
| Basic Loss per Share | (0.338) | (11.893) | (0.570) | (19.964) | ||
| Diluted Loss per Share | (0.338) | (11.893) | (0.570) | (19.964) | ||
| 51 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
| 28. | Share-Based Compensation |
The conditions of the restricted share and stock options payment plans granted to the Company’s Executive Officers were disclosed in detail in the financial statements for the year ended December 31, 2020 and did not change during the period ended on September 30, 2021.
The movement of the stock options outstanding for the nine-month period ended on September 30, 2021 is as follows:
| 28.1. | Stock Option Plan – GOL |
Number of Stock Options | Average Price Weighted - Period | |
| Options Outstanding on December 31, 2020 | 7,529,612 | 11.59 |
| Options Granted | 658,189 | 21.05 |
| Options Exercised | (135,428) | 6.81 |
| Options canceled and adjustments in estimated prescribed rights | (654,479) | 20.79 |
| Options Outstanding on September 30, 2021 | 7,397,894 | 12.85 |
| Number of Options Exercisable on: | ||
| December 31, 2020 | 5,752,726 | 10.32 |
| September 30, 2021 | 6,596,885 | 11.79 |
The expense recognized in income (expenses) for the period corresponding to the stock option plans for the nine-month period ended on September 30, 2021 was R$7,642 (R$11,241 for the nine-month period ended on September 30, 2020).
| 28.2. | Restricted Share Plan – GOL |
| Total Restricted Shares | |
| Restricted Shares on December 31, 2020 | 1,203,483 |
| Shares Transferred (*) | (595,976) |
| Grants Granted | 858,068 |
| Restricted Shares Cancelled and Adjustments in Estimated Expired Rights | (40,292) |
| Restricted Shares on September 30, 2021 | 1,425,283 |
(*) In the period ended September 30, 2021, the Company transferred 581,499 shares through equity instruments (treasury shares) and the remaining, equivalent to 14,477 shares, were duly settled.
The expense recognized in income (expenses) for the period corresponding to the restricted shares plans for the nine-month period ended on September 30, 2021 was R$6,856 (R$4,964 for the nine-month period ended on September 30, 2020).
| 52 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
| 29. | Transactions with Related Parties |
| 29.1. | Loan Agreements - Noncurrent Assets and Liabilities |
The parent company maintains assets and liabilities from loan agreements with its subsidiary GLA without interest, as shown in the table below:
| Assets | Liabilities | ||||||
| Creditor | Debtor | Type of Transaction | Interest Rate (p.a.) | September 30, 2021 | December 31, 2020 | September 30, 2021 | December 31, 2020 |
| GOL | GLA | Loan | 3.42% | 895,506 | 915,226 | - | - |
| GAC | GLA | Loan | (*) | 1,305,992 | 1,347,546 | 6,523 | 8,791 |
| Gol Finance | GLA | Loan | 3.99% | 4,822,827 | 2,634,559 | - | - |
| Total | 7,024,325 | 4,897,331 | 6,523 | 8,791 | |||
(*) According to the local legislation, the Company applies symbolic interest rates.
On September 30, 2021, the Company had no dividends and interest on shareholders’ equity receivable (R$24,120 on December 31, 2020).
In addition to the values above, the following table shows the other balances between the Companies eliminated in the Consolidated:
| Balances | ||||||
| Creditor | Debtor | Type of Transaction | Maturity of the Agreements | Interest Rate (p.a.) | September 30, 2021 | December 31, 2020 |
| Gol Finance | GOL | Subscription Bonus(*) | 07/2024 | - | 602,350 | 602,350 |
| Gol Finance Inc. | GAC | Loan | 01/2023 | 8.64% | 1,219,881 | 1,149,501 |
| Gol Finance | GAC | Loan | 03/2025 | 3.83% | 1,140,943 | 1,157,009 |
| Gol Finance | Gol Finance Inc. | Loan | 04/2023 | 1.92% | 524,504 | 305,702 |
| Gol Finance Inc. | Gol Finance | Loan | 07/2020 | 11.70% | 1,889 | 1,805 |
| Smiles Fidelidade | GLA | Advance Ticket Purchases | 12/2032 | 4.79% | - | 2,011,291 |
| Smiles Fidelidade | GLA | Mileage Sale | 12/2032 | - | - | 9,627 |
| Smiles Fidelidade | GLA | Management Fees | 12/2032 | - | - | 308 |
| Smiles Fidelidade | GLA | Indemnity Agreement Letter | - | - | - | 530 |
| GLA | Smiles Fidelidade | Shared Services | 12/2032 | - | - | 6,363 |
| GLA | Smiles Fidelidade | Onlending | 12/2032 | - | - | 15,683 |
| Smiles Fidelidade / GLA | Smiles Viagens | Dividends (**) | - | - | 267 | 267 |
| Smiles Viagens | Smiles Fidelidade / GLA | Onlendings (**) | - | - | 7,178 | 414 |
| Smiles Argentina | Smiles Fidelidade / GLA | Onlendings (**) | - | - | 4,310 | 5,152 |
| Total | 3,501,322 | 5,266,002 | ||||
(*) The subsidiary Gol Finance, through Gol Equity Finance, acquired warrants issued by the Company in the context of the issue of Exchangeable Senior Notes.
(**) With the merger of Smiles Fidelidade into GLA on September 1, 2021, the credits (liabilities) were transferred to the merging company.
| 53 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
| 29.2. | Transportation and Consulting Services |
In the course of its operations, the Company, by itself and through its subsidiaries, entered into agreements with the companies listed below, part of the Company’s economic group:
· Expresso Caxiense S.A.: Provision of passenger transportation services in case of an interrupted flight, effective until March 9, 2023; and
· Viação Piracicabana Ltda.: Provision of passenger, baggage, crew, and employee transportation services between airports, effective until September 30, 2026.
In the period ended September 30, 2021, subsidiary GLA recognized a total expense related to these services of R$2,527 (R$5,097 for the period ended September 30, 2020). On the same date, the balance payable to related companies, under “suppliers”, was of R$4,199 (R$3,344 on December 31, 2020), and refers to transportation services with Viação Piracicabana Ltda and Expresso Caxiense S.A.
| 29.3. | Contracts Account Opening UATP (“Universal Air Transportation Plan”) to Grant Credit Limit |
The subsidiary GLA entered into UATP account opening agreements with the related parties indicated below: Aller Participações S.A.; BR Mobilidade Baixada Santista S.A. SPE; Breda Transportes e Serviços S.A.; Comporte Participações S.A.; Empresa Cruz de Transportes Ltda.; Empresa de Ônibus Pássaro Marrom S.A.; Empresa Princesa do Norte S.A.; Expresso Itamarati S.A.; Expresso Maringá do Vale S.A.; Expresso União Ltda.; Glarus Serviços Tecnologia e Participações S.A.; Limmat Participações S.A.; Quality Bus Comércio de Veículos S.A.; Super Quadra Empreendimentos Imobiliários S.A.; Thurgau Participações S.A.; Transporte Coletivo Cidade Canção Ltda.; Turb Transporte Urbano S.A.; Vaud Participações S.A.; and Viação Piracicabana Ltda.; all with no expiration date, whose purpose is to issue credits to purchase airfare issued by the Company. The UATP account (virtual card) is accepted as a payment means on the purchase of airfare and related services, seeking to simplify billing and make feasible payment between the participating companies.
The companies indicated above are owned by the individuals who control FIP Volutto and Mobi FIA, the main shareholders of the Company.
| 29.4. | Commercial Partnership and Maintenance Agreement |
On February 19, 2014, the Company signed an exclusive strategic partnership agreement for business cooperation with AirFrance-KLM. On January 1, 2017, the Company signed an extension of the scope for the inclusion of maintenance services. During the nine-month period ended on September 30, 2021, component maintenance expenses incurred at the AirFrance-KLM workshop were R$81,264 (R$171,290 in the period ended on September 30, 2020). On September 30, 2021, the Company has R$125,597 in the “Suppliers” account under current liabilities (R$72,519 as of December 31, 2020).
| 54 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
| 29.5. | Guarantee-Provision Compensation Agreement |
On October 27, 2020, the Company, through its subsidiary Gol Finance, issued a debt (guaranteed financing) totaling US$250 million, with a guarantee of assets granted by Mobi FIA, by signing the Shares, Assets, and Credit Rights Pledge Agreement and, as a result, will receive a compensation from the Company, as per the agreement. In the period ended September 30, 2021, this debt was fully paid and the guarantees were freed.
| 29.6. | Compensation of the Key Management Personnel |
| Consolidated | ||||
| Three-month period ended on | Nine-month period ended on | |||
| September 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2020 | |
| Salaries, Bonus and Benefits (*) | 10,020 | 7,500 | 39,657 | 24,665 |
| Payroll Charges | 2,010 | 1,973 | 9,740 | 10,610 |
| Share-Based Compensation | 6,745 | 4,740 | 16,335 | 9,941 |
| Total | 18,775 | 14,213 | 65,732 | 45,216 |
(*) Includes compensation for members of management and audit committee.
| 30. | Revenue |
| Consolidated | ||||
| Three-month period ended on | Nine-month period ended on | |||
| September 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2020 | |
| Passenger Transportation (*) | 1,825,856 | 904,950 | 4,208,146 | 4,182,711 |
| Cargo | 90,785 | 72,236 | 257,829 | 217,361 |
| Mileage Revenue | 75,317 | 50,809 | 246,418 | 240,355 |
| Other Revenues | 11,179 | 2,816 | 26,404 | 40,583 |
| Gross Revenue | 2,003,137 | 1,030,811 | 4,738,797 | 4,681,010 |
| Incurring Taxes | (88,086) | (55,891) | (227,747) | (200,515) |
| Net Revenue | 1,915,051 | 974,920 | 4,511,050 | 4,480,495 |
(*) Of the total amount, the amounts of R$49,591 and R$156,753 in the three-month and nine-month periods ended on September 30, 2021 includes revenues from no-show, rescheduling, ticket cancellation (R$28,827 and R$185,780 for the periods of three-month and nine-month periods ended on September 30, 2020).
In the three-month and nine-month periods ended September 30, 2021, revenues earned in the foreign market represent less than 10% of total revenues.
| 55 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
| 31. | Costs of Services and Operational Expenses |
| Parent Company | ||||
| Three-month period ended on | Nine-month period ended on | |||
| September 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2020 | |
| Selling Expenses | ||||
| Sales and Marketing | - | - | (345) | - |
| Other Selling Expenses | (24) | - | (72) | - |
| Total Selling Expenses | (24) | - | (417) | - |
| Administrative Expenses | ||||
| Personnel | (2,599) | (2,202) | (10,411) | (3,626) |
| Services | (11,369) | (7,347) | (35,914) | (10,019) |
| Other Administrative Expenses | (3,381) | 3,454 | (75,439) | 380 |
| Total Administrative Expenses | (17,349) | (6,095) | (121,764) | (13,265) |
| Other Operational Revenues (Expenses) | ||||
| Sale-Leaseback Transactions (a) | - | - | - | 372,712 |
| Other Operating Expenses | 2,262 | (18,289) | 2,742 | (14,742) |
| Total Other Operating Revenues and (Expenses), Net | 2,262 | (18,289) | 2,742 | 357,970 |
| Total | (15,111) | (24,384) | (119,439) | 344,705 |
(a) See Note 19.1
| 56 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
| Consolidated | ||||
| Three-month period ended on | Nine-month period ended on | |||
| September 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2020 | |
| Cost of Services | ||||
| Personnel | (293,485) | (201,214) | (901,952) | (711,389) |
| Fuels and Lubricants | (672,519) | (316,314) | (1,614,834) | (1,453,237) |
| Maintenance, Material and Repairs | (246,401) | (62,829) | (487,732) | (280,896) |
| Passenger Costs | (143,959) | (61,481) | (370,549) | (264,705) |
| Services | (46,407) | (43,908) | (124,399) | (130,324) |
| Landing Fees | (120,628) | (69,584) | (304,382) | (291,657) |
| Depreciation and Amortization | (237,603) | (152,298) | (670,763) | (758,069) |
| Other Operating Costs | (80,203) | (51,342) | (245,782) | (150,609) |
| Total Cost of Services | (1,841,205) | (958,970) | (4,720,393) | (4,040,886) |
| Selling Expenses | ||||
| Personnel | (7,361) | (6,179) | (21,191) | (19,856) |
| Services | (25,978) | (13,136) | (75,960) | (65,222) |
| Sales and Marketing | (106,987) | (60,454) | (231,837) | (221,496) |
| Other Selling Expenses | (9,704) | (2,488) | (25,867) | (10,857) |
| Total Selling Expenses | (150,030) | (82,257) | (354,855) | (317,431) |
| Administrative Expenses | ||||
| Salaries (a) | (203,122) | (158,249) | (514,936) | (382,852) |
| Services | (123,087) | (144,599) | (374,594) | (320,817) |
| Depreciation and Amortization | (24,895) | (30,593) | (83,163) | (96,054) |
| Other Administrative Expenses (b) | (301,619) | (47,863) | (475,253) | (149,298) |
| Total Administrative Expenses | (652,723) | (381,304) | (1,447,946) | (949,021) |
| Other Operating Revenues (Expenses) | ||||
| Sale-Leaseback Transactions (d) | - | - | - | 594,587 |
| Boeing Agreement Expense Recovery | - | - | - | 193,503 |
| Recovery of Taxes | - | 41,169 | 59,874 | 184,462 |
| Idleness - Depreciation and Amortization (c) | (56,517) | (268,318) | (199,727) | (615,667) |
| Idleness - Personnel (c) | (74) | (72,894) | (394) | (160,802) |
| Other Operating Revenues (Expenses) | 33,046 | (12,793) | 67,186 | (1,866) |
| Total Other Operating (Expenses) Revenues, Net | (23,545) | (312,836) | (73,061) | 194,217 |
| Total | (2,667,503) | (1,735,367) | (6,596,255) | (5,113,121) |
| (a) | The Company recognizes compensation paid to members of the Audit Committee, the Board of Directors and the Fiscal Council in the "Salaries" line item. |
| (b) | The increase in these expenses in the period is substantially related to provisions for legal proceedings, see note 25.3. |
| (c) | See Note 1.1 |
| (d) | See Note 19.1 |
| 57 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
| 32. | Financial Income (Expenses) |
| Parent Company | Consolidated | |||||||
| Three-month period ended on | Nine-month period ended on | Three-month period ended on | Nine-month period ended on | |||||
| September 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2020 | |
| Financial Revenues | ||||||||
| Gain from Derivatives | - | - | - | - | 1,169 | 1,157 | 4,128 | 59,669 |
| Derivative Gains - Capped Call (b) | 15,753 | 4,255 | 15,753 | 33,227 | 15,753 | 4,255 | 15,753 | 33,227 |
| Gains from Short-Term Investments | 3,929 | 128 | 5,192 | 5,422 | 9,115 | 19,667 | 22,759 | 173,900 |
| Cash Changes | 241 | 419 | 978 | 1,367 | 4,834 | 14,264 | 14,462 | 22,071 |
| (-) Taxes on Financial Revenues (a) | (1,158) | (440) | (2,047) | (1,497) | (4,394) | (7,577) | (14,149) | (32,460) |
| Unrealized Gains - Conversion Right – ESN (b) | 43,245 | 205,494 | 168,199 | 857,110 | 43,245 | 205,494 | 168,199 | 857,110 |
| Interest Assets | 38,104 | 33,671 | 100,900 | 105,577 | 1,723 | - | 5,540 | - |
| Others | 2,955 | 1,221 | 8,953 | 9,686 | 7,261 | 5,324 | 25,665 | 23,714 |
| Total Financial Revenues | 103,069 | 244,748 | 297,928 | 1,010,892 | 78,706 | 242,584 | 242,357 | 1,137,231 |
| Financial Expenses | ||||||||
| Losses with Derivatives | - | - | - | - | (485) | (3,218) | (1,530) | (421,016) |
| Derivative Losses - Capped Call (b) | 21,587 | (6,473) | - | (154,973) | 21,587 | (6,473) | - | (154,973) |
| Unrealized Loss - Conversion Right – ESN (b) | - | (101,753) | - | (344,233) | - | (101,753) | - | (344,233) |
| Interest on Loans, Financing and Others | (193,881) | (153,859) | (528,534) | (435,832) | (295,891) | (215,817) | (745,981) | (627,810) |
| Banking Commissions and Expenses | (2,196) | (4,272) | (19,380) | (55,293) | (12,117) | (14,732) | (52,639) | (82,737) |
| Losses with Financial Investments | - | - | - | - | - | (210) | - | (63,104) |
| Interest on Leases | - | - | - | - | (210,609) | (226,758) | (655,667) | (529,297) |
| Others | (13,680) | (6,105) | (42,673) | (23,331) | (61,383) | (49,499) | (150,436) | (116,503) |
| Total Financial Expenses | (188,170) | (272,462) | (590,587) | (1,013,662) | (558,898) | (618,460) | (1,606,253) | (2,339,673) |
| Exchange Rate Change, Net | (292,993) | (108,328) | (156,870) | (990,752) | (1,486,966) | (551,232) | (1,085,661) | (4,064,660) |
| Total | (378,094) | (136,042) | (449,529) | (993,522) | (1,967,158) | (927,108) | (2,449,557) | (5,267,102) |
| (a) | Relative to taxes on Financial Revenues (PIS and COFINS), according to Decree 8,426 of April 1, 2015. |
| (b) | See Note 34.2. |
| 58 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
| 33. | Commitments |
On September 30, 2021, the Company had 104 firm orders (95 on December 31, 2020) for aircraft acquisitions with Boeing. These aircraft acquisition commitments include estimates for contractual price increases during the construction phase. The approximate amount of firm orders, in the current period, considers estimated contractual discounts, and corresponds to around R$28,016,577 (R$23,269,198 on December 31, 2020) corresponding to US$5,150,674 on September 30, 2021 (US$4,447,687 on December 31, 2020) and are segregated as follows:
| Consolidated | ||
| September 30, 2021 | December 31, 2020 | |
| 2021 | 452,830 | - |
| 2022 | 2,592,843 | - |
| 2023 | 3,853,333 | 3,353,702 |
| 2024 onwards | 21,117,571 | 19,915,496 |
| Total | 28,016,577 | 23,269,198 |
Of the total commitments presented above, the Company should disburse the amount of R$9,102,884 (corresponding to US$1,673,509 on September 30, 2021) as prepayments for aircraft acquisition, according to the financial flow below:
| Consolidated | ||
| September 30, 2021 | December 31, 2020 | |
| 2021 | 108,788 | 184,951 |
| 2022 | 222,674 | 1,287,077 |
| 2023 | 1,333,076 | 2,657,000 |
| 2024 onwards | 7,438,346 | 4,186,740 |
| Total | 9,102,884 | 8,315,768 |
The Company leases its entire aircraft fleet through a combination of leases without a purchase option. On September 30, 2021, the total fleet had 129 aircraft.
| 34. | Financial Instruments and Risk Management |
Operational activities expose the Company and its subsidiaries to market risk (fuel prices, foreign currency and interest rate), credit risk and liquidity risk. These risks can be mitigated by using exchange swap derivatives, futures and options contracts based on oil, U.S. dollar and interest markets.
Financial instruments are managed by the Risk Policy Committee in line with the Risk Management Policy and submitted to the Board of Directors.
The details regarding the way the Company manages risks have been widely presented in the financial statements related to the year ended December 31, 2020. Since then, there has been no changes.
| 59 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
| 34.1. | Accounting Classifications of Financial Instruments |
The accounting classifications of the Company's consolidated financial instruments on September 30, 2021 and December 31, 2020 are shown below:
| Parent Company | Consolidated | |||||||
| Measured at Fair Value through Income (Expenses) | Cost Amortized | Measured at Fair Value through Income (Expenses) | Cost Amortized | |||||
| September 30, 2021 | December 31, 2020 | September 30, 2021 | December 31, 2020 | September 30, 2021 | December 31, 2020 | September 30, 2021 | December 31, 2020 | |
| Assets | March 31, 2021 | December 31, 2020 | ||||||
| Cash and Bank Deposits | 30,688 | 374,271 | - | - | 170,134 | 428,812 | - | - |
| Cash Equivalents | 313,144 | 49,666 | - | - | 873,224 | 234,018 | - | - |
| Financial Investments | 373 | 236 | - | - | 90,232 | 629,335 | - | - |
| Restricted Cash | 4,301 | 4,201 | - | - | 307,866 | 544,607 | - | - |
| Trade Receivables | - | - | - | - | - | - | 638,864 | 739,699 |
| Rights from Derivative Transactions | 107,290 | 87,663 | - | - | 109,892 | 128,809 | - | - |
| Deposits (a) | - | - | 2,720 | 68,423 | - | - | 1,302,932 | 1,390,890 |
| Dividends and Interest on Shareholders’ Equity to Receive | - | - | - | 24,120 | - | - | - | - |
| Credits with Related Companies | - | - | 7,024,325 | 4,897,331 | - | - | - | - |
| Other Credits | - | - | 9,045 | 9,640 | - | - | 154,992 | 179,160 |
| Liabilities | ||||||||
| Loans and Financing (b) | 177,474 | 346,030 | 9,558,538 | 7,283,683 | 177,474 | 346,030 | 11,621,213 | 9,630,936 |
| Leases to Pay | - | - | - | - | - | - | 9,099,794 | 7,584,192 |
| Suppliers | - | - | 65,567 | 72,702 | - | - | 1,812,026 | 1,645,194 |
| Suppliers - Forfaiting | - | - | - | - | - | - | 23,629 | - |
| Liabilities with Derivative Transactions | - | - | - | - | - | 5,297 | - | - |
| Liabilities to Related Parties | - | - | 6,523 | 8,791 | - | - | - | - |
| Other Liabilities | - | - | 581,587 | 316,030 | - | - | 1,034,147 | 618,754 |
| (a) | Excludes court deposits, as described in Note 14. |
| (b) | The amounts on September 30, 2021 and December 31, 2020, classified as measured at fair value through income (expense), are related to the derivative contracted through Exchange Senior Notes. |
| 60 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
During the period ended on September 30, 2021, there was no change on the classification between categories of the financial instruments.
| 34.2. | Derivative and Non-Derivative Financial Instruments |
The Company's derivative financial instruments were recognized as follows in the Balance sheet:
| Derivatives | Non-Derivative | ||||||
| Fuel | Interest Rate | Exchange Rate | Capped Call | ESN 2024 | Revenue Hedge | Total | |
| Fair Value Changes | |||||||
| Rights (Liabilities) with Derivatives on December 31, 2020 | 34,166 | - | 1,683 | 87,663 | (346,030) | - | (222,518) |
| Gains (Losses) Recognized in Income (Expenses) | - | - | 635 | 19,627 | 168,556 | - | 188,818 |
| Gains Recognized in Equity Valuation Adjustments | 98,015 | - | - | - | - | - | 98,015 |
| Received During the Period | (129,579) | - | (2,318) | - | - | - | (131,897) |
| Derivative Rights (Liabilities) on September 30, 2021 | 2,602 | - | - | 107,290 | (177,474) | - | (67,582) |
| Rights from Derivative Transactions | 2,602 | - | - | 107,290 | - | - | 109,892 |
| Loans and Financing | - | - | - | - | (177,474) | - | (177,474) |
| Changes in the Adjustment of Equity Valuation | |||||||
| Balances on December 31, 2020 | (164,789) | (303,207) | - | - | - | (843,080) | (1,311,076) |
| Fair Value Adjustments during the Period | 98,015 | - | - | - | - | - | 98,015 |
| Adjustments of Hedge Accounting of Revenue | - | - | - | - | - | 243,748 | 243,748 |
| Net Reversals to Income (Expenses) | 55,062 | 4,810 | - | - | - | 1,004 | 60,876 |
| Balances on September 30, 2021 | (11,712) | (298,397) | - | - | - | (598,328) | (908,437) |
| Effects on Income (Expenses) | (55,062) | (4,810) | 635 | 19,627 | 168,556 | (244,752) | (115,806) |
| Net Revenue | - | - | - | - | - | (185) | (185) |
| Cost of Services | (58,484) | - | - | - | - | - | (58,484) |
| Financial Income (Expenses) | 3,422 | (4,810) | 635 | 15,753 | 168,199 | - | 183,199 |
| Exchange Rate Change | - | - | - | 3,874 | 357 | (244,567) | (240,336) |
The Company may adopt hedge accounting for derivatives contracted to hedge cash flow and that qualify for this classification as per CPC 48 - Financial Instruments (equivalent to IFRS 9).
On September 30, 2021, the Company adopts cash flow hedge for the interest rate (mainly the Libor interest rates), and for aeronautical fuel protection and future revenue in US Dollar.
The schedule for realizing the balance of equity valuation adjustments on September 30, 2021, referring to cash flow hedges, is as follows:
| 2021 | 2022 | 2023 | 2024 | 2025 | 2025 onwards | |
| Fuel | (2,483) | (9,229) | - | - | - | - |
| Interest Rate | (1,567) | (7,157) | (28,025) | (32,773) | (34,411) | (194,464) |
| Revenue Hedge | (5,899) | (106,379) | (312,965) | (173,085) | - | - |
| Total | (9,949) | (122,765) | (340,990) | (205,858) | (34,411) | (194,464) |
| 34.3. | Market Risks |
| 34.3.1. | Fuel |
The aircraft fuel prices fluctuate due to the volatility of the price of crude oil by product price fluctuations. To mitigate such risks, the Company can use derivative financial instruments.
| 61 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
The table below shows the sensitivity analysis considering the fluctuation in prices of the aircraft fuel barrel in US dollars, based on the price on September 30, 2021 of US$75.03:
| Fuel | ||
| US$/bbl (WTI) | R$ (000) | |
| Decline in Prices/Barrel (-25%) | 52.92 | (2,091) |
| Decline in Prices/Barrel (-10%) | 67.53 | (919) |
| Increase in Prices/Barrel (+10%) | 82.17 | 783 |
| Increase in Prices/Barrel (+25%) | 88.20 | 2,188 |
| 34.3.2. | Interest Rate |
The Company is mainly exposed to lease transactions indexed to changes in the Libor rate until the aircraft is received. To mitigate such risks, the Company can use derivative financial instruments. On September 30, 2021, the Company did not have derivatives to hedge this exposure.
On September 30, 2021, the Company held financial investments and debts with different types of fees. Its sensitivity analysis of non-derivative financial instruments examined the impact on annual interest rates only for positions with material amounts on September 30, 2021 that were exposed to fluctuations in interest rates, as the scenarios below show. The amounts show the impacts on Income (Expenses) according to the scenarios adopted below:
| Short-Term Investments Net of Financial Debt (a) | ||
| Risk | CDI Rate Drop | Libor Rate Increase |
| Reference Rates | 6.15% | 0.15% |
| Exposed Balances (b) | 668,095 | (3,064,879) |
| Favorable Scenario II (-25%) | 8,710 | 1,117 |
| Favorable Scenario I (-10%) | 3,484 | 447 |
| Adverse Scenario I (+10%) | (3,484) | (447) |
| Adverse Scenario II (+25%) | (8,710) | (1,117) |
| (a) | Refers to the sum of the amounts invested and raised in the financial market and indexed to the CDI and Libor rates. |
| (b) | Book equity balances recorded on September 30, 2021. |
| 34.3.3. | Exchange Rate |
Foreign currency risk derives from the possibility of unfavorable fluctuation of foreign currency to which the Company’s liabilities or cash flows are exposed. The Company is mainly exposed to the exchange rate change of the U.S. dollar.
| 62 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
The Company’s foreign currency exposure is summarized below:
| Parent Company | Consolidated | |||
| September 30, 2021 | December 31, 2020 | September 30, 2021 | December 31, 2020 | |
| Assets | ||||
| Cash, Short-Term Investments and Restricted Cash | 33,497 | 374,979 | 128,766 | 491,258 |
| Trade Receivables | - | - | 131,132 | 120,167 |
| Deposits | 2,720 | 68,423 | 1,302,932 | 1,390,890 |
| Rights from Derivative Transactions | 107,290 | 87,663 | 109,892 | 128,809 |
| Total Assets | 143,507 | 531,065 | 1,672,722 | 2,131,124 |
| Liabilities | ||||
| Loans and Financing | (9,736,012) | (7,629,713) | (11,025,427) | (9,132,988) |
| Leases to Pay | - | - | (9,058,523) | (7,536,677) |
| Suppliers | (15,402) | (24,357) | (472,398) | (481,001) |
| Provision for Aircraft and Engine Return | - | - | (1,236,043) | (1,030,915) |
| Liabilities with Derivative Transactions | - | - | - | (5,297) |
| Total Liabilities | (9,751,414) | (7,654,070) | (21,792,391) | (18,186,878) |
| Exchange Rate Exposure Liabilities | (9,607,907) | (7,123,005) | (20,119,669) | (16,055,754) |
| Commitments Not Recorded in the Statements of Financial Position | ||||
| Future Liabilities Resulting from Firm Aircraft Orders | (28,016,577) | (23,269,198) | (28,016,577) | (23,269,198) |
| Total | (28,016,577) | (23,269,198) | (28,016,577) | (23,269,198) |
| Total Exchange Rate Exposure R$ | (37,624,484) | (30,392,203) | (48,136,246) | (39,324,952) |
| Total Exchange Rate Exposure - US$ | (6,917,028) | (5,848,366) | (8,849,551) | (7,567,293) |
| Exchange Rate (R$/US$) | 5.4394 | 5.1967 | 5.4394 | 5.1967 |
On September 30, 2021, the Company considered the closing exchange rate of R$5.4394/US$1.00 as the likely scenario. The table below shows the sensitivity analysis and the effect on Income (Expenses) of exchange rate fluctuations in the exposure on September 30, 2021:
| Effect on Income (Expenses) | |||
| Exchange Rate | Parent Company | Consolidated | |
| Net Liabilities Exposed to the Risk of Appreciation of the U.S. dollar | 5.4394 | 9,607,907 | 20,119,669 |
| Dollar Depreciation (-25%) | 4.0796 | 2,401,977 | 5,029,917 |
| Dollar Depreciation (-10%) | 4.8955 | 960,791 | 2,011,967 |
| Dollar Appreciation (+10%) | 5.9833 | (960,791) | (2,011,967) |
| Dollar Appreciation (+25%) | 6.7993 | (2,401,977) | (5,029,917) |
| 34.3.4. | Capped Call |
The Company, through Gol Equity Finance, in the context of the pricing of the ESN issued on March 26, April 17 and July 17, 2019, contracted private derivative transactions (Capped call) with part of the note subscribers with the purpose of minimizing the potential dilution of the Company’s preferred shares and ADSs.
| 63 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
| 34.4. | Credit Risk |
The credit risk is inherent in the Company’s operating and financing activities, mainly in cash and cash equivalents, short-term investments and trade receivables. Financial assets classified as cash, cash equivalents, and short-term investments are deposited with counterparties rated local investment grade or higher by S&P or Moody's (between AAA and AA-), pursuant to risk management policies.
Credit limits are set for all customers based on internal credit rating criteria and carrying amounts represent the maximum credit risk exposure. Customer creditworthiness is assessed based on an internal system of extensive credit rating. Outstanding trade receivables are frequently monitored by the Company.
Derivative financial instruments are contracted in the over-the-counter market (OTC) with counterparties rated investment grade or higher, or in a commodities and futures exchange (B3 or NYMEX), thus substantially mitigating credit risk. The Company's obligation is to evaluate counterparty risk involved in financial instruments and periodically diversify its exposure.
| 34.5. | Liquidity Risk |
The Company is exposed to liquidity risk in two distinct ways: (i) market prices, which vary in accordance with the types of assets and markets where they are traded, and (ii) cash flow liquidity risk related to difficulties in meeting the contracted operating liabilities at the maturity dates. To meet the liquidity risk management, the Company invests its resources in liquid assets (federal government bonds, CDBs, and investment funds with daily liquidity) and the Cash Management Policy establishes that the weighted average term of the debt must be greater than the weighted average term of the investment portfolio.
The schedules of financial liabilities held by the Company's consolidated financial liabilities on September 30, 2021 and December 31, 2020 are as follows:
| Parent Company | |||||
| Less than 6 months | 6 to 12 months | 1 to 5 years | More than 5 years | Total | |
| Loans and Financing | 163,272 | - | 8,735,611 | 837,129 | 9,736,012 |
| Suppliers | 65,551 | - | 16 | - | 65,567 |
| Liabilities to Related Parties | - | - | 6,523 | - | 6,523 |
| Other Liabilities | 52 | - | 581,535 | - | 581,587 |
| On September 30, 2021 | 228,875 | - | 9,323,685 | 837,129 | 10,389,689 |
| Loans and Financing | 638,965 | - | 6,201,580 | 789,168 | 7,629,713 |
| Suppliers | 72,702 | - | - | - | 72,702 |
| Liabilities to Related Parties | 8,791 | - | - | - | 8,791 |
| Other Liabilities | - | - | 316,030 | - | 316,030 |
| On December 31, 2020 | 720,458 | - | 6,517,610 | 789,168 | 8,027,236 |
| 64 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
| Consolidated | |||||
| Less than 6 months | 6 to 12 months | 1 to 5 years | More than 5 years | Total | |
| Loans and Financing | 1,780,666 | 67,446 | 9,054,208 | 896,367 | 11,798,687 |
| Leases to Pay | 1,357,346 | 781,419 | 4,918,686 | 2,042,343 | 9,099,794 |
| Suppliers | 1,773,284 | - | 38,742 | - | 1,812,026 |
| Other Liabilities | 408,107 | - | 626,040 | - | 1,034,147 |
| On September 30, 2021 | 5,319,403 | 848,865 | 14,637,676 | 2,938,710 | 23,744,654 |
| Loans and Financing | 2,120,462 | 232,817 | 6,804,167 | 819,520 | 9,976,966 |
| Leases to Pay | 647,850 | 669,158 | 4,763,614 | 1,503,570 | 7,584,192 |
| Suppliers | 1,612,536 | - | 32,658 | - | 1,645,194 |
| Liabilities with Derivative Transactions | 5,297 | - | - | - | 5,297 |
| Other Liabilities | 287,275 | - | 331,479 | - | 618,754 |
| On December 31, 2020 | 4,673,420 | 901,975 | 11,931,918 | 2,323,090 | 19,830,403 |
| 34.6. | Capital Management |
The Company seeks alternatives to capital in order to meet its operational needs, aiming a capital structure that takes into account suitable parameters for the financial costs, the maturities of funding and its guarantees. The Company monitors its financial leverage ratio, which corresponds to net debt, including short and long-term debt. The following table shows the financial leverage:
| Consolidated | ||
| September 30, 2021 | December 31, 2020 | |
| Total Loans and Financing | 11,798,687 | 9,976,966 |
| Total Leases Payable | 9,099,794 | 7,584,192 |
| (-) Cash and Cash Equivalents | (1,043,358) | (662,830) |
| (-) Short-Term Investments | (90,232) | (629,335) |
| (-) Restricted Cash | (307,866) | (544,607) |
| Net Debt | 19,457,025 | 15,724,386 |
| 35. | Non-Cash Transactions |
| Parent Company | ||
| September 30, 2021 | September 30, 2020 | |
| Share-Based Compensation (Investments / Capital Reserves) | 15,125 | 16,984 |
| Unrealized Income (Expenses) of Derivatives (Investments/Equity Valuation Adjustment) | 402,639 | (1,122,172) |
| Actuarial Losses from Post-Employment Benefits | - | 27,287 |
| Capital Increase by Issuing Shares to Minority Shareholders | 606,839 | - |
| Income (Expenses) on the Sale of Treasury Shares | 279 | - |
| Transfer of Treasury Shares | 19,834 | - |
| 65 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
| Consolidated | ||
| September 30, 2021 | September 31, 2020 | |
| Acquisition of Property, Plant & Equipment Through Financing (Property, Plant & Equipment / Loans And Financing) | - | 25,974 |
| Restricted Cash Debt Amortization (Restricted Cash / Loans and Financing) | 198,270 | - |
| Debt Amortization with Deposits Invested (Deposits / Leases to Pay) | 41,973 | 18,920 |
| Right of Use of Flight Equipment (Property, Plant & Equipment / Leases Payable) | 1,200,866 | 131,014 |
| Financial Lease Agreement Renegotiation (Property, Plant & Equipment / Leases Payable) | 255,334 | 115,692 |
| Actuarial Losses from Post-Employment Benefits | - | 27,287 |
| Leaseback (Property, Plant & Equipment/Leases) | - | 35,316 |
| Forfaiting Risk (Suppliers - Forfaiting Risk / Loans) | - | 359,337 |
| Provision for Aircraft Return (Property, Plant & Equipment / Provisions) | 27,024 | - |
| Unrealized Income (Expenses) of Derivatives (Derivative Rights/Equity Valuation Adjustment) | 402,639 | 824,551 |
| Capital Increase by Issuing Shares to Minority Shareholders | 606,839 | - |
| Capital Reserve Recognized | 744,450 | 42,463 |
| Income (Expenses) on the Sale of Treasury Shares | 279 | - |
| Transfer of Treasury Shares | 19,834 | - |
| 66 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
| 36. | Liabilities from Financing Activities |
The changes in and equity instruments issued liabilities from the Company’s financing activities in the periods ended September 30, 2021 and 2020 are as follows:
| 36.1. | Parent Company |
| September 30, 2021 | ||||||||||
| Adjustment to Profit | Non-Cash Transactions | |||||||||
| Opening Balance | Net Cash Flows (Used in) from Financing Activities | Net Cash used in Operating Activities | Exchange Rate Changes, Net | Provision for Interest and Cost Amortization | Unrealized Income (Expenses) on Derivatives | Capital Increase from Non-Controlling Interests | Capital Increase with Shares to be Issued | Income (Expenses) on the Sale and Transfer of Treasury Shares | Closing Balance | |
| Loans and Financing | 7,629,713 | 1,762,110 | (501,091) | 396,661 | 616,818 | (168,199) | - | - | - | 9,736,012 |
| Share Capital | 3,009,436 | 423,061 | - | - | - | - | 606,839 | 2,088 | - | 4,041,424 |
| Shares to Issue | 1,180 | 920 | - | - | - | - | - | (2,088) | - | 12 |
| Treasury Shares | (62,215) | 588 | - | - | - | - | - | - | 20,113 | (41,514) |
| September 30, 2020 | |||||||
| Adjustment to Profit | |||||||
| Opening Balance | Net Cash Flows (Used in) from Financing Activities | Net Cash Flows from Operating Activities | Exchange Rate Changes, Net | Provision for Interest and Cost Amortization | Unrealized Income (Expenses) on Derivatives | Closing Balance | |
| Loans and Financing | 6,595,140 | (764,054) | (465,842) | 2,449,317 | 449,381 | (512,876) | 7,751,066 |
| 67 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
| 36.2. | Consolidated |
| September 30, 2021 | ||||||||||||
| Non-Cash Transactions | Adjustments to Profit | |||||||||||
| Opening Balance | Net Cash Flows (Used in) from Financing Activities | Net Cash Used in Operating Activities | Acquisition of Property, Plant & Equipment under New Agreements and Contractual Amendment | Transaction with Non-Controlling Shareholders, Shares to be Issued and Sale/Transfer of Treasury Shares | Amortization with Linked Assets | Distribution of Interim Dividends | Exchange Rate Changes, Net | Provision for Interest and Cost Amortization | Unrealized Income (Expenses) on Derivatives | Closing Balance | ||
| Loans and Financing | 9,976,966 | 1,600,097 | (585,199) | - | - | (198,270) | - | 466,315 | 706,977 | (168,199) | 11,798,687 | |
| Leases to Pay | 7,584,192 | (923,889) | 21,884 | 1,456,200 | - | (41,973) | - | 347,713 | 655,667 | - | 9,099,794 | |
| Dividends and ISE to Pay (1) | 23,139 | (260,131) | - | - | - | - | 236,992 | - | - | - | - | |
| Share Capital | 3,009,436 | 423,061 | - | - | 608,927 | - | - | - | - | - | 4,041,424 | |
| Shares to Issue | 1,180 | 920 | - | - | (2,088) | - | - | - | - | - | 12 | |
| Treasury Shares | (62,215) | 588 | - | - | 20,113 | - | - | - | - | - | (41,514) | |
| Capital Reserves | 207,246 | (744,450) | 15,125 | - | 724,337 | - | - | - | - | - | 202,258 | |
| (1) | The amount is recorded in the Other Liabilities group, in current liabilities. |
| September 30, 2020 | ||||||||||||||
| Non-Cash Transactions | Adjustment to Profit | |||||||||||||
| Opening Balance | Net Cash Flows (Used in) from Financing Activities | Net Cash Flows from Operating Activities | Property, Plant and Equipment Acquisition Through Financing | Forfaiting | Gains (Losses) Recognized in Equity Valuation Adjustments | Deposit in Guarantee | Write-Offs | Exchange Rate Changes, Net | Provision for Interest and Cost Amortization | Write-Offs and Contractual Amendments | Unrealized Income (Expenses) on Derivatives | Closing Balance | ||
| Loans and Financing | 8,409,841 | (944,306) | (541,766) | 25,974 | 359,337 | - | - | - | 2,945,766 | 541,748 | - | (512,876) | 10,283,718 | |
| Leases to Pay | 6,052,780 | (755,208) | (4,592) | 131,014 | - | - | (18,920) | (150,044) | 2,309,877 | 533,888 | (115,411) | - | 7,983,384 | |
| Derivatives | (127,119) | 21,800 | (749,915) | - | - | 824,551 | - | - | (21,855) | - | - | 103,445 | 50,907 | |
| 68 |
| Notes on the Parent Company and Consolidated Quarterly Information (ITR) September 30, 2021 (In thousands of Brazilian Reais - R$, except when otherwise indicated) |
| 37. | Subsequent Events |
On October 26, 2021, the Company completed the refinancing of short-term loans and financing with local banks in a volume total of R$1,173,550, through the extension of the 7th Series of Debentures in the amount of R$563,333 and the issue of the 8th Series of Simple Non-Convertible Debentures (" Debentures”) in the amount of R$610,217, by GOL Linhas Aéreas S.A. (GLA). The funds from the Debentures will mature in October 2024 and were fully used to amortize the Company's short-term debt, consisting of import financing and working capital lines. With this transaction, there is an extension in the average term of liabilities, improvement in credit metrics and a reduction in the Company's cost of debt. The financial covenants contractually provided for in the 7th and 8th Debentures will be measured as of December 31, 2022.
| 69 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: November 8, 2021
| GOL LINHAS AÉREAS INTELIGENTES S.A. | ||
| By: | /s/ Richard F. Lark, Jr. | |
Name: Richard F. Lark, Jr. Title: Investor Relations Officer | ||