panhia Brasileira de Distribuicao(CBD) - 2018 Q4 - Annual Report

Market Risk Management - The company is exposed to market risks from changes in foreign currency and interest rates, with a net foreign currency exposure of R$76 million as of December 31, 2018, compared to R$7 million in 2017 and R$177 million in 2016 [543]. - The company has a treasury policy that includes cross-currency interest rate swaps to manage financial market risk, effectively converting U.S. dollar-denominated liabilities to obligations in reais [538]. - The company engages in derivative financial instruments to mitigate risks from fluctuating currency and interest rates, with realized and unrealized gains and losses included in financial income and expenses [538]. - The company’s foreign currency exposure is primarily related to U.S. dollar-denominated debt, with cross-currency interest rate swaps partially hedging this exposure [543]. Interest Rate Management - The company utilizes interest rate swap agreements to manage interest costs, with floating rate debt primarily based on the CDI rate, which was 6.4% as of December 31, 2018 [540]. - The company’s interest rate risk management includes periodically retiring, redeeming, and repurchasing debt in response to market changes [540]. - The average paying rate for cross-currency interest rate swaps is 102.59% over CDI, with an average receiving rate of USD + 3.26% per year [545]. Financial Position - Total cash and cash equivalents amounted to R$4,369 million, with cash in banks and cash equivalents in reais representing 85.78% of the CDI [542]. - Total liabilities were R$5,450 million, with floating rate loans and financing denominated in U.S. dollars and reais [542]. - As of December 31, 2018, total loans and financing amounted to R$1,292 million, with R$767 million in U.S. dollars and R$525 million in euros [545]. - The company has a total of R$4,146 million in debentures, with expected maturities of R$500 million in 2022 [545]. - The company has not experienced difficulties in obtaining financing or refinancing existing debt, indicating strong liquidity and capital resources [543]. Regulatory Compliance - The company is required to disclose material acts or events that may influence the price of its publicly traded securities, including changes in shareholder participation [436]. Agreements and Fees - The company received US$3.33 million from J.P. Morgan Chase Bank N.A. for annual stock exchange listing fees and maintenance costs related to the ADR program from January 1, 2018, to December 31, 2018 [550]. - The company has established a reimbursement agreement with JPMorgan Chase Bank for expenses related to the ADS program, including annual stock exchange listing fees and maintenance costs [550].