BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
The Brazilian Securities, Commodities and Futures Exchange
QUARTERLY
FINANCIAL
REPORT
Three-month period ended
June 30, 2014
M A N A G E M E N T’S D I S C U S S I O N A N D A N A L I S Y S – 2Q14
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Dear Shareholders,
We are pleased to present to you this discussion and analysis of the financial condition and results of operations
of BM&FBOVESPA S.A. (BM&FBOVESPA or Company or us) for the quarter ended June 30, 2014 (2Q14).
OPERATING PERFORMANCE
Equities and Equity Derivatives (Bovespa Segment)
In the quarter to June 2014 the average daily traded value (ADTV) on markets comprising our Bovespa segment hit R$6.74
billion, an 18.7% decline from the year-ago second quarter, when ADTV peaked to an all-time high. This fall is explained
primarily by a market in retreat prompting a tumble in the volumes of trading both in stocks and equity derivatives (options and
forwards markets). However, this year-on-year comparison is somewhat biased because of the substantial changes in market
conditions and economic landscape in Brazil and globally over the last 12 months, including a plunge in volatility and a
significantly changed macroeconomic outlook. Ultimately, the ADTV over the quarter to June 2014 did provide some measure of
growth, which translates into a 4.4% quarter-over-quarter climb.
Average Daily Trading Value (ADTV)
(In R$ millions, unless otherwise indicated)
Source: BM&FBOVESPA
The 18.3% fall in ADTV on the stock market is due mainly to the decline in quarterly turnover velocity
1
, which hit 66.6% in the
second quarter versus 81.6% one year ago, while the equity market capitalization
2
kept a steady line from the same period
one year earlier at R$2.41 trillion. As compared with the quarter to March 2014, when trading value increased, the average
equity market capitalization rose 7.9% while turnover velocity dropped to 66.6% quarter-on-quarter (from 69.0%).
This quarterly fall in share turnover velocity happened across the stock market as every investor category retreated from stocks
amid a market slowdown pushed mainly by the market’s concerns about the macroeconomic landscape.
Average equity market capitalization - Turnover velocity
Source: BM&FBOVESPA
In addition, as compared to the second quarter one year ago, the market for options on equities and stock indices shed 32.6% in
average daily trading value due mainly to a 63.0% year-on plunge in value traded in options on Vale stocks, which were the
second more actively traded options in the quarter to June 2014, having accounted for 21.6% of the overall value traded in
options on single stocks (versus 37.4% in the comparative quarter, when options on Vale stocks topped the ranking). Moreover,
trading in options on Petrobras stocks fell 3.7% year-on-year despite having topped the ranking for the quarter to account for
1
Turnover velocity for the quarter is defined as the ratio of annualized turnover (value) of stocks traded on the cash equity market over a three-month
period to average equity market capitalization for the same period.
2
Equity market capitalization is a measure of the size of the stock market given by the total market capitalization of all lis ted issuers, where the market
capitalization by issuer is calculated as stock price multiplied by the number of shares outstanding of each listed issuer (Boves pa segment).
Market 2Q14 2Q13
2Q14/2Q13
(%)
1Q14
2Q14/1Q14
(%)
Stocks and Equity Deriv. 6,738.4 8,287.8 -18.7% 6,453.4 4.4%
Cash market 6,471.6 7,916.8 -18.3% 6,217.8 4.1%
Deri vati ves 266.7 371.0 -28.1% 235.6 13.2%
Opti ons market (stocks / i ndi ces) 189.5 281.3 -32.6% 155.1 22.1%
Forward market 77.3 89.7 -13.8% 80.5 -4.0%
Fixed income and other cash-market securities 1.3 0.8 63.4% 1.2 10.2%
TOTAL 6,739.7 8,288.6 -18.7% 6,454.6 4.4%
M A N A G E M E N T’S D I S C U S S I O N A N D A N A L I S Y S – 2Q14
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44.8% of the market’s overall value traded.
Ultimately, the 12.4% year-on-year fall in average daily number of trades for the quarter is reflective of the active trading level
on market, including by high-turnover investors (high frequency traders), which carry out a greater number of smaller-than-
average size trades.
Average Daily Number of Trades
(In thousands, unless otherwise indicated)
Source: BM&FBOVESPA
In a comparison of the quarterly distribution of value traded by investor group, foreign investors and local institutional investors
still topped the ranking, having accounted for 50.6% and 29.7% of the overall trading value for the Bovespa segment (versus
43.5% and 32.5% in 2Q13, respectively). However, every investor category cut back on value traded from the year-ago quarter,
with local institutional investors responding for a 25.7% year-on decline.
ADTV distribution by investor category
(In R$ billions)
Source: BM&FBOVESPA
The net foreign investments flowing into the stock market amounted to positive R$14.6 billion, where R$8.8 billion are
attributable to secondary market investments, with additional R$5.8 billion worth of investments directed to the OI S.A.
follow-on offering, which was the only equity offering implemented in the quarter to June 2014.
Net foreign investments flown into the equities markets
(In R$ billions)
Source: BM&FBOVESPA
Financial and Commodity Derivatives (BM&F Segment)
The average daily volume (ADV) traded in financial and commodity derivatives (BM&F segment) over the quarter to June 2014
hit 2.3 million contracts, plummeting 37.9% year-on-year due mainly to a 52.9% tumble in volumes for Brazilian-interest rate
contracts (1.2 million contracts), typically the top traded product for the segment. However, as is the case with the Bovespa
segment, the year-on-year comparison is somewhat biased given the market conditions prevailing one year ago, when average
daily volumes peaked to all-time highs. As compared on a quarter-on-quarter basis, trading volumes fell 19.9%.
Market 2Q14 2Q13
2Q14/2Q13
(%)
1Q14
2Q14/1Q14
(%)
Stocks and Equity Deriv. 860.2 982.5 -12.4% 886.2 -2.9%
Cash market 763.8 850.8 -10.2% 805.6 -5.2%
Deri vati ves 96.4 131.7 -26.8% 80.6 19.6%
Opti ons market (stocks / i ndi ces) 95.8 130.8 -26.7% 79.9 19.9%
Forward market 0.6 0.9 -33.7% 0.7 -14.3%
Fixed income and other cash-market securities 0.008 0.010 -18.6% 0.007 15.0%
TOTAL 860.2 982.5 -12.4% 886.2 -2.9%
M A N A G E M E N T’S D I S C U S S I O N A N D A N A L I S Y S – 2Q14
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Average daily volume (ADV)
(In thousands of contracts, unless otherwise indicated)
Source: BM&FBOVESPA
Brazilian-interest rate contracts accounted for 53.0% of the overall volume traded in financial and commodity derivatives
over the second quarter, as compared to 69.9% one year earlier. While volumes plunged in regard to both shorter and
longer term contracts, shorter term contracts have been hit more sharply, which can be explained by lessened volatility
and the market’s decreasing uncertainties about the direction and the Central Bank’s implementation of the monetary
policy over the coming months. In contrast, the positive highlight in the BM&F segment was the volume of trading in U.S.
dollar-denominated interest rate contracts, whose quarterly daily average shot up 27.6% from the second quarter one
year earlier.
Moreover, the volume tumble was partially canceled out by a 23.1% climb in quarterly average rate per contract (RPC),
when compared to the quarter to June 2013. Indeed, the average RPC climbed went up across contract groups due mainly
to (i) a 25.9% climb in average RPC for Brazilian-interest rate contracts, due to higher volume concentration in longer-term
contracts, as we typically charge higher-than-average fee rates for this contract group; (ii) a change in the mix of contracts
more actively traded, pushed by a retreat in volume of Brazilian-interest rate contracts traded (53.0% of the overall
volume for the segment versus 69.9% one year ago); and (iii) a 9.6% appreciation of the U.S. dollar against the Brazilian
real
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, as the fees we charge for certain contract groups (i.e., FX contracts, U.S. dollar-denominated interest rate contracts
and certain commodity-based contracts) are denominated in U.S. dollars.
Average rate per contract (RPC)
(In Brazilian reals)
Source: BM&FBOVESPA
An analysis of the distribution of overall volume traded by investor category shows every investor category cut back on
volume traded from the year-ago quarter, in particular local financial institutions (45.3% less) and institutional investors
(48.4% less), who accounted for 31.1% and 29.9% of the overall volume for the segment (versus 34.0% and 34.8% one year
ago, respectively). Foreign investors trimmed the year-ago volume back by 26.3%, a relatively lower cut than other
investor groups, such that their share of the overall volume traded climbed to 31. 6% placing them at the top of the
ranking for the quarter.
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As measured by the fluctuation in average selling rate between the two comparative quarters, based on the average PTAX selling rate (compiled by the
Central Bank) for the last business day of each of the months of March, April and May 2014 versus the average PTAX selling ra te for the last business day of
each of the months of March, April and May 2013, which served as the basis on which we calculated the RPC for 2Q14 and 2Q13, respectively.
Contracts 2Q14 2Q13
2Q14/2Q13
(%)
1Q14
2Q14/1Q14
(%)
Interest Rates i n BRL 1,200.0 2,549.7 -52.9% 1,734.7 -30.8%
FX Rates 472.7 533.6 -11.4% 524.3 -9.8%
Stock Indi ces 115.3 143.5 -19.7% 97.2 18.6%
Interest Rates i n USD 204.1 160.0 27.6% 196.7 3.8%
Commodi ti es 8.9 8.6 2.9% 10.9 -18.3%
Mi ni Contracts 255.1 237.1 7.6% 249.4 2.3%
OTC 8.6 15.8 -45.7% 13.5 -36.7%
TOTAL 2,264.5 3,648.3 -37.9% 2,826.6 -19.9%
Contracts 2Q14 2Q13
2Q14/2Q13
(%)
1Q14
2Q14/1Q14
(%)
Interest Rates i n BRL 1.188 0.944 25.9% 1.037 14.5%
FX Rates 2.600 2.422 7.3% 2.626 -1.0%
Stock Indi ces 1.861 1.748 6.5% 1.774 4.9%
Interest Rates i n USD 1.300 1.108 17.3% 1.426 -8.8%
Commodi ti es 2.572 2.497 3.0% 2.410 6.7%
Mi ni Contracts 0.120 0.118 1.9% 0.122 -1.2%
OTC 2.246 1.432 56.9% 1.107 103.0%
TOTAL 1.416 1.151 23.1% 1.309 8.2%
M A N A G E M E N T’S D I S C U S S I O N A N D A N A L I S Y S – 2Q14
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Distribution of Average Daily Volume by Investor Category
(As a percentage)
Source: BM&FBOVESPA
Treasury Direct platform (Tesouro Direto)
Tesouro Direto (Treasury Direct) is our platform for the trading of government bonds through the Internet, developed in
collaboration with the Brazilian Treasury. Trading on this platform has sustained the uptrend of previous quarters, with the
average financial value of government bonds and debt securities held in custody at our central securities depository (CSD)
having climbed 25.3% from the comparative quarter to R$12.1 billion due primarily to increased dealings from retail investors
seeking diversification. In addition, the average number of investors dealing in this platform ballooned to record 114.3 thousand
in a 22.7% surge from the second quarter one year earlier.
Dealings on the Treasury Direct platform
Source: BM&FBOVESPA
DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL PERFORMANCE
Revenues
Total revenues. Total revenues of R$516.4 million for the quarter to June 2014 declined 22.8% year-on-year due to a plunge in
revenues from trading and clearing fees explained primarily by a dive in the volume of dealings in each of our Bovespa and
BM&F segments, and a retreat in revenues unrelated to trading and clearing activities.
The volume-related revenues (from trading and clearing fees) derived within both our Bovespa and BM&F segments amounted
to aggregate R$408,1 million (a 25.3% tumble from the year-ago comparative quarter) and accounted for 79.0% of total
revenues for the quarter. However, this drop in revenues is due also to fewer trading sessions in the quarter to June 2014 than
in the prior-year second quarter (60 trading sessions in 2Q14 versus 63 in 2Q13).
Revenues from trading and clearing fees – Bovespa segment. At R$221.8 million, thus revenue line item fell 23.4% year-on-
year to account for 43.0% of total revenues primarily because of the market’s concerns about the domestic macroeconomic
landscape, as previously discussed under the heading “Operating Performance – Equities and Equity Derivatives (Bovespa
Segment)”. The volume-related revenues (trading and clearing fees earned on trade and post-trade transactions) hit R$214.3
million, giving back 22.8% year-on-year primarily due to (i) 18.7% plunge in ADTV; and (ii) comparatively fewer trading
M A N A G E M E N T’S D I S C U S S I O N A N D A N A L I S Y S – 2Q14
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sessions during the quarter. The average trade and post-trade fee was virtually unchanged from the year-ago quarter, having
tossed 0.02 bps to hit 5.299 bps in the quarter to June 2014.
Revenues from trading and clearing fees – BM&F segment. At R$193.8 million, this revenue line item went down 27.9% year-
on-year to account for 37.5% of total revenues due mainly to a 37.9% year-on-year tumble in trading volume coupled with
comparatively fewer trading sessions over the quarter, but counterbalanced by a 23.1% year-on climb in average RPC. This
tumble in quarterly volume traded correlates primarily with a 52.9% year-on-year fall in the volume of trades in Brazilian-
interest rate contracts, while the rise in average RPC is attributable to a change in the mix of contract groups more actively
traded and the increase in average RPC per contract group, as well as the effects of the appreciation of the U.S. dollar against
the Brazilian real, such as discussed previously under the heading “Operating Performance – Financial and Commodity
Derivatives (BM&F Segment)”.
Other revenues. The volume-unrelated revenues of R$100.8 million went down 8.8% from the year-ago second quarter and
accounted for 19.5% of the quarterly total revenues. The highlights for the period are discussed below.
Securities lending. Revenues of R$21.3 million from the operation of our securities lending facility accounted for 4.1% of
total revenues, having plunged 27.7% from the comparative second quarter due mainly to a 24.2% year-on drop in average
financial value of open interest positions.
Depositary, custody, back office services. Quarterly revenues of R$29.6 million accounted for 5.7% of total revenues,
increasing 2.1% from the earlier year second quarter due primarily to a rise in revenues from the operation of our Treasury
Direct platform and a sound performance in terms of revenues from registration services for transactions in agribusiness
credit bills (locally known as LCAs, or Letras de Crédito do Agronegócio).
Net revenues. The net revenue line hit R$464.8 million, a 22.5% fall from the year-ago second quarter.
Expenses
The expenses remained steady at R$178.2 million. Set forth below is a discussion of the principal changes in operating expense
line items.
Personnel and related charges. This expense line totaled R$86.5 million, keeping a flat line from the year-ago second
quarter. The effects of the annual wage increase (of approximately 7%) prescribed under our August 2013 collective
bargaining agreement was canceled out mainly as a result of:
(i) adjustments in headcount , in line with our continued cost-saving efforts;
(ii) a cutback in the amount accrued for profit sharing payments to employees resulting from expected cost-savings for the
year; and
(iii) increase in capitalized expenses with IT and other personnel involved in ongoing technology projects. The amount of
expenses capitalized over the quarter to June 2014 exceeded by R$2.6 million the expenses with personnel capitalized
expenses in the year-ago second quarter.
Data processing. This line item totaled R$27.7 million, up 7.1% from the prior year second quarter due mainly to adjustments
for inflation related to expenses with software and hardware maintenance and other services related to IT platforms rolled out
over the last 12 months (including the PUMA Trading System), as they are no longer capitalized such as we did during the
development and implementation of these technology resources.
Outsourced services. This line item totaled R$9.2 million, up 23.1% year-on-year primarily on account of consulting services
in connection with a number of strategic projects undertaken by us, in addition to certain expenses with external lawyers’
fees.
Communications. This expense line totaled R$2.9 million and was down 39.5% from the earlier-year second quarter due to
changes successfully implemented to streamline processes and cut mailing expenses for delivery of custody account
statements and execution confirmation slips to investors.
Equity in results of investees
Our net share of gain from the equity-method investment in CME Group shares totaled R$45.0 million, where R$16.3 million
have been provisioned as recoverable tax paid abroad.
Financial Result
Financial Result for the first quarter hit R$59.5 million, up 38.2% from the year-ago second quarter. Financial income went up
18.6% year-on-year to R$89.8 million influenced by a spike in average interest rates paid on our financial investments, whereas
financial expenses fell 7.2% to R$30.3 million.
M A N A G E M E N T’S D I S C U S S I O N A N D A N A L I S Y S – 2Q14
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Income tax and social contribution
The line item comprising income tax and social contribution plus deferred income tax and social contribution for the quarter totaled
R$140.9 million, where current income tax and social contribution amount to R$17.3 million and include R$1.0 million in taxes with
impact on cash flow, in addition to R$16.3 million in the line item ‘recoverable tax provision’ related to tax paid overseas in
connection with dividends earned on our equity investment in CME Group shares. Moreover, deferred income tax and social
contribution totaled R$123.7 million, comprised mainly of R$138.6 million in quarterly recognition of temporary differences from
the amortization of goodwill for tax purposes and R$15.0 million in reversal of deferred tax liabilities. Deferred income tax and
social contribution have no impact on cash flow.
Net income
The quarterly net income attributable to BM&FBOVESPA shareholders totaled R$250.1 million, down 28.7% from the year-ago
second quarter.
MAIN LINE ITEMS OF THE CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 2014
Main lines items under Assets
As determined in our audited consolidated balance sheet as of June 30, 2014, total assets of R$24,420.0 million were down 5.7%
from total assets at December 31, 2013. More notably, at R$2,800.3 million, current assets fell 35.2% from the close of the year
influenced mainly by a plunge in cash and cash equivalents, which tumbled to R$198.7 million from R$1,196.6 million at
December 31, 2013, reflecting a slump in the amount of cash collateral posted by market participants
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. In the aggregate, cash
and cash equivalents plus short- and long-term financial investments amounted to R$3,496.0 million and accounted for 14.3% of
total assets. Non-current assets amounted R$21,619.7 million, where long-term receivables amount to R$1,299.5 million
(including long-term financial investments of R$976.1 million), the investments amount to R$3,176.8 million, property and
equipment amount to R$428.8 million and intangible assets amount to R$16,714.6 million.
Intangible assets consist primarily of goodwill related to expectations of future profitability in connection with the acquisition of
Bovespa Holding. In 2Q14, we have reviewed internal and external factors and concluded that the factors considered as of
December 31 remain proper, so that no further measurements of carrying value are required.
Main lines items under Liabilities and Shareholders’ Equity
Current liabilities of R$1,674.8 million accounted for 6.9% of total liabilities and shareholders’ equity, a 38.2% fall from
December 31, 2013. This fall is due primarily to a slump in the amount of cash collateral posted by market participants, which
account for a large portion of current liabilities, which at the end of the quarter to June 30, 2014, had declined to R$1,069.2
million from R$2,073.0 million as 2013 came to a close. Noncurrent liabilities of R$4,092.0 million consist primarily of R$1,340.9
million worth of debt issued abroad plus deferred tax liabilities (income tax and social contribution) amounting to R$2,577.8
million.
Shareholders’ equity of R$18,653.2 million at June 30, 2014, went down 3.3% from end-2013 and consists mainly of capital stock
totaling R$2,540.2 million and capital reserves of R$15,208.2 million.
OTHER FINANCIAL INFORMATION
Capital Expenditures
We capitalized investments on the order of R$41.6 million in the quarter to June 2014, including R$37.6 million related to
investments in technology infrastructure and other IT resources (including construction of our new data center, which has now
been completed), in addition to R$4.0 million worth of investments in facilities and equipment (not including the new data
center). Over the course of the six-month period ended June 30, 2014, the capital expenditures amounted to aggregate R$106.0
million. Our capital expenditure budget sets an interval between R$230.0 million and R$260.0 million for investments in 2014,
while the capital expenditures for 2015 have been set at an interval between R$190.0 million and R$220.0 million.
Earnings distribution; Share buyback program
Interim dividends. On August 7, 2014, our board of directors declared interim dividends in the aggregate of R$200.1 million,
whose payment is set to be made on August 29, 2014, based on the book closure date of August 11, 2014, which will determine
the ownership structure pursuant to which holders of record will be entitled to earnings.
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Financial assets market participants post as collateral are recognized in the line item “Collateral for Transactions” under Current Liabilities.
M A N A G E M E N T’S D I S C U S S I O N A N D A N A L I S Y S – 2Q14
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Share buyback program. Our board of directors approved the share buyback program now ongoing on February 13, 2014. It is
set to end on December 31, 2014, and contemplates repurchasing up to 100 million shares. Under this buyback program, we
repurchased 19.5 million shares at average price of R$11.53 per share (totaling R$224.8 million) over the three-month period
ended June 30, 2014, while in July 2014 we repurchased 1.2 million additional shares at the average of R$11.73 per share
(totaling R$13.7 million). As of July 31, 2014, we had repurchased 30.2 million shares at average price of R$11.17 per share
(totaling R$337.7 million).
OTHER HIGHLIGHTS
Central counterparty risk; Risk management
Transactions carried out on markets we operate are secured with collateral market participants post with our clearing houses in
the form of cash, government bonds and certain corporate debt securities, bank letters of guarantee and stocks, among other
eligible collaterals. As of June 30, 2014, the aggregate of cash and financial assets received as collateral for transactions totaled
R$211.4 billion, up 4.6% from end-June 2013
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due primarily to a 19.2% rise in average financial value of collaterals posted with
the derivatives clearing house on account mainly of the increase in financial value of open positions in FX contracts and U.S.-
dollar denominated interest rate contracts.
Financial value of collateral pledged to our clearinghouses
(In R$ billions, unless otherwise indicated)
June 30, 2014 June 30,2013 Variation (%) December 31,2013 Variation (%)
Derivatives 132.6 111.2 19.2% 127.4 4.0%
Equities and corporate debt securities 74.4 85.2 -12.6% 80.3 -7.3%
Forex 3.7 4.8 -23.2% 5.9 -37.6%
Bonds 0.7 1.0 -24.6% 0.8 -2.8%
Total 211.4 202.2 4.6% 214.4 -1.4%
Source: BM&FBOVESPA
Where our business requires we perform the role of central counterparty clearing house, corporate and operational risk
exposures are monitored, assessed and managed under oversight from the Risk Committee, a standing advisory committee to
our Board of Directors whose primary responsibilities include taking a strategic structural approach to monitoring and assessing
exposures to market, liquidity and credit risks and, not least importantly, systemic risk in the markets we operate.
Sustainability; Social Investment
We released in June our GHG Emissions Inventory Report for base year 2013, which has been externally assured. According to
the report findings, our greenhouse gas emissions totaled 4,858.6 metric tons of carbon dioxide equivalents (CO2e). In addition,
in the context of their annual survey, we have responded to the Carbon Disclosure Project (CDP) questionnaire providing detailed
information about our greenhouse gas emission inventories and reduction targets.
Moreover, in the context of our Report or Explain Initiative, we have released a third annual update of selected data collected
from statements of listed issuers in their Reference Forms and compiled in a report under the title “Listed Issuers: Sustainability
Report or Integrated Report”. According to the report findings, this year 71.17% of the issuers listed on our stock exchange have
either reported sustainability-related, non-financial information or explained why not, which evidences companies are mindful
of the market’s urgings regarding sustainability reporting.
Update on strategic initiatives
Integrated Clearing Facility. We have set August 18, 2014, as the date by which we are going to implement the derivatives
module of our new integrated clearing facility (Clearing BM&FBOVESPA), which was approved by the Central Bank on August 7,
2014. This comes in the aftermath of eleven parallel running cycles carried out by our Exchange in conjunction with market
participants as part of the system changeover. This means running the Clearing BM&FBOVESPA and the existing systems side by
side while we all input the same data and perform the same processes, compare their output and assess the reliability of the
new system. Following the implementation of the derivatives module of our new clearing system, we plan to release the
schedules for development, testing and implementation of the equities module, fixed income securities module and forex
module, which will require specific approvals from the Central Bank.
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Money we receive from market participants as cash collateral for their and their customers’ dealings is duly accounted for and recognized in our accounting
records and in our balance sheet (under “current liabilities” with contra asset account in the line item “cash and cash equivalents” under current assets). Other
financial assets posted as collateral for transactions are segregated from our assets and recorded in off-balance sheet memorandum accounts (see Note 17 to
our financial statements, under the heading “Structure of Guarantees – Collaterals deposited by market participants”).
M A N A G E M E N T’S D I S C U S S I O N A N D A N A L I S Y S – 2Q14
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PUMA Trading System. Moving forward with the development of our trading environment, in particular the PUMA Trading System,
a number of important projects have been delivered. In May we had started the launching process of our new trading workstation
“Estação ePUMA” (“ePUMA Station”) that will replace the old MegaBolsa Station. In June, new functionality was added to the
Bovespa segment platform featuring rejection and auction “tunnels” for orders based on the average weighted price of the
security, triggering an auction if the Exchange’s limit parameters are breached by a group of orders, so as to prevent big, sudden
price moves that could be caused by automated strategies. Also in July, the trading of corporate debt securities moved from the
old BovespaFix and SomaFix systems to the PUMA Trading System.
Incentives for Small and Medium Enterprises (“SMEs”). In July, in an effort to encourage SMEs to seek equity financing the
Brazilian government issued Provisional Measure No. 651 (“PM 651”). The Provisional Measure creates a tax exemption on
capital gains ascertained by investors owning equity in SMEs that meet the following requirements (i) are listed on either the
Bovespa Mais or Novo Mercado segments of BM&FBOVESPA; (ii) have market capitalization of no more than R$700 million, and
(iii) earn no more than R$500 million in annual revenues. The tax exemption, which is set to be in place through 2023, covers
investments made either at the time of the initial public offering or, thereafter, through secondary market purchases. Also,
listed SMEs are afforded special treatment which entails certain cost savings in fulfilling offering, disclosure and reporting
requirements. In addition, the government, the regulators, certain market entities and we are joining efforts towards developing
entrepreneurial qualification and small business management programs.
Launch of the first Brazilian-listed foreign exchange-traded index fund (Foreign ETF). April 29 marked the first day of trading for
the first Brazilian-listed foreign exchange-traded index fund, the iShares S&P 500 FIC FI Investimento no Exterior, managed by
BlackRock. The new ETF mostly holds shares of BlackRock’s iShares Core S&P500 ETF and tracks the U.S. benchmark Standard &
Poor’s 500 Index.
BDR Programs. We are on course to expand our Level I Unsponsored BDR program, for which we plan to accept bids from
seasoned depositary institutions and award new licenses in an upcoming competitive process.
INDEPENDENT AUDITORS
Our Company and subsidiaries have retained the audit firm of Ernst & Young Auditores Independentes S.S. to audit the financial
statements.
The policy that governs the engagement of external audit services by us and our subsidiaries is based on generally accepted
auditing standards which preserve service independence and include the following practices: (i) the auditors must not hold
executive or management positions in our Company or subsidiaries; (ii) the auditors must abstain from performing for our
Company and subsidiaries operating activities which could compromise the effectiveness of their audit function; and (iii) in
expressing their opinion regarding financial statements and reports, the auditors must maintain objectivity, and avoid conflict of
interest and loss of independence.
In the three-month period ended June 30, 2014, neither the independent auditors nor any of their related parties provided non-
audit services superior to 5% of their annual fees related to external audit services .
Quarterly Information (ITR)
BM&FBOVESPA S.A. - Bolsa de Valores,
Mercadorias e Futuros
June 30, 2014
Condomínio São Luiz
Av. Presidente Juscelino Kubitschek, 1830
Torre I - 8º Andar - Itaim Bibi
04543-900 - São Paulo - SP - Brasil
Tel: (5511) 2573-3000
ey.com.br
Uma empresa-membro da Ernst & Young Global Limited
1
A free translation from Portuguese into English of Independent Auditors’ Review Report on Quarterly Information
prepared in accordance with accounting practices adopted in Brazil applicable to the preparation of Quarterly
Financial Information (ITR) and in Reais (R$), and presented according to standards issued by the Brazilian
Securities and Exchange Commission (CVM).
Independent auditors’ report on quarterly information
The Shareholders, Board of Directors and Officers
BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros
We have reviewed the accompanying individual and consolidated interim financial information of
BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros (“Company”), included in the
Quarterly Information Form (ITR) for the quarter ended June 30, 2014, which comprise the balance
sheet as at June 30, 2014 and the related statements of income and comprehensive income for the
three- and six-month periods then ended, and the statements of changes in equity and cash flows for
the six-month period then ended, including a summary of significant accounting practices and other
explanatory information.
Management is responsible for the preparation of the individual interim financial information in
accordance with Accounting Pronouncement CPC 21 - Interim Financial Reporting, and of the
consolidated interim financial information in accordance with CPC 21 and IAS 34 - Interim Financial
Reporting, issued by the International Accounting Standards Board (IASB), as well as for the fair
presentation of this information in conformity with standards issued by the Brazilian Securities and
Exchange Commission (CVM) applicable to the preparation of Quarterly Information (ITR). Our
responsibility is to express a conclusion on this interim financial information based on our review.
Scope of the review
We conducted our review in accordance with Brazilian and International Standards on Review
Engagements (NBC TR 2410 and ISRE 2410 - Review of Interim Financial Information Performed by
the Independent Auditor of the Entity). A review of interim financial information consists of making
inquiries, primarily of persons responsible for 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 International Standards on Auditing 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.
2
Conclusion on the individual interim financial information
Based on our review, nothing has come to our attention that causes us to believe that the
accompanying individual interim financial information included in the quarterly information referred to
above was not prepared, in all material respects, in accordance with CPC 21 applicable to the
preparation of Quarterly Information (ITR), and presented consistently with the rules issued by the
Brazilian Securities and Exchange Commission (CVM).
Conclusion on the consolidated interim financial information
Based on our review, nothing has come to our attention that causes us to believe that the
accompanying consolidated interim financial information included in the quarterly information referred
to above is not prepared, in all material respects, in accordance with CPC 21 and IAS 34 applicable to
the preparation of Quarterly Financial Information (ITR), and presented consistently with the rules
issued by the Brazilian Securities and Exchange Commission (CVM).
Other matters
Statements of value added
We have also reviewed the individual and consolidated interim Statements of Value Added (SVA) for
the six-month period ended June 30, 2014, prepared under the responsibility of Company
management, the presentation of which in the interim financial information is required by the rules
issued by the Brazilian Securities and Exchange Commission (CVM) applicable to preparation of
Quarterly Financial Information (ITR), and as supplementary information under IFRS, whereby no
Statement of Value Added presentation is required. These statements have been subject to the same
review procedures previously described and, based on our review, nothing has come to our attention
that causes us to believe that they were not prepared, in all material respects, consistently with the
overall individual and consolidated interim financial information.
São Paulo, August 7, 2014.
ERNST & YOUNG
Auditores Independentes S.S.
CRC-2SP015199/O-6
3
A free translation from Portuguese into English of Quarterly Information prepared in accordance with accounting practices
adopted in Brazil applicable to the preparation of Quarterly Financial Information (ITR) and in Reais (R$), and presented according
to standards issued by the Brazilian Securities and Exchange Commission.
BM&FBOVESPA S.A. - Bolsa de Valores, Mercadorias e Futuros
Balance sheets
June 30, 2014 and December 31, 2013
(In thousands of reais)
BM&FBOVESPA Consolidated
Note 06/30/2014 12/31/2013 06/30/2014 12/31/2013
Assets
Current assets
2,699,224 4,245,974 2,800,326 4,319,483
Cash and cash equivalents 4 (a) 187,521 1,191,676 198,698 1,196,589
181,333 197,089 200,769 213,126
2 – Goods and services acquired from third parties
114,217 107,863 116,596 110,107
Expenses (a)
114,217 107,863 116,596 110,107
3 - Gross value added (1-2)
928,882 1,125,485 945,933 1,139,278
4 - Retentions
56,733 55,038 57,597 55,906
Depreciation and amortization
8 56,733 55,038 57,597 55,906
5 – Net value added produced by the Company (3-4)
872,149 1,070,447 888,336 1,083,372
6 – Value added transferred from others
267,952 227,954 264,476 225,725
Equity pickup in subsidiaries and associate
7 100,781 92,128 95,208 88,516
Financial income
22 167,171 135,826 169,268 137,209
7 - Total value added to be distributed (5+6)
1,140,101 1,298,401 1,152,812 1,309,097
8 – Distribution of value added
1,140,101 1,298,401 1,152,812 1,309,097
Personnel and related charges
164,784 161,674 172,435 168,534
Board and committee members’ compensation
4,292 3,733 4,292 3,742
Taxes, fees and contributions (b)
Federal
390,081 443,503 393,666 446.108
Municipal
13,926 15,410 14,276 15.761
Financial expenses
22 60,799 56,271 61,705 56,993
Interest on equity and dividends
204,914 213,580 204,914 213,580
Retained net income for the period
301,305 404,230 301,524 404,379
(a) Expenses (excludes personnel, board and committee member fees, depreciation and taxes).
(b) Includes: Taxes, PIS and COFINS, taxes on services, current and deferred income tax and social contribution.
The accompanying notes are an integral part of the quarterly information.
13
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
1 Operations
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros (BM&FBOVESPA) is a publicly-traded
corporation headquartered in the city of São Paulo.
BM&FBOVESPA organizes, develops and provides for the operation of free and open securities markets, for
spot and future settlement. Its activities are carried out through its trading systems and clearinghouses, and
include transactions with securities, interbank foreign exchange and securities under custody in the Special
System for Settlement and Custody (SELIC).
2 Preparation and presentation of quarterly information
This quarterly information was approved by the Company’s Board of Directors on August 7, 2014.
The quarterly information has been prepared and is being presented in accordance with accounting practices
adopted in Brazil. Additionally, the quarterly information contains the minimum disclosure requirements
prescribed by CPC 21(R1) “Interim Financial Statements”, as well as other information considered relevant. This
information does not include all requirements for annual financial statements and, therefore, it should be read in
conjunction with the individual and consolidated financial statements prepared in accordance with International
Financial Reporting Standards (IFRS) and the accounting practices adopted in Brazil, issued by the Brazilian
Accounting Pronouncements Committee (CPC), and approved by the Brazilian Securities and Exchange
Commission (CVM), for the year ended December 31, 2013. Accordingly, this quarterly information at June 30,
2014 is not subject to full reporting, by reason of redundancy in relation to information already presented in the
annual financial statements, and as provided for in the CVM/SNC/SEP Circular Letter No. 003/2011.
The preparation of the quarterly information requires the use of certain critical accounting estimates and also
requires that the Company’s management exercise its judgment in the adoption process of accounting practices.
No changes have been recorded in assumptions and judgments by the Company management in using such
estimates to prepare this quarterly information, in relation to those applied in the financial statements at
December 31, 2013, as disclosed on February 13, 2014.
14
(a) Consolidated quarterly information
The consolidated quarterly information includes the balances of BM&FBOVESPA and its subsidiaries, as well
as special purpose entities comprising investment funds, as follows:
Ownership %
Subsidiaries and controlled entities
Banco BM&FBOVESPA de Serviços de Liquidação e Custódia S.A. (“Banco BM&FBOVESPA”) 100.00
Bolsa Brasileira de Mercadorias 53.56
Bolsa de Valores do Rio de Janeiro – BVRJ (“BVRJ”) 86.95
BM&F (USA) Inc. 100.00
BM&FBOVESPA (UK) Ltd. 100.00
Exclusive investment funds:
Bradesco Fundo de Investimento Renda Fixa Letters
BB Pau Brasil Fundo de Investimento Renda Fixa
HSBC Fundo de Investimento Renda Fixa Longo Prazo Eucalipto
(b) I ndividual quarterly information
In the individual quarterly information (BM&FBOVESPA), subsidiaries are recorded using the equity method.
The same adjustments are made both to the individual and consolidated quarterly information to achieve the
same profit or loss and net assets attributable to the owners of the parent company.
3 Significant accounting practices
The accounting practices and methods of calculation used in the preparation of this quarterly information are the same
adopted in preparing the financial statements for the year ended December 31, 2013, except for the item below:
d. Financial instruments
(iv) Cash flow hedge – Firm commitment
Any gain or loss in the hedge instrument related to the effective hedge portion is recognized under equity, in
“Other comprehensive income”, net of tax effects. Consequently, the exchange variation in cash and cash
equivalents in foreign currency, previously recognized in financial result prior to its recognition as a hedge
instrument, accumulates in equity and is transferred to income/loss for the same period and the same account
group under which the hedged transaction is recognized. When the hedged transaction implies recognition of a
non-financial asset, gains and losses recognized in equity are transferred and included in the initial measurement
of the asset cost. The non-effective portion of the hedge is immediately recognized in the income statement.
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
15
4 Cash and cash equivalents and financial investments
a. Cash and cash equivalents
BM&FBOVESPA
Description 06/30/2014 12/31/2013
Cash and bank deposits in local currency 136 267
Bank deposits in foreign currency 110,297 36,507
Cash and cash equivalents 110,433 36,774
Bank deposits in foreign
currency – Third-party funds (1) 77,088 1,154,902
Total cash and cash equivalents 187,521 1,191,676
Consolidated
Description 06/30/2014 12/31/2013
Cash and bank deposits in local currency 273 417
Bank deposits in foreign currency 121,337 41,270
Cash and cash equivalents 121,610 41,687
Bank deposits in foreign
currency – Third-party funds (1) 77,088 1,154,902
Total cash and cash equivalents 198,698 1,196,589
(1) Third-party funds restricted to full settlement of the exchange transaction (Exchange clearing).
Cash and cash equivalents are held with top-tier financial institutions in Brazil or abroad. Deposits in foreign
currency are primarily in US dollars.
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
16
b. Financial investments
The breakdown of financial investments by category, nature and maturity is as follows
BM&FBOVESPA
Without
maturity
More than More than
More than
5 years 06/30/2014 12/31/2013 Description
Up to 3
months
3 months and
up to 12
months
12 months
and up to
5 years
Financial assets measured at fair value through profit or loss
Total financial investments 2,033,489 170,137 54,938 544,809 101,269 2,904,642 3,222,117
Short-term
2,258,564 2,784,750
Long-term
646,078 437,367
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
17
CONSOLIDATED
Without
maturity
More than More than
More than
5 years 06/30/2014 12/31/2013 Description
Up to 3
months
3 months
and up to 12
months
12 months
and up to 5
years
Financial assets measured at fair value through profit or loss
(1) Refers to investments in financial investment funds, whose portfolios mainly comprise investments in government
securities and repurchase agreements that have the CDI (Interbank Deposit Certificate rate) as their profitability
benchmark. The consolidated balances of investment funds are presented according to the nature and maturity of
the portfolio in proportion of the net assets invested.
The net assets of the main investment funds included in the consolidation of the quarterly information are: (i)
Bradesco FI Renda Fixa Letters – R$1,325,597 (R$1,529,024 at December 31, 2013); (ii) BB Pau Brasil FI Renda
Fixa – R$331,874 (R$340,641 at December 31, 2013); (iii) HSBC FI Renda Fixa Longo Prazo Eucalipto –
R$214,964 (R$254,933 at December 31, 2013).
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
18
(2) Issued by top-tier banks and backed by government securities.
(3) Refers mainly to investments in gold.
(4) The primary non-exclusive investment funds are: (i) Bradesco Empresas FICFI Referenciado DI Federal, of
R$23,922 (R$62,432 at December 31, 2013); (ii) Araucária Renda Fixa FI – R$34,680 (R$101,031 at December
31, 2013); (iii) Santander Fundo de Investimento Cedro Renda Fixa – R$51,681; and FI Jacarandá Renda Fixa –
R$59,722 at December 31, 2013.
The government securities are held in the custody of the Special System for Settlement and Custody (SELIC),
the investment fund shares are held in the custody of their respective administrators and the shares are in the
custody of BM&FBOVESPA’s Equity and Corporate Debt Clearinghouse.
There was no reclassification of financial instruments between categories in the quarter.
Derivative financial instruments
Derivative financial instruments comprise future interest rate contracts (DI1) stated at their market values. These
contracts are included in the exclusive fund portfolios which were consolidated (Note 2(a)) and are used to cover
fixed interest rate exposures, swapping fixed interest rate for floating interest rate (CDI). Even though these
derivatives are designated for hedge, management has opted not to apply hedge accounting in respect to them.
The net result between the derivative transactions and the related financial instrument refers to the short position in
future interest rate contracts, with market value of R$6,905 (R$16,528 at December 31, 2013).
DI1 contracts have the same maturity dates as the fixed interest rate contracts to which they relate.
Financial risk management policy
BM&FBOVESPA’s policy for cash investments favors alternatives with very low risk, highly liquid and with
sovereign risk, whose overall performance is tied to the SELIC / CDI rate, resulting in a significant proportion of
government securities in its portfolio, purchased directly, via repurchase agreements backed by government
securities and also through exclusive and non-exclusive funds.
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
19
Sensitivity analysis
The table below presents the net exposure of all financial instruments (assets and liabilities) by market risk factors,
classified in accordance with their rates:
This risk arises from the possibility that fluctuations in future interest rates for the corresponding maturities could
affect the fair value of BM&FBOVESPA’s transactions.
Floating-rate position
As a financial investment policy and considering the need for immediate liquidity with the least possible impact from
interest rate fluctuations, BM&FBOVESPA maintains its financial assets and liabilities indexed to floating interest
rates.
We present in the table below the possible impacts on profit or loss of a change of 25% and 50% from the probable
scenario for the CDI/SELIC rate, for the next three months:
Index rates CDI/Selic 5.31% 7.96% 10.62% 13.27% 15.93%
Fixed-rate position
Part of BM&FBOVESPA’s financial investments bears fixed interest rates, resulting in a net exposure to such rates.
However, in terms of percentage, in view of the amounts involved, the effects on the portfolio are not considered
material.
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
20
Currency risk
This risk arises from the possibility of fluctuations in exchange rates in connection with the acquisition of inputs,
product sales and asset and liability financial instruments could have an impact on the related amounts in local
currency.
In addition to the amounts payable and receivable in foreign currencies, including interest payments on the
senior unsecured notes in the next six-month period, BM&FBOVESPA has third-party deposits in foreign
currency to guarantee the settlement of transactions by foreign investors and also own funds in foreign currency
abroad. At June 30, 2014, the net foreign currency exposure amounted to R$30,039 (negative R$64,049 at
December 31, 2013). In view of the amounts involved, the effects on the portfolio are not considered material.
Liquidity risk
The following table shows the main financial liabilities of BM&FBOVESPA by maturity, represented by non-
derivative financial liabilities, on an undiscounted cash flows basis:
No maturity
Within 1
year
From 1 to 2
years
From 2 to
5 years
Above 5
years
Collateral for transactions 1,069,246
Debt issued abroad (1) 75,166 75,372 225,497 1,463,665
(1) Amounts converted by PTAX sale closing rate.
Credit risk and capital management
BM&FBOVESPA prefers very low risk investments, where more than 99% of the allocation of assets is linked
to government securities with ratings set by Standard & Poor's and Moody's of "BBB+" and "Baa2",
respectively, for long-term issues in local currency and characterized as investment grade, in order to obtain high
liquidity and sovereign risk, with overall performance linked to the CDI/SELIC rate.
The issue of Senior Notes (Note 12) was linked to increasing our equity interest in CME and the creation of a
strategic partnership between the companies. In addition, it serves as a natural hedge for the USD exposure
generated by the increased investment in CME Group.
Cash flow hedge
As from April 2014, BM&FBOVESPA has allocated part of its cash in foreign currency to cover foreign
exchange impacts of certain firm commitments in foreign currency (cash flow hedge), in accordance with IAS
39/CPC 38. The Cash flows, the hedged items, are expected to realize throughout 2014, regardless of the terms
of the agreements exceed that date.
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
21
At June 30, 2014, cash flow in foreign currency designated to hedge such commitments amounts to R$ 50,218
and the amount recorded under equity is R$ 16, net of tax effects. In that period, an amount totaling R$ 27,
referring to payment cash flows hedged as from April 2014, was transferred from “Other comprehensive
income” to income or loss.
5 Accounts receivable
The breakdown of accounts receivable is as follows:
BM&FBOVESPA
Description 06/30/2014 12/31/2013
Fees 12,910 10,972
Annual fees 5,662 5,485
Vendors – Signal broadcasting 10,647 11,620
Trustee and custodial fees 24,353 23,592
Other accounts receivable 6,717 8,704
Subtotal 60,289 60,373
Allowance for doubtful accounts (7,423) (7,677)
Total 52,866 52,696
Consolidated
Description 06/30/2014 12/31/2013
Fees 13,741 12,287
Annual fees 5,662 5,485
Vendors – Signal broadcasting 10,647 11,620
Trustee and custodial fees 24,353 23,592
Other accounts receivable 7,537 9,172
Subtotal 61,940 62,156
Allowance for doubtful accounts (7,780) (7,929)
Total 54,160 54,227
The amounts presented above are primarily denominated in Brazilian reais and approximately 90% falls due within 90
days. At June 30, 2014, the amounts overdue above 90 days totaled R$7,612 (R$7,682 at December 31, 2013).
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
22
Changes in provision for losses:
BM&FBOVESPA Consolidated
Balances at December 31, 2013 7,677 7,929
Additions 846 989
Reversals (866) (904)
Write-offs (234) (234)
Balance at June 30, 2014 7,423 7,780
6 Other receivables
Other receivables comprise the following:
BM&FBOVESPA
06/30/2014 12/31/2013
Current
Dividends receivable - CME Group (Note 16) - 71,878
Receivables - Related parties (Note 16) 1,085 3,307
Properties held for sale 3,812 3,812
Advances to employees 9,434 1,814
Other 3,890 78
Total 18,221 80,889
Consolidated
06/30/2014 12/31/2013
Current
Dividends receivable - CME Group (Note 16) - 71,878
Receivables - Related parties (Note 16) 279 285
Properties held for sale 3,812 3,812
Advances to employees 9,515 1,841
FX transactions (Banco BM&FBOVESPA) 24,651 -
Other 5,585 1,456
Total 43,842 79,272
Non-current
Brokers in court-ordered liquidation (1) 2,200 2,200
Total 2,200 2,200
(1) Balance of accounts receivable from brokers in court-ordered liquidation, which considers the guarantee
represented by the equity certificates pledged by the debtor.
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
23
7 Investments
a. I nvestments in subsidiaries and associates
Investments in subsidiaries and associates comprise the following:
Equity pickup
Accumulated
2014
Equity pickup
Accumulated
2013 Companies Equity
Total
number of
shares
Adjusted
P&L
Ownership
%
Investment
06/30/2014
Investment
12/31/2013
Subsidiaries
Banco BM&FBOVESPA de Liquidação e
Custódia S.A. 62,302 24,000 3,272 100 62,302 59,028 3,272 2,208
Bolsa Brasileira de Mercadorias 13,966 403 (396) 53,56 7,480 7,692 (212) (291)
Bolsa de Valores do Rio de Janeiro -
BVRJ 63,699 115 3,025 86,95 55,386 52,756 2,630 1,736
BM&F (USA) Inc. 976 1,000 (149) 100 976 1,189 (149) (158)
BM&FBOVESPA (UK) Ltd. 1,357 1,000 32 100 1,357 1,353 32 117
Summary of key financial information of subsidiaries and associates at June 30, 2014:
Description
Banco
BM&FBOVESPA
Bolsa Brasileira
de Mercadorias
Bolsa de Valores do
Rio de Janeiro -
BVRJ
BM&F (USA)
Inc.
BM&FBOVESPA
(UK) Ltd.
CME Group,
Inc.
Assets 383,556 15,457 69,841 1,055 1,716 113,673,888
Liabilities 321,254 1,492 6,142 80 359 66,396,345
Revenue 12,666 2,630 4,749 417 611 3,323,573
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
24
Changes in investments:
Subsidiaries Associate
Investments
Banco
BM&FBOVESPA
Bolsa
Brasileira de
Mercadorias
Bolsa de Valores
do Rio de
Janeiro - BVRJ
BM&F
(USA) Inc.
BM&FBOV
ESPA (UK)
Ltd.
CME
Group, Inc. Total
Balances at December 31, 2013 59,028 7,692 52,756 1,189 1,353 3,312,606 3,434,624
Equity pickup 3,272 (212) 2,630 (149) 32 60,708 66,281
Exchange variation (3) - - - (64) (28) (199,744) (199,836)
Comprehensive income of
associate/subsidiary 2 - - - - 6,444 6,446
Dividends received - - - - - (36,140) (36,140)
Balances at June 30, 2014 62,302 7,480 55,386 976 1,357 3,143,874 3,271,375
(1) In July 2010, with the acquisition of a 3.2% interest in CME Group for the amount of R$1,075,119, increasing the
ownership interest from 1.8% to 5%, BM&FBOVESPA began to recognize the investment using the equity method
in accordance with CPC 18/IAS 28, because management understands that the qualitative aspects of the
relationship between the two companies indicate the existence of significant influence of BM&FBOVESPA over
CME Group.
At June 30, 2014, the investment’s fair value based on share market quotation was R$2,653,064. Considering that
the market value of the investment in the CME Group is lower than the book value, BM&FBOVESPA
management conducted the impairment test at the base date November 30, 2013. The result did not indicate the
need to recognize loss on investment in the CME Group. In the second quarter of 2014, management reviewed the
internal and external indicators and concluded that assumptions and sensitivity analyses considered in the previous
valuation remain adequate, not indicating the need for recognition of impairment.
(2) Refers to recoverable tax paid by the foreign associate, according to Law No. 9249/95 and Revenue Procedure No.
213/02 of the Brazilian Internal Revenue Service (RFB)
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
25
(3) In July 2010, BM&FBOVESPA issued debt abroad to protect part of the foreign exchange risk on the investment
in CME Group (hedge of net investment) through the designation of a non-derivative financial instrument (debt
issuance abroad) as a hedge, as presented in Note 12. We present below the sensitivity analysis to exchange rate
variations for the non-hedged portion of the investment in CME Group:
Impact on equity
Decrease in exchange rate Increase in exchange rate
-50% -25% 25% 50%
Exchange rate 1.1013 1.6519 2.7531 3.3038
Exchange variation on investment in foreign associate (1,571,937) (785,968) 785,968 1,571,937
Exchange variation on hedge of net foreign investment 673,965 336,983 (336,983) (673,965)
Tax effect on exchange variation on hedge of net
foreign investment (229,148) (114,574) 114,574 229,148
Net effect (1,127,120) (563,559) 563,559 1,127,120
b. I nvestment properties
This category comprises properties owned by subsidiary BVRJ - Bolsa de Valores do Rio de Janeiro of rent,
which are carried at cost and depreciated at the rate of 4% per year.
Consolidated
Balance at December 31, 2013 33,671
Depreciation (759)
Balance at June 30, 2014 32,912
Rental income from these properties for the quarter ended June 30, 2014 was R$4,735 (R$3,832 at June 30,
2013).
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
26
8 Property and equipment (P&E)
BM&FBOVESPA
Changes Buildings
Furniture
and
fixtures
Computer
devices and
equipment Facilities Other
Construction
in progress Total
Balances at December 31, 2013 113,501 16,756 68,740 49,981 29,955 139,921 418,854
Additions 392 1,380 2,832 1,191 728 27,306 33,829
Write-offs - (116) (8) - (506) - (630)
Transfer (Note 9) - - - - - 344 344
Reallocations(1) 130,032 - - - - (130,032) -
Depreciation (1,018) (1,760) (19,663) (3,653) (1,671) - (27,765)
Balances at June 30, 2014 242,907 16,260 51,901 47,519 28,506 37,539 424,632
At June 30, 2014
Cost 345,106 49,308 336,720 82,175 78,195 37,539 929,043
Accumulated depreciation (102,199) (33,048) (284,819) (34,656) (49,689) - (504,411)
Net book balance 242,907 16,260 51,901 47,519 28,506 37,539 424,632
Consolidated
Changes Buildings
Furniture
and
fixtures
Computer
devices and
equipment Facilities Other
Construction
in progress Total
Balances at December 31, 2013 114,849 16,779 68,810 50,272 32,519 139,921 423,150
Additions 392 1,391 2,836 1,196 729 27,306 33,850
Write-offs - (116) (8) - (549) - (673)
Transfer (Note 9) - - - - - 344 344
Reallocations (1) 130,032 - - - - (130,032) -
Depreciation (1,062) (1,763) (19,681) (3,688) (1,676) - (27,870)
Balances at June 30, 2014 244,211 16,291 51,957 47,780 31,023 37,539 428,801
At June 30, 2014
Cost 347,442 49,814 337,745 83,220 80,825 37,539 936,585
Accumulated depreciation (103,231) (33,523) (285,788) (35,440) (49,802) - (507,784)
Net book balance 244,211 16,291 51,957 47,780 31,023 37,539 428,801
(1) Refers to the transfer due to the completion of the construction of new data center in the second quarter.
In the quarter, BM&FBOVESPA absorbed as part of the project development cost the amount of R$966 related
to the depreciation of equipment used in developing these projects.
Properties with a carrying amount of R$38,113 were pledged as collateral in lawsuits. BM&FBOVESPA is not
allowed to assign these assets as collateral for other lawsuits or sell them.
Property and equipment are depreciated over their estimated useful lives. Annual rates of depreciation of
property and equipment items at June 30, 2014 are the same presented at December 31, 2013.
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
27
9 Intangible assets
Goodwill
The goodwill of R$16,064,309 is attributed to expected future profitability, supported by an economic and
financial valuation report of the investment. According to the guidelines of CPC 01/IAS 36, the goodwill must
be tested annually for impairment, or more frequently when there are indicators that impairment may have
occurred. Goodwill is stated at cost less accumulated impairment losses. Impairment losses recognized on
goodwill are not reversed.
The testing supported by the valuation report issued by experts did not indicate the need for adjustments to the
value of goodwill at December 31, 2013. In the second quarter of 2014, management reviewed the internal and
external indicators and concluded that the assumptions adopted in the previous test remain adequate and then
new calculations for the quarter are not required.
Software programs and projects
BM&FBOVESPA and Consolidated
Changes
Cost of software
development
internally generated
Software internally
generated – projects
completed Software Total
Balances at December 31, 2013 274,154 272,455 61,407 608,016
Additions 60,605 - 16,785 77,390
Write-offs - - - -
Transfer (Note 8) (344) - - (344)
Reallocations (3,008) 3,008 - -
Amortization - (22,194) (12,596) (34,790)
Balances at June 30, 2014 331,407 253,269 65,596 650,272
At June 30, 2014
Cost 331,407 322,350 314,549 968,306
Accumulated amortization - (69,081) (248,953) (318,034)
Net book balance 331,407 253,269 65,596 650,272
The balance comprises costs for the acquisition of licenses and development of software programs and systems,
with amortization rates from 10% to 33% per year, and expenditures for the implementation and development in
progress of new systems and software programs.
In the quarter, BM&FBOVESPA absorbed as part of the project development cost the amount of R$4,856
related to the amortization of software programs used in developing these projects.
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
28
10 Earnings and rights on securities in custody
These comprise dividends and interest on equity received from listed companies, which will be transferred to the
custody agents and by them to their clients, who are the owners of the listed companies’ shares.
11 Provision for taxes payable
BM&FBOVESPA
Description 06/30/2014 12/31/2013
Taxes withheld at source 5,162 8,036
PIS and COFINS payable 13,486 14,732
ISS payable 2,015 1,987
Total 20,663 24,755
Consolidated
Description 06/30/2014 12/31/2013
Taxes withheld at source 5,698 9,139
PIS and COFINS payable 13,641 14,845
ISS payable 2,026 1,995
Total 21,365 25,979
12 Debt issued abroad
The debt composition is unchanged in relation to the one disclosed in the financial statements at December 31,
2013.
At June 30, 2014, it amounts to R$1,380,785 (R$1,468,322 at December 31, 2013), including the amount of
R$39,912 (R$42,129 at December 31, 2013) referring to interest incurred until the reporting date.
The fair value of the debt, calculated using market data, is R$1,473,517 at June 30, 2014 (R$1,528,652 at
December 31, 2013) (Source: Bloomberg).
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
29
13 Other liabilities
BM&FBOVESPA
06/30/2014 12/31/2013
Current
Prepaid income – Annuities 16,166 -
Payables to related parties (Note 16) 15,371 18,208
Purchase of treasury shares payable 4,681 7,672
Custody agents 5,471 5,939
Amounts to be transferred - Direct Treasury 4,739 3,390
Advance received from sale of property 8,192 8,192
Preferred shares payable 1,838 1,838
Third-party services 862 862
Other 8,020 7,301
Total 65,340 53,402
Non-current
Payables to related parties (Note 16) 47,406 50,422
Total 47,406 50,422
Consolidated
Description 06/30/2014 12/31/2013
Prepaid income – Annuities 16,166 -
Payables to related parties (Note 16) 15,196 17,827
Purchase of treasury shares payable 4,681 7,672
Custody agents 5,471 5,939
Amounts to be transferred - Direct Treasury 4,739 3,390
Advance received from sale of property 8,192 8,192
Third-party services 1,198 1,296
Preferred shares payable 1,838 1,838
Demand deposits (1) 75,234 111,067
Repurchase agreements (2) 208,836 227,309
FX transactions (Banco BM&FBOVESPA) 34,354 3,837
Other 8,770 8,211
Total 384,675 396,578
Non-current
Payables to related parties (Note 16) 47,406 50,422
Total 47,406 50,422
(1) Refer to demand deposits held by corporations at Banco BM&FBOVESPA with the sole purpose of settlement of
clearing operations held within BM&FBOVESPA and the Special System for Settlement and Custody (SELIC)
pursuant to BACEN Circular Letter No. 3196 of July 21, 2005.
(2) Refers to open market funding made by Banco BM&FBOVESPA, consisting of repurchase agreements to July 1,
2014 (2013 - January 2, 2014), backed by Financial Treasury Bills - LFT and National Treasury Bills - LTN.
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
30
14 Provisions for tax, civil and labor contingencies, contingent assets and liabilities and
judicial deposits
a. Contingent assets
BM&FBOVESPA has no contingent assets recognized in its balance sheet and, at present, no lawsuits which
are expected to give rise to future gains.
b. Provisions for tax, civil and labor contingencies
BM&FBOVESPA and its subsidiaries are defendants in a number of judicial and administrative proceedings
involving labor, tax and civil matters arising in the ordinary course of business.
The judicial and administrative proceedings are classified by their probability of loss (probable, possible or
remote), based on an evaluation by BM&FBOVESPA and its legal advisors, using parameters such as
previous legal decisions and the history of loss in similar cases.
The proceedings in which the loss is evaluated as probable comprise mainly the following:
Labor claims mostly relate to claims filed by former employees of BM&FBOVESPA and employees of
outsourced service providers, on account of alleged noncompliance with labor legislation;
Civil proceedings mainly relate to aspects of civil liability for losses and damages of BM&FBOVESPA
and its subsidiaries;
Tax cases mostly relate to PIS and COFINS levied on (i) BM&FBOVESPA revenues and (ii) receipt of
interest on equity.
c. Legal obligations
These are almost entirely proceedings in which BM&FBOVESPA seeks exemption from additional social
security contribution on payroll and payments to self-employed professionals.
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
31
d. Changes in balances
Changes in provisions for contingencies and legal obligations can be detailed as follows:
BM&FBOVESPA
Civil
proceedings Labor claims
Legal
obligations
Tax
proceedings Total
Balances at December 31, 2013 8,242 24,576 35,064 15,489 83,371
Provisions 8 3,486 2,260 - 5,754
Provision expenditure (151) (316) - - (467)
Reversal of provisions (139) (247) - - (386)
Reassessment of risks - 592 - - 592
Monetary restatement 529 1,683 1,188 547 3,947
Balances at June 30, 2014 8,489 29,774 38,512 16,036 92,811
Consolidated
Civil
proceedings Labor claims
Legal
obligations
Tax
proceedings Total
Balances at December 31, 2013 12,967 25,072 35,064 15,489 88,592
Provisions 8 3,560 2,260 - 5,828
Provision expenditure (151) (316) - - (467)
Reversal of provisions (139) (247) - - (386)
Reassessment of risks - 578 - - 578
Monetary restatement 934 1,717 1,188 547 4,386
Balances at June 30, 2014 13,619 30,364 38,512 16,036 98,531
Considering the characteristics of the provisions, the timing of the cash disbursements, if any, cannot be
predicted.
e. Possible losses
The proceedings classified as possible loss are so classified as a result of uncertainties surrounding their
outcome. They are legal or administrative proceedings for which case law has not yet been established or
which still depend on verification and analysis of the facts, or even involve specific aspects that reduce the
chances of loss.
BM&FBOVESPA and its subsidiaries are parties to tax, civil and labor lawsuits involving risks of loss
classified by management as possible, based on the evaluation of BM&FBOVESPA and their legal advisors,
for which no provision has been recorded. These proceedings comprise mainly the following:
Labor claims mostly relate to claims filed by former employees of BM&FBOVESPA and employees of
outsourced service providers, on account of alleged noncompliance with labor legislation. The lawsuits
classified as possible losses at June 30, 2014 total R$43,797, Company and consolidated (R$34,688 at
December 31, 2013);
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
32
Civil proceedings mainly relate to aspects of civil liability for losses and damages. The total amount
involved in the civil lawsuits classified as possible losses at June 30, 2014 is R$89,185 in
BM&FBOVESPA (R$81,315 at December 31, 2013) and R$253,380 on a consolidated basis (R$81,911
at December 31, 2013);
The amount at June 30, 2014 and December 31, 2013 is almost entirely related to two legal proceedings.
The first one refers to the possibility of BM&FBOVESPA being required to deliver its shares (surviving
company of the merger with BM&F S.A.), corresponding to the shares resulting from the conversion of
the membership certificate of a commodities broker in the former BM&F, or indemnify the
corresponding amount, if the cancellation of the certificates in the former BM&F is found to be illegal,
as alleged by a commodities broker in bankruptcy. The second administrative proceeding arises from the
possibility of BVRJ being required to indemnify an investor for alleged omission in an audit report,
brought before the Special Guarantee Fund Commission of BVRJ, of shares that allegedly resulted from
transactions carried out by the investor through a broker, which were not included in the custody
account.
The total amount involved in tax proceedings classified as possible loss is R$722,968, Company and
consolidated (R$577,004 at December 31, 2013). The main tax proceedings of BM&FBOVESPA and its
subsidiaries refer to the following matters:
(i) classification of the former BM&F and Bovespa, in the period prior to the demutualization, as
taxpayers of the Contribution Tax to Social Security Financing ("COFINS"), which is the subject matter
of two declaratory judgment actions pleading the declaration that the plaintiffs have no tax obligations
owed to the federal tax authorities and seeking exemption from COFINS on revenue arising from the
exercise of the activities for which they were established, which does not fall under the concept of
revenue. The amount involved in the aforementioned proceedings as of June 30, 2014 is R$54,558
(R$53,091 at December 31, 2013).
(ii) collection of Withholding Income Tax (IRRF) relating to the calendar year 2008, since the Brazilian
IRS understands that BM&FBOVESPA would be responsible for withholding and paying IRRF on the
supposed capital gains earned by non-resident investors in Bovespa Holding S.A., due to the merger of
shares of Bovespa Holding S.A. into BM&FBOVESPA. The amount involved in this administrative
proceeding at June 30, 2014 is R$172,222 (R$165,225 at December 31, 2013).
(iii) as the successor of Bovespa Holding S.A., the deductibility, for purposes of calculating IRPJ and
CSLL, of expenses paid by Bovespa Holding S.A. in connection with the commission to intermediary
institutions responsible for the secondary public offering of its shares held in 2007, and the liability for
IRRF on part of the payments made to intermediaries who participated in said public offering. The
amount involved in this administrative proceeding at June 30, 2014 is R$132,085 (R$126,755 at
December 31, 2013), classified as follows: (i) R$122,978 (R$118.015 at December 31, 2013) as possible
loss; and (ii) R$9,106 (R$8,739 at December 31, 2013), relating to isolated fine for the non-withholding
of income tax at source, as remote loss.
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
33
(iv) alleged levy of social security contributions on options granted under the Stock Option Plan of
BM&F S.A., assumed by BM&FBOVESPA and exercisable by the beneficiaries of the Plan, in 2007
and 2008, as well as isolated fine due to the non-withholding at source of income tax allegedly due on
those options. The inquiries of the Brazilian IRS are based on the understanding that the stock options
were granted to employees in the nature of salary as they represent compensation for services rendered.
The amounts involved in these administrative proceedings at June 30, 2014 are (i) R$90,515 (R$86,844
at December 31, 2013), relating to social security taxes allegedly due, classified as possible loss, and (ii)
R$48,207 (R$46,252 at December 31, 2013), relating to isolated fine for the non-withholding of income
tax, classified as remote loss.
(v) alleged levy of social security taxes on options granted under the Stock Option Plan of BM&F S.A.,
assumed by BM&FBOVESPA, and of BM&FBOVESPA itself, exercised by the beneficiaries of the
Plan in 2009 and 2010, as well as isolated fine due to the non-withholding at source of income tax
allegedly due on those options. The inquiries of the Brazilian IRS are based on the understanding that
the stock options granted to employees have a salary nature as they represent compensation for services
rendered. The amounts involved in these administrative proceedings at June 30, 2014 are (i) R$117,344,
relating to social security taxes allegedly due, classified as possible loss, and (ii) R$47,028, relating to
isolated fine for the non-withholding of income tax, classified as remote loss.
(vi) alleged differences in payment of IRPJ and CSLL stemming from questioning the limits of deductibility
of interest on equity paid by BM&FBOVESPA to its shareholders in 2008. The total amount involved in this
administrative proceeding is R$124,731 (R$119,672 at December 31, 2013), including arrears interest and
automatic fine.
f. Remote losses
BM&FBOVESPA, as successor of the former BOVESPA, and subsidiary BVRJ figure as defendants in a
claim for property damages and pain and suffering filed by Naji Robert Nahas, Selecta Participações e
Serviços SC Ltda., and Cobrasol - Companhia Brasileira de Óleos e Derivados, on the grounds of alleged
losses in the stock market sustained in June 1989. The amount attributed to the cause by the plaintiffs is
R$10 billion. In relation to property damages and pain and suffering claimed, the plaintiffs ask that
BM&FBOVESPA and BVRJ be sentenced in proportion to their responsibilities. A sentence was published
in which the claims made by the plaintiffs were considered completely unfounded. This sentence was
confirmed by the High Court of Justice of Rio de Janeiro State by means of a decision published on
December 18, 2009. The plaintiffs filed special and extraordinary appeals and both of which were denied.
Bill of reviews was filed with the High Court of Justice and with the Federal Supreme Court of Brazil, which
was accepted for analysis of the appeal to the High Court of Justice filed by the plaintiffs. The appeal is
currently pending judgment. BM&FBOVESPA believes that the chances of loss in this lawsuit are remote.
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
34
On November 29, 2010, BM&FBOVESPA received an assessment notice from the Brazilian IRS demanding
the payment of income tax (R$301,686 of principal, plus fines and interest) and social contribution tax
(R$108,525 of principal, plus fines and interest) that, in the opinion of the Brazilian IRS, BM&FBOVESPA
underpaid in the years 2008 and 2009 with respect to the amortization for tax purposes of the goodwill
generated upon the merger of Bovespa Holding S.A., approved at the Special General Meeting held on May
8, 2008. In October 2011, the Brazilian IRS Judgment Office in São Paulo issued a decision on the challenge
presented by BM&FBOVESPA, upholding, in substance, the assessment notice. BM&FBOVESPA filed an
appeal with the Board of Tax Appeals in November 2011, which was denied in December 2013, thus
upholding the referred to tax notice. Currently, BM&FBOVESPA awaits judgment of the Motions for
Clarification filed at the Administrative Board of Tax Appeals (CARF) at May 15, 2014. BM&FBOVESPA
believes that the risk of loss associated with this tax matter is remote and will continue to amortize the
goodwill for tax purposes as provided for by prevailing legislation.
BM&FBOVESPA, as the successor of Bolsa de Mercadorias e Futuros - BM&F ("BM&F") and as disclosed
in its Form of Reference (item 4.3), figures as a defendant in civil public actions and class actions filed in
order to investigate the practice of possible acts of administrative impropriety, and to receive compensation
for alleged damages to the federal treasury as a result of transactions conducted by the Central Bank of
Brazil in January 1999 in the US dollar futures market run by the former BM&F. On March 15, 2012, those
proceedings were deemed valid and sentenced most of the defendants, among them, BM&F. The total
amount arising from this unfavorable decision is R$7,005 million, and, according to one of the decisions
handed down, the gains that the Central Bank of Brazil obtained by reason of the non-use of international
reserves, amounting to R$5,431 million, may be deducted. BM&FBOVESPA was also ordered to pay a civil
penalty in the amount of R$1,418 million. The figures refer to January 1999 and should be monetarily
restated, including arrears interest and burden of defeat. BM&FBOVESPA believes that these proceedings
are fully groundless and will not recognize in its quarterly information any provision for such lawsuits as the
risk of loss is remote. Appeals were filed, which have caused the execution of the trial court judgment to be
suspended until the Federal Court of Appeals of the 1
st
Chapter renders a decision on those appeals.
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
35
Out of the total judicial deposits, the following are highlighted: (i) R$48,795 (R$47,315 at December 31,
2013) relates to disputes over the classification of the exchanges as subject to payment of COFINS, assessed
as possible loss by BM&FBOVESPA, as described in item “e” above; and (ii) R$11,915 (R$11,425 at
December 31, 2013) refers to cases regarding PIS and COFINS on interest on equity received. Out of the
total deposits relating to legal obligations, R$36,657 (R$33,208 at December 31, 2013) relates to the
processes in which BM&FBOVESPA claims exemption from additional social security tax on payroll and
payments to self-employed professionals, and challenges the legality of FAP (an index applied to calculate
the occupational accident insurance owed by employers).
Due to the existence of judicial deposits related to tax proceedings classified as possible losses, the total tax
contingencies and legal obligations are less than the total deposits related to tax claims.
15 Equity
a. Capital
At the meeting held on February 13, 2014, the Board of Directors approved the cancellation of 80,000,000
shares (Note 15 (b)) issued by BM&FBOVESPA, held in treasury, which were purchased under the share
buyback program. At the General Shareholders’ Meeting held on May 26, 2014, the shareholders resolved
on amendment of the Articles of Incorporation in order to adapt it to the new number of shares representing
the capital.
Due to such cancellation, the capital of BM&FBOVESPA of R$2,540,239 is now represented by
1,900,000,000 registered common shares with voting rights and no par value, of which 1,829,339,241 are
outstanding at June 30, 2014 (1,893,582,856 common shares at December 31, 2013).
BM&FBOVESPA is authorized to increase its capital up to the limit of 2,500,000,000 common shares,
through a resolution of the Board of Directors, without any amendment to its Articles of Incorporation.
b. Treasury shares
Share buyback program
At a meeting held on July 25, 2013, the Board of Directors approved the Company´s Share Buyback
Program, starting on July 1, 2013 and ending on June 30, 2014. The limit of shares to be repurchased by
BM&FBOVESPA is 60,000,000 common shares, representing 3.13% of the total shares outstanding.
BM&FBOVESPA repurchased the 60,000,000 shares projected for the period between July 1, 2013 and
January 29, 2014, of which 23,050,000 in 2013 and 36,950,000 in 2014.
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
36
At a meeting held on February 13, 2014, the Board of Directors approved the Company’s Share Buyback
Program, starting on February 14, 2014 and ending on December 31, 2014. The limit of shares to be
repurchased by BM&FBOVESPA is 100,000,000 common shares, representing 5.4% of the total shares
outstanding.
Until June 30, 2014, BM&FBOVESPA had repurchased 29,077,300 shares in the share buyback program
approved on February, 2014.
The shares acquired under the Share Buyback Program may be canceled or used in connection with the
exercise of the stock options by the beneficiaries of the Stock Option Plan of BM&FBOVESPA.
The changes in treasury shares for the quarter are as follows:
Number Amount
Balances at December 31, 2013 86,417,144 955,026
Purchase of shares - Share buyback program 46,533,100 470,184
Shares cancelled (Note 15(a)) (80,000,000) (859,793)
Shares sold - stock options (Note 18) (535,460) (5,727)
Balances at March 31, 2014 52,414,784 559,690
Purchase of shares - Share buyback program 19,494,200 224,993
Shares sold - stock options (Note 18) (1,248,225) (13,537)
Balances at June 30, 2014 70,660,759 771,146
Average cost of treasury shares (R$ per share)
10.913
Market value of treasury shares
818,958
c. Revaluation reserves
Revaluation reserves were established as a result of the revaluation of works of art in BM&FBOVESPA and
of the properties of the subsidiary BVRJ in 2007, based on independent experts’ appraisal reports.
d. Capital reserve
Refer substantially to amounts originated in the merger of Bovespa Holding shares in 2008, and other
corporate events allowed by the Brazilian Corporation Law, such as (i) capital increase through merger, (ii)
redemption, repayment or purchase of shares, and (iii) events associated with the stock option plan.
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
37
e. I ncome reserves
(i) Legal reserve
Legal reserve is annually set up with allocation of 5% of net income for the year, capped at 20% of capital.
The legal reserve aims at ensuring integrity of capital and may only be used to absorb losses and increase
capital.
(ii) Statutory reserves
Represent funds and safeguard mechanisms required for the activities of BM&FBOVESPA, in order to
ensure the proper settlement and reimbursement of losses arising from the intermediation of transactions
carried out in its trading sessions and/or registered in any of its trading, registration, clearing and settlement
systems, and from custody services.
Pursuant to the Articles of Incorporation, the Board of Directors may, when the amount of the statutory
reserve is sufficient to meet the purposes for which it was originally established, propose that part of the
reserve be distributed to the shareholders of the Company.
f. Other comprehensive income
The purpose is to record the effects of (i) exchange variation of investments abroad, (ii) hedge accounting on
net foreign investment (Note 12), (iii) cash flow hedge (Note 4), (iv) comprehensive income of associate and
subsidiaries and (v) actuarial gains/losses on post-retirement health care benefits.
g. Dividends and interest on equity
As provided for in the Articles of Incorporation, shareholders are entitled mandatory minimum dividends of
25% of net income for the year, adjusted under Brazilian Corporation Law.
At the Ordinary General Meeting held on March 24, 2014 approval was given to proposed payment of dividends
to shareholders, of R$145,703 a complement of dividends relating to income for the year ended December 31,
2013, which will be paid on June 27, 2014.
The dividends approved in relation to P&L for the half-year period are as follows:
Description
Approval
date
Payment
date
Gross amount
per share (R$)
Total gross
amount
Dividends 05/08/2014 05/30/2014 0.111538 204,914
Total amount approved for
the period
204,914
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
38
The management of BM&FBOVESPA did not set up an income reserve for the difference between the
amount recognized as equity pickup and the amount received as dividends arising from the interest held in
the associate CME Group (Note 7).
h. Earnings per share
Consolidated
Basic 2014 2013
2nd quarter Accumulated 2nd quarter Accumulated
Numerator
Net income available to shareholders of
BM&FBOVESPA 250,077 506,219 350,835 617,810
Denominator
Weighted average number of outstanding shares 1,835,726,059 1,839,727,630 1,923,804,897 1,923,610,563
Basic earnings per share (in R$) 0.136228 0.275160 0.182365 0.321172
Diluted 2014 2013
2nd quarter Accumulated 2nd quarter Accumulated
Numerator
Net income available to shareholders of
BM&FBOVESPA 250,077 506,219 350,835 617,810
Denominator
Weighted average number of outstanding shares
adjusted by effects of stock option plans 1,844,166,794 1,842,868,848 1,933,112,502 1,929,998,686
Diluted earnings per share (in R$) 0.135604 0.274691 0.181487 0.320109
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
19 137 143 270
Other related parties
Accounts receivable 12 9
Accounts payable - (10)
Recovery of expenses
38 78 39 60
(1) Subsidiaries included in the consolidation process.
The main recurring transactions with related parties are described below and were carried out under the
following conditions:
BM&FBOVESPA pays a minimum monthly fee to Bolsa Brasileira de Mercadorias. The payment that
BM&FBOVESPA makes to Bolsa Brasileira de Mercadorias is established by the articles of incorporation of
the latter, under which the member (as is the case of BM&FBOVESPA) must regularly pay fees for
membership certificates.
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
40
Bolsa Brasileira de Mercadorias periodically reimburses BM&FBOVESPA for expenses associated with the
resources and infrastructure provided by BM&FBOVESPA to aid in carrying out its activities.
In order to further the development of the market and strengthen the founding member commitment to the
development of markets administered by Bolsa Brasileira de Mercadorias, BM&FBOVESPA decided to
offer, free of charges, services provided by the Founding Member that may be necessary for the development
of markets administered by Bolsa Brasileira de Mercadorias, in the amount of R$2,970, for a maximum
period of 5 years as from April 2013, upon the previous approval of the Founding Member.
The amounts owed by Banco BM&FBOVESPA to BM&FBOVESPA refer to the Company’s funds used by
Banco BM&FBOVESPA in performing its activities under a formal agreement signed by the parties. Such
amounts are paid upon presentation of a descriptive document prepared by BM&FBOVESPA and approved
by Banco BM&FBOVESPA, according to the terms of the agreement.
Other liabilities to CME Group refer to the remaining portion for the acquisition of the perpetual license of
modules related to the multi-asset class electronic trading platform, PUMA Trading System, which was
developed along with CME Group.
BSM has entered into an agreement with BM&FBOVESPA for the transfer and recovery of costs which
establishes the reimbursement to BM&FBOVESPA for expenses incurred for resources and infrastructure
made available to BSM to assist it in the performance of its supervision activities. Such costs are determined
on a monthly basis using the methodology specified in the agreement signed by the parties and also include
the activities related to the Mecanismo de Ressarcimento de Prejuízos (Loss Recovery Mechanism) as this
mechanism is administered by BSM.
BM&FBOVESPA monthly pays BM&F (USA) Inc. and BM&FBOVESPA (UK) Ltd. for representing it
abroad by liaising with other exchanges and regulators and assisting in bringing new clients to the Brazilian
capital market.
Associação BM&F, Associação Bovespa, Instituto BM&FBOVESPA and Associação Profissionalizante
BM&FBOVESPA periodically reimburse BM&FBOVESPA for expenses associated with the resources and
infrastructure provided by BM&FBOVESPA to assist them in performing their activities.
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
41
b. Key management personnel compensation
Key management personnel include Members of the Board of Directors, Executive Officers, the Internal Audit
Officer, the Corporate Risk Officer, the Officer of Banco BM&FBOVESPA and the Human Resources Officer.
(1) Represents the expense calculated for the period in relation to the stock options granted to key management personnel,
which was recognized in accordance with the criteria described in Note 18.
17 Structure of guarantees
BM&FBOVESPA operating as a central counterparty (CCP) manages four clearinghouses considered
systemically important by the Central Bank of Brazil: the Derivatives, Foreign Exchange and Securities
Clearinghouses and the Equity and Corporate Debt Clearinghouse (CBLC).
On March 5, 2014, according to BM&FBOVESPA Circular Letter No. 003/2014, new versions of
BM&FBOVESPA Clearinghouses rules became effective, aiming towards convergence with international
capital requirement rules under Basel III Accord by financial institutions subject to credit risk of clearinghouses.
These changes were approved by BACEN in January 2014.
The transactions in the BM&FBOVESPA markets are secured by margin deposits in cash, government and
corporate securities, letters of guarantee and shares, among others. The guarantees received in cash, in the
amount of R$1,069,246 (R$2,072,989 at December 31, 2013), are recorded as liabilities under Collateral for
transactions and other non-cash collaterals, in the amount of R$210,369,501 (R$212,316,376 at December 31,
2013), and recorded in memorandum accounts. At June 30, 2014, collaterals deposited, comprised of clearing,
amounted to R$211,438,747 (R$214,389,365 at December 31, 2013), as shown below:
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
42
a. Collaterals deposited by the market participants
i) Derivatives Clearinghouse
Breakdown 06/30/2014 12/31/2013
Government securities 122,980,425 118,581,479
Letters of guarantee 2,656,634 2,796,183
Shares 4,973,975 4,019,309
Bank Deposit Certificates (CDBs) 903,126 1,185,727
Cash amounts deposited 769,731 701,705
Gold 24,068 56,182
Other 255,797 66,000
Total 132,563,756 127,406,585
ii) Equity and Corporate Debt Clearinghouse (CBLC).
Breakdown 06/30/2014 12/31/2013
Government securities 31,800,569 34,423,146
Shares 38,252,932 42,654,968
International Securities (1) 2,681,130 1,616,091
Bank Deposit Certificates (CDBs) 295,206 239,198
Letters of guarantee 1,057,407 1,055,421
Cash amounts deposited 222,118 212,527
Other 124,312 86,429
Total 74,433,674 80,287,780
(1) North American and German government securities as well as American Depositary Receipts (ADRs).
iii) Foreign Exchange Clearinghouse
Breakdown 06/30/2014 12/31/2013
Government securities 3,627,826 4,782,607
Cash amounts deposited 77,088 1,154,906
Total 3,704,914 5,937,513
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
43
iv) Assets Clearinghouse
Breakdown 06/30/2014 12/31/2013
Government securities 736,403 757,487
b. Other safeguard mechanisms
i) Derivatives Clearinghouse
Joint liability for paying the broker and clearing member that acted as intermediaries, as well as collaterals
deposited by such participants.
Fundo de Desempenho Operacional, composed of funds provided by holders of right of settlement in the
Derivatives Clearinghouse (clearing members) and holders of unrestricted right to bargain with the sole
purpose of guaranteeing the operations. This fund has the following position:
Breakdown 06/30/2014 12/31/2013
Government securities 840,178 852,276
Letters of guarantee 137,750 141,000
Bank Deposit Certificates (CDBs) 5,810 5,720
Shares 10,538 10,765
Cash amounts deposited 109 224
Amounts deposited 994,385 1,009,985
Amounts required of participants 788,500 808,500
Amount in excess of the minimum required 205,885 201,485
Fundo de Operações do Mercado Agropecuário, in the amount of R$50,000 at June 30, 2014 and December
31, 2013, intended to hold funds of BM&FBOVESPA to guarantee the proper settlement of transactions
involving agricultural commodity contracts.
Fundo Especial dos Membros de Compensação, in the amount of R$40,000 until December 31, 2013,
intended to hold funds of BM&FBOVESPA to guarantee the proper settlement of transactions, regardless of
the type of contract. This fund was terminated on March 5, 2014.
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
44
Fundo de Liquidação de Operações, composed of collaterals transferred by clearing members and
BM&FBOVESPA funds. This fund has the following position:
Breakdown 06/30/2014 12/31/2013
Government securities 566,749 322,274
Letters of guarantee 29,000 30,750
Shares 3,012 3,075
Amounts deposited 598,761 356,099
Amounts required of participants 245,000 252,000
Amount required of BM&BOVESPA (1) 245,000 -
Amount in excess of the minimum required 108,761 104,099
(1) Comprised of Federal Government Securities.
Patrimônio Especial (Special equity), in the amount of R$48,058 (R$45,729 at December 31, 2013), in
compliance with the provisions of article 5 of Law No. 10214, of March 27, 2001, and article 19 of BACEN
Circular No. 3057, of August 31, 2001.
ii) Equity and Corporate Debt Clearinghouse (CBLC)
Joint liability for paying the broker and clearing member that acted as intermediaries, as well as collaterals
deposited by such participants.
The Settlement Fund, composed of collaterals transferred by clearing members and BM&FBOVESPA
funds, intended to guarantee the proper settlement of transactions.
Breakdown 06/30/2014 12/31/2013
Government securities 665,356 393,283
Cash amounts deposited - 2,627
Amounts deposited 665,356 395,910
Amounts required of participants 280,300 272,400
Amount required of BM&BOVESPA (1) 280,300 -
Amount in excess of the minimum required 104,756 123,510
(1) Comprised of Federal Government Securities.
Patrimônio Especial (Special equity), in the amount of R$49,681 (R$48,874 at December 31, 2013), in
compliance with the provisions of article 5 of Law No. 10214, of March 27, 2001, and article 19 of BACEN
Circular No. 3057, of August 31, 2001.
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
45
iii) Foreign Exchange Clearinghouse
Fundo de Liquidação de Operações de Câmbio, formerly Fundo de Participação, composed of collaterals
transferred by Foreign Exchange Clearinghouse participants and BM&FBOVESPA funds, intended to
guarantee the proper settlement of transactions.
Breakdown 06/30/2014 12/31/2013
Government securities 295,012 214,809
Cash amounts deposited 200 1,000
Amounts deposited 295,212 215,809
Amounts required of participants 106,250 111,000
Amount required of BM&BOVESPA (1) 106,250 -
Amount in excess of the minimum required 82,712 104,809
(1) Comprised of government securities.
Fundo Operacional da Clearing de Câmbio, in the amount of R$50,000 up to December 31, 2013, intended
to hold funds of BM&FBOVESPA to cover losses arising from operational or administrative failures. This
fund ceased to exist as from March 5, 2014.
Patrimônio Especial (Special equity), in the amount of R$48,142 (R$45,799 at December 31, 2013), in
compliance with the provisions of article 5 of Law No. 10214, of March 27, 2001, and article 19 of BACEN
Circular No. 3057, of August 31, 2001.
iv) Assets Clearinghouse
Fundo Operacional da Clearing de Ativos, in the amount of R$40,000 at June 30, 2014 and December 31,
2013, intended to hold funds from BM&FBOVESPA to cover losses arising from participants’ operational
or administrative failures.
Patrimônio Especial (Special equity), in the amount of R$33,840 (R$32,200 at December 31, 2013), in
compliance with the provisions of article 5 of Law No. 10214, of March 27, 2001, and article 19 of BACEN
Circular No. 3057, of August 31, 2001.
c. Guarantee funds
Subsidiaries Bolsa Brasileira de Mercadorias and Bolsa de Valores do Rio de Janeiro (BVRJ) also manage
Guarantee Funds, special purpose entities without a legal status. The maximum liability of these Guarantee
Funds is limited to the sum of their net assets.
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
46
18 Employee benefits
a. Stock options – Long-term benefit
BM&FBOVESPA has a Stock Option Plan (Option Plan) approved at the Special General Meeting held on May
8, 2008, as amended at the Special General Meeting held on April 18, 2011 and at the Annual and Special
General Meeting held on April 15, 2013, by which the employees of BM&FBOVESPA and its subsidiaries are
eligible to receive stock options.
As from 2013, the Plan provides for granting of stock options to the Board of Directors, under item 13, through
which a total of 330,000 options will be granted annually, to be distributed equally among them. The options
will be granted to said Directors in a single lot, and may be exercised by the beneficiary after two years, as from
the end of each term of office as a Director of the Board of Directors in which the related options were granted.
Currently there are nine Programs to grant options under the Option Plan, approved by the Board of Directors,
and one stock option grant to said Directors.
BM&FBOVESPA recognized expenses related to grants of the Option Plan in the amount of R$14,450 for the
six-month period (R$15,718 at June 30, 2013) and R$7,591 for the quarter (R$7,841 in 2013), matched against
capital reserves in equity. BM&FBOVESPA considered in this calculation an estimated turnover between 11%
and 20%, i.e. the estimated number of options which will not vest due to employees who opt to leave
BM&FBOVESPA or whose employment is terminated before achieving vested rights to exercise the options.
At June 30, 2014, BM&FBOVESPA used 2.29% (1.69% at December 31, 2013) of the total limit of 2.5% of the
capital for stock option grants, leaving 0.21% of the capital for new programs. When the options are exercised
by the beneficiaries, new shares will be issued, by increasing the capital of BM&FBOVESPA, or treasury shares
will be used.
The exercise price per share is equal to the average closing price of the 20 trading days preceding the date of
grant, subject to vesting periods for its exercise.
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
47
Total options granted
Plan Grant date
Vesting
period
Exercise price
(R$ per share) Granted
Exercise and
canceled in prior
periods
Canceled and
lapsed at
06/30/2014
Exercised at
06/30/2014
Outstanding
contracts at
06/30/2014
Fair value of
options on the
grant date (R$
per share)
Program 2008 12/19/2008 06/30/2009 5.174 1,132,966 (1,104,841) - (4,775) 23,350 3.71
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
49
Effects arising from the exercise of options
1H14 1H13
Amount received from the exercise of options 16,102 42,811
(-) Cost of treasury shares disposed of (19,264) (48,682)
Effect from disposal of shares (3,162) (5,871)
b. Supplementary pension plan
The pension plan Fundo de Pensão Multipatrocinado das Instituições do Mercado Financeiro e de Capitais
(Mercaprev) is structured as a defined contribution plan, having BM&FBOVESPA as one of its sponsors, with
voluntary participation open to all employees.
c. Post-retirement health care benefit
BM&FBOVESPA maintains a post-retirement health care plan for a group of employees and former employees.
At June 30, 2014, the actuarial liabilities related to this plan were R$27,405 (R$25,940 at December 31, 2013),
calculated using the following assumptions at December 31, 2013, still applicable at June 30, 2014:
Average life expectancy in years of a pensioner retiring at age 65 is as follows:
Retirement at balance sheet date (age 65) 20 years
Retirement at balance sheet date (age 40 today) 20 years
The sensitivity of the actuarial liability of the health care plan at December 31, 2013 to the changes in key
assumptions is as follows:
Increase of 0.5% Decrease of 0.5%
Discount rate (1,636) 1,814
Medical inflation 1,914 (1,747)
Life expectancy
+ 1
Life expectancy
- 1
Mortality table 1,045 (1,029)
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
50
19 Income tax and social contribution
a. Deferred income tax and social contribution
The balances of deferred tax assets and liabilities are as follows:
BM&FBOVESPA and Consolidated
Description 06/30/2014 12/31/2013
Tax, civil and labor contingencies 18,742 16,554
Tax loss carryforwards 63,724 29,107
Exchange variation on issuance of debt abroad 91,355 120,499
Other temporary differences 32,553 36,877
Total deferred assets 206,374 203,037
Goodwill amortization (1) (2,572,635) (2,295,347)
Other (5,186) (427)
Total deferred liabilities (2,577,821) (2,295,774)
Deferred taxes, net (2,371,447) (2,092,737)
(1) Deferred income tax and social contribution liabilities arising from temporary differences between the tax base of
goodwill and its carrying amount on the balance sheet, considering that goodwill is still amortized for tax purposes, but
is no longer amortized for accounting purposes as from January 1, 2009, resulting in a tax base lower than the carrying
amount of goodwill. This temporary difference may result in amounts becoming taxable in future periods, when the
carrying amount of the asset will be reduced or settled, thus requiring the recognition of a deferred tax liability.
Changes in deferred tax assets and liabilities during the period:
BM&FBOVESPA and Consolidated
12/31/2013
Debt (credit) in
the income
statement
Debt (credit) in
comprehensive
income 06/30/2014
Deferred assets
Tax, civil and labor contingencies 16,554 2,188 - 18,742
Deferred assets on tax loss carryforwards 29,107 34,617 - 63,724
Exchange variation on issuance of debt abroad 120,499 - (29,144) 91,355
Other temporary differences 36,877 (4, 324) - 32,553
Total deferred assets 203,037 32,481 (29,144) 206,374
Deferred liabilities
Goodwill amortization (2,295,347) (277,288) - (2,572,635)
Other (427) (4,759) - (5,186)
Total deferred liabilities (2,295,774) (282,047) - (2,577,821)
Deferred taxes, net (2,092,737) (249,566) (29,144) (2,371,447)
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
51
b. Estimated realization period
Deferred income tax and social contribution assets arising from temporary differences are recorded in the books
taking into consideration their probable realization, based on projections of future results prepared based on
internal assumptions and future economic scenarios that may, accordingly, not materialize as expected.
Deferred tax assets (including tax loss carryforwards of R$63,724) are expected to be realized in the amount of
R$33,786 within one year and R$172,588 after one year, and deferred liabilities are expected to be incurred after
one year. At June 30, 2014, the present value of the deferred tax assets, considering their expected realization, is
R$139,882.
Since the income tax and social contribution base arise not only from the profit that may be generated, but also
from the existence of nontaxable income, nondeductible expenses, tax incentives and other variables, there is no
immediate correlation between BM&FBOVESPA net income and the income subject to income tax and social
contribution. Therefore, the expected use of deferred tax assets should not be considered as the only indicator of
future income of BM&FBOVESPA.
The balance of goodwill that is deductible for income tax and social contribution purposes is R$5,590,485 at
June 30, 2014 (R$6,406,038 at December 31, 2013).
The realization of the deferred tax liabilities will occur as the difference between the tax base of goodwill and its
carrying amount is reversed, that is, when the carrying amount of the asset is either reduced or settled.
c. Reconciliation of income tax and social contribution expense
Reconciliation of the income tax and social contribution amounts recorded in P&L (Company and consolidated)
and their respective amounts at statutory rates are as under:
BM&FBOVESPA
2014 2013
2nd quarter Accumulated 2nd quarter Accumulated
Income before income tax and social contribution 389,981 790,285 516,517 938,334
Income tax and social contribution before additions and
exclusions computed at the statutory rate of 34% (132,594) (268,697) (175,616) (319,034)
Additions: (23,596) (49,635) (25,380) (49,822)
Stock Option Plan (2,581) (4,913) (2,666) (5,344)
Nondeductible expenses - permanent (1) (21,015) (44,722) (22,714) (44,478)
Exclusions: 16,286 34,266 35,308 48,324
Equity pickup 16,286 34,266 18,308 31,324
Interest on Equity (IOE) - - 17,000 17,000
Other - - 6 8
Income tax and social contribution (139,904) (284,066) (165,682) (320,524)
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
52
Consolidated
2014 2013
2nd quarter Accumulated 2nd quarter Accumulated
Income before income tax and social contribution 391,144 792,689 517,474 939,955
Income tax and social contribution before additions
and exclusions computed at the statutory rate of 34% (132,989) (269,514) (175,941) (319,585)
Additions: (23,252) (49,108) (25,055) (49,514)
Stock Option Plan (2,581) (4,913) (2,666) (5,344)
Nondeductible expenses - permanent (1) (20,671) (44,195) (22,389) (44,170)
Exclusions: 15,313 32,371 34,463 47,095
Equity pickup 15,313 32,371 17,463 30,095
Interest on Equity (IOE) - - 17,000 17,000
Other - - 6 8
Income tax and social contribution (140,928) (286,251) (166,527) (321,996)
(1) Refers mainly to R$34,500 of recoverable income tax paid abroad (Note 7).
d. Taxes recoverable and prepaid
Taxes recoverable and prepaid are as follows:
BM&FBOVESPA
Description 06/30/2014 12/31/2013
Prepaid IRPJ/CSLL - current period 28 7,989
IRRF - Financial investments - current period 38,548 49,252
IRPJ/CSLL tax losses - prior years 68,423 13,904
Taxes paid abroad 24,765 24,765
PIS/COFINS recoverable 20,361 20,138
Other taxes 4,241 4,332
Total 156,366 120,380
Consolidated
Description 06/30/2014 12/31/2013
Prepaid IRPJ/CSLL - current period 28 7,988
IRRF - Financial investments - current period 38,548 49,252
IRPJ/CSLL tax losses - prior years 68,423 13,904
Taxes paid abroad 24,765 24,765
PIS/COFINS recoverable 20,361 20,138
Other taxes 4,251 4,349
Total 156,376 120,396
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
53
e. Transition Tax Regime (RTT)
The Brazilian Internal Revenue Service (RFB) Revenue Procedure No. 1,397, of September 16, 2013 and Law
No. 12.973/2013, of May 13, 2014, conversion of Provisional Executive Order (MP) No. 627 Measurement of
November 11, 2013 ("MP No. 627/13") significantly amend the federal tax regulations, especially regarding the
adjustments required for the extinguishment of the Transition Tax Regime (RTT) set forth by Law No. 11941, of
May 27, 2009. The provisions of this Law will compulsorily effective from the calendar year 2015 (Article 117),
and was provided the option of applying its effect from the calendar year 2014 (Article 75).
Based on management's analysis on the possible tax impacts of the new provisions of Law No. 12.973/2014,
BM&FBOVESPA will adopt the provisions contained in articles 1
st
, 2
nd
and 4
th
to 70
th
of said Law as from
calendar year 2014, under the terms of article 75.
Bolsa Brasileira de Mercadorias - fees and contributions 821 1,945 1,418 2,210
Banco - Trading and bank fees
6,206 12,660 5,117 9,815
Other
3,922 8,286 3,314 7,132
Deductions
(51,667) (108,065) (68,979) (128,546)
PIS and COFINS
(45,107) (94,405) (60,537) (112.912)
Service Tax (ISS)
(6,560) (13,660) (8,442) (15,634)
Revenue
464,780 954,464 599,820 1,120,839
(1) In April 2013, given changes in the policies of the spot market, trading and after-trading fees (transactions) for local
institutional investors and day traders were rebalanced, and the fees for the other investors were reduced.
(1) Basically refers to the provision for contingencies and allowance for doubtful accounts.
22 Financial income (expenses)
BM&FBOVESPA
2014 2013
2nd quarter Accumulated 2nd quarter Accumulated
Financial income
Income from assets financial assets measured at fair
value 77,653 149,050 62,295 119,574
Exchange gains 9,172 14,598 5,829 7,532
Other financial income 1,934 3,523 6,640 8,720
88,759 167,171 74,764 135,826
Financial expenses
Interest and exchange variation on foreign debt (21,707) (44,831) (23,461) (43,558)
Exchange losses (6,553) (12,993) (4,023) (6,026)
Other financial expenses (1,683) (2,975) (4,821) (6,687)
(29,943) (60,799) (32,305) (56,271)
Financial income (expenses) 58,816 106,372 42,459 79,555
Consolidated
2014 2013
2nd quarter Accumulated 2nd quarter Accumulated
Financial income
Income from financial assets measured at fair value 78,715 151,123 62,950 120,950
Exchange gains 9,172 14,598 5,829 7,532
Other financial income 1,948 3,547 6,942 8,727
89,835 169,268 75,721 137,209
Financial expenses
Interest and exchange variation on foreign debt (21,707) (44,831) (23,461) (43,558)
Exchange losses (6,553) (12,993) (4,024) (6,027)
Other financial expenses (2,031) (3,881) (5,149) (7,408)
(30,291) (61,705) (32,634) (56,993)
Financial income (expenses) 59,544 107,563 43,087 80,216
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
56
23 Business segment reporting
We present below consolidated information based on reports used by the Executive Board for making decisions,
comprising the following segments: Bovespa, BM&F, Institutional and Corporate Products. Due to the nature of
the business, the Executive Board does not use any information on assets and liabilities by segment to support
decision-making.
There were no changes in the structure of segments reported in the financial statements as of December 31,
2013.
June 30, 2014
Consolidated
Bovespa
Segment BM&F Segment
Institutional and
Corporate Products
Segment Total
Trading and/or settlement system 441,490 420,270 200,769 1,062,529
Deductions (46,457) (43,044) (18,564) (108,065)
Revenue 395,033 377,226 182,205 954,464
Adjusted expense (88,199) (95,835) (86,590) (270,624)
Depreciation and amortization (19,341) (25,321) (12,935) (57,597)
Stock options (4,580) (5,152) (4,718) (14,450)
Allowance for doubtful accounts and
other provisions (2,835) (2,593) (1,605) (7,033)
Transfer of fines (1,865) (1,654) (509) (4,028)
Other (5,008) (4,441) (1,365) (10,814)
Total expense (121,828) (134,996) (107,722) (364,546)
P&L 273,205 242,230 74,483 589,918
Equity pickup
95,208
Financial income (expenses)
107,563
Income tax and social contribution
(286,251)
Net income for the period 273,205 242,230 74,483 506,438
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
57
June 30, 2013
Consolidated
Bovespa
Segment BM&F Segment
Institutional and
Corporate Products
Segment Total
Trading and/or settlement system 545,661 490,598 213,126 1,249,385
Deductions (57,680) (50,775) (20,091) (128,546)
Revenue 487,981 439,823 193,035 1,120,839
Adjusted expense (97,436) (78,073) (81,619) (257,128)
Depreciation and amortization (24,996) (19,069) (11,841) (55,906)
Stock options (5,900) (4,970) (4,848) (15,718)
Allowance for doubtful accounts and
other provisions (3,954) (3,760) (3,449) (11,163)
Other (4,396) (4,128) (1,177) (9,701)
Total expense (136,682) (110,000) (102,934) (349,616)
P&L 351,299 329,823 90,101 771,223
Equity pickup
88,516
Financial income (expenses)
80,216
Income tax and social contribution
(321,996)
Net income for the period 351,299 329,823 90,101 617,959
24 Other information
a. BM&FBOVESPA seeks advice from insurance brokers to ensure that it has a sufficient level of insurance
cover for its size and operations. The main coverage in its insurance policies at June 30, 2014 is shown
below:
Insurance line Amounts insured
Amounts at risk, property damages, buildings and equipment 416,563
Civil liability 134,000
Works of art 16,133
b. Associação Profissionalizante BM&FBOVESPA (APBM&FBOVESPA) is a not-for-profit entity engaged in
promoting educational, social welfare and sports activities. The sports-related initiatives included offering
support to the BM&FBOVESPA Athletics Club and sponsorship to athletes (these activities were
incorporated by specific association, known as Clube de Atletismo BM&FBOVESPA in July 2013).
APBM&FBOVESPA is supported by the BM&FBOVESPA Institute, a not-for-profit association that has
BM&FBOVESPA as its founding member.
BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros
Notes to quarterly information
June 30, 2014
(In thousands of reais)
58
APBM&FBOVESPA figures as a defendant in legal and administrative proceedings involving tax matters,
classified as probable loss, most of which are related to challenges by Brazilian IRS about social security
contributions allegedly owed by APBM&FBOVESPA on payments made to third parties and on sponsorships
to athletes of the BM&FBOVESPA Athletics Club. If the outcome of these proceedings is not favorable to
APBM&FBOVESPA, BM&FBOVESPA may have to provide funds to maintain the activities of the
BM&FBOVESPA Athletics Club. The case amounts at June 30, 2014 total R$16,948.
25 Subsequent events
a. At the meeting held on August 07, 2014, the Board of Directors approved payment of dividends to
shareholders of R$200,061, which will be attributed to mandatory dividends for 2014. Dividends will be paid
out on August 29, 2014, and the equity position on August 11, 2014 will be used as calculation base.
b. BM&FBOVESPA repurchased 1,170,00 shares between July 1 and 23, 2014, observing the black-out period
to the business, as determined by CVM Ruling No. 358, in the Share Buyback Program approved by the
Board of Directors on February 13, 2014 (Note 15(b)).
26 Notes submitted in the annual financial statements that are not being fully presented
in the quarterly information
In accordance with CPC 21 (R1) – Interim Financial Reporting and CVM/SNC/SEP Circular Letter No.
003/2011, the following notes have been condensed in this quarterly information, compared to the annual
financial statements for the year ended December 31, 2013:
Note 1 – Operations
Note 2 – Preparation and presentation of the quarterly information
Note 3 – Significant accounting practices
Note 4 – Cash and cash equivalents and financial investments
Note 8 – Property and equipment (P&E)
Note 9 – Intangible assets
Note 12 – Debt issued abroad
Note 17 – Structure of guarantees
Nota 18 – Employee benefits
Note 23 – Business segment reporting