vivoitr2q16_6k.htm - Generated by SEC Publisher for SEC Filing

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of August, 2016

Commission File Number: 001-14475

TELEFÔNICA BRASIL S.A.
(Exact name of registrant as specified in its charter)

TELEFONICA BRAZIL S.A.
(Translation of registrant’s name into English)

Av. Eng° Luís Carlos Berrini, 1376 - 28º andar
São Paulo, S.P.
Federative Republic of Brazil
(Address of principal executive office)

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

Form 20-F

Form 40-F

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

Yes

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

Yes

TELEFÔNICA BRASIL S.A.

QUARTERLY INFORMATION

JUNE 30, 2016




		São Paulo Corporate Towers Av. Presidente Juscelino Kubitschek, 1.909 Vila Nova Conceição 04543-011 - São Paulo - SP - Brasil Tel: +55 11 2573-3000 ey.com.br

A free translation from Portuguese into English of Independent Auditor’s Report on interim financial information prepared in Brazilian currency in accordance with accounting practices adopted in Brazil and International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB)

Independent auditor’s report on interim financial information

To Shareholders, Board of Directors and Officers

Telefônica Brasil S.A.

São Paulo - SP

We have reviewed the individual and consolidated interim financial information of Telefônica Brasil S.A., (“Company”), contained in the Quarterly Information Form (Informações Trimestrais - ITR) for the quarter ended on June 30, 2016, which comprise the balance sheet as of June 30, 2016 and the related statements of income and of comprehensive income for the three-month and six-month period ended on June 30, 2016, and changes in equity and of cash flows for the six-month period then ended, including other explanatory information.

Management is responsible for the preparation of the individual and consolidated interim financial information in accordance with Accounting Standard CPC 21 (R1) Interim Financial Reporting (Demonstração Intermediária) issued by Comitê de Pronunciamentos Contábeis - CPC and with IAS 34 – Interim Financial Reporting, issued by the International Accounting Standards Board (IASB), as well as for the presentation of this information in conformity with the standards issued by the Brazilian Securities and Exchange Commission (CVM) applicable to the preparation of Quarterly Information Form (ITR). Our responsibility is to express a conclusion on this interim financial information based on our review.

Scope of review

We conducted our review in accordance with Brazilian and International Standards on Review Engagements (NBC TR 2410 - Revisão de Informações Intermediárias Executada pelo Auditor da Entidade and ISRE 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). 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 auditing standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion on the individual and consolidated interim financial information

Based on our review, nothing has come to our attention that causes us to believe that the individual and consolidated interim financial information included in the Quarterly Information Form (ITR) referred to above were not prepared, in all material respects, in accordance with CPC 21 (R1) and IAS 34 applicable to the preparation of the Quarterly Information Form (ITR), and presented consistently with the rules issued by the Brazilian Securities and Exchange Commission (CVM).




		São Paulo Corporate Towers Av. Presidente Juscelino Kubitschek, 1.909 Vila Nova Conceição 04543-011 - São Paulo - SP - Brasil Tel: +55 11 2573-3000 ey.com.br

Other matters

Statements of value added

We have also reviewed the individual and consolidated interim Value Added Statement for the six-month period ended on June 30, 2016, prepared under management’s responsibility, whose presentation in the interim financial information is required by the rules issued by the Brazilian Securities and Exchange Commission (CVM) applicable to preparation of the Quarterly Information Form (ITR), and as supplementary information under IFRS, which do not require Value Added Statement presentation. This statement has 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 it is not fairly presented, in all material respects, in relation to the overall accompanying interim financial information.

São Paulo, July 25, 2016.

ERNST & YOUNG

Auditores Independentes S.S.

CRC-2SP015199/O-6

Luiz Carlos Passetti

Contador CRC-1SP144343/O-3

TELEFÔNICA BRASIL S.A.
Balance Sheets
At June 30, 2016 and December 31, 2015
(In thousands of reais)

		Company		Consolidated				Company		Consolidated
ASSETS	Note	06.30.16	12.31.15	06.30.16	12.31.15	LIABILITIES AND SHAREHOLDERS’ EQUITY	Note	06.30.16	12.31.15	06.30.16	12.31.15

Current assets		17,576,182	15,185,519	18,541,442	17,909,303	Current liabilities		18,706,671	15,948,843	18,952,498	17,981,713
Cash and cash equivalents	4	5,063,123	4,206,595	5,675,712	5,336,845	Personnel, social charges and benefits	14	765,811	520,023	781,899	698,846
Trade accounts receivable, net	5	8,201,726	7,000,379	8,586,366	8,285,319	Trade accounts payable	15	7,405,874	7,496,947	7,564,743	8,373,235
Inventories, net	6	438,128	558,264	478,512	603,631	Taxes, charges and contributions	16	1,505,615	1,175,293	1,581,106	1,716,002
Taxes recoverable	7.1	2,128,408	2,164,544	2,172,151	2,521,292	Dividends and interest on equity	17	4,214,731	2,209,362	4,214,731	2,209,362
Judicial deposits and garnishments	8	263,895	235,343	263,928	235,343	Provisions and contingencies	18	1,008,714	894,069	1,008,714	914,377
Prepaid expenses	9	838,045	317,325	853,030	356,446	Deferred revenues	19	454,075	562,601	457,127	564,557
Dividends and interest on equity	17	18,156	18,645	-	489	Loans, financing, financial lease and contingent consideration	20	1,521,326	1,811,037	1,521,326	2,222,067
Derivative transactions	33	78,750	81,306	78,750	81,306	Debentures	20	122,343	120,924	122,343	120,924
Other assets	10	545,951	603,118	432,993	488,632	Derivative transactions	33	184,992	151,686	184,992	151,686
						Other liabilities	21	1,523,190	1,006,901	1,515,517	1,010,657
Non-current assets		83,683,674	82,387,176	83,006,119	83,775,761
Short-term investments pledged as collateral		97,626	90,863	97,636	109,864	Non-current liabilities		14,233,419	13,056,610	14,275,297	15,136,109
Trade accounts receivable, net	5	164,173	217,621	267,490	330,451	Personnel, social charges and benefits	14	27,562	19,808	27,647	19,808
Taxes recoverable	7.1	551,605	337,477	552,807	409,653	Trade accounts payable	15	67,742	-	67,742	67,742
Deferred taxes	7.2	457,372	-	609,588	711,590	Taxes, charges and contributions	16	58,695	57,416	86,033	87,018
Judicial deposits and garnishments	8	5,714,185	4,880,489	5,785,751	5,518,120	Deferred taxes	7.2	-	155,951	-	-
Prepaid expenses	9	27,909	28,632	29,697	30,609	Provisions and contingencies	18	6,242,582	5,077,839	6,270,378	5,890,319
Derivative transactions	33	179,374	417,558	179,374	417,558	Deferred revenues	19	438,553	358,963	438,589	359,237
Other assets	10	55,137	55,228	55,935	62,799	Loans, financing, financial lease and contingent consideration	20	3,553,454	3,141,987	3,553,454	4,454,509
Investments	11	1,374,295	24,342,692	87,680	101,161	Debentures	20	3,430,209	3,423,790	3,430,209	3,423,790
Property, plant and equipment, net	12	30,248,885	22,019,076	30,313,493	30,476,765	Derivative transactions	33	61,417	82,421	61,417	82,421
Intangible assets, net	13	44,813,113	29,997,540	45,026,668	45,607,191	Liabilities for post-retirement benefits plans	32	80,465	76,616	80,465	85,343
						Other liabilities	21	272,740	661,819	259,363	665,922

						Equity		68,319,766	68,567,242	68,319,766	68,567,242
						Capital	22	63,571,416	63,571,416	63,571,416	63,571,416
						Capital reserves	22	1,347,952	1,347,952	1,347,952	1,347,952
						Income Reserves	22	2,415,453	2,410,571	2,415,453	2,410,571
						Premium on acquisition of equity interest	22	(75,388)	(75,388)	(75,388)	(75,388)
						Other comprehensive income	22	(571)	25,468	(571)	25,468
						Additional dividend proposed	22	-	1,287,223	-	1,287,223
						Retained earnings	22	1,060,904	-	1,060,904	-

TOTAL ASSETS		101,259,856	97,572,695	101,547,561	101,685,064	TOTAL LIABILITIES AND EQUITY		101,259,856	97,572,695	101,547,561	101,685,064

TELEFÔNICA BRASIL S. A.
Income Statements
For the three- and six-month periods ended June 30, 2016 and 2015
(In thousands of reais)

		Company				Consolidated
		Three-month periods ended		Six-month periods ended		Three-month periods ended		Six-month periods ended
	Note	06.30.16	06.30.15	06.30.16	06.30.15	06.30.16	06.30.15	06.30.16	06.30.15

Operating revenue, net	23	9,912,641	8,414,876	18,270,754	16,836,157	10,510,049	9,962,125	20,941,445	18,945,203

Cost of sales and services	24	(5,007,150)	(4,303,895)	(9,164,401)	(8,592,857)	(5,300,261)	(5,068,448)	(10,656,903)	(9,605,288)

Gross profit		4,905,491	4,110,981	9,106,353	8,243,300	5,209,788	4,893,677	10,284,542	9,339,915

Operating income (expenses)		(3,931,561)	(3,269,175)	(6,656,268)	(6,517,559)	(3,962,778)	(3,639,509)	(7,162,299)	(6,922,113)
Selling expenses	24	(3,092,816)	(2,686,978)	(5,675,176)	(5,369,141)	(3,105,136)	(2,973,591)	(6,090,665)	(5,682,237)
General and administrative expenses	24	(680,228)	(456,692)	(1,218,879)	(877,733)	(699,367)	(531,434)	(1,314,454)	(961,254)
Other operating income	25	89,265	130,938	721,937	243,712	90,473	146,631	754,770	260,457
Other operating expenses	25	(247,782)	(256,443)	(484,150)	(514,397)	(248,748)	(281,115)	(511,950)	(539,079)

Operating income		973,930	841,806	2,450,085	1,725,741	1,247,010	1,254,168	3,122,243	2,417,802

Financial income	26	699,109	1,568,219	1,446,710	2,181,793	722,433	1,633,509	1,520,633	2,280,064
Financial expenses	26	(1,027,368)	(1,512,814)	(2,071,416)	(2,374,344)	(1,028,492)	(1,805,036)	(2,143,485)	(2,669,443)
Equity pickup	11	194,369	123,002	450,380	327,452	476	440	724	672

Income before taxes		840,040	1,020,213	2,275,759	1,860,642	941,427	1,083,081	2,500,115	2,029,095

Income and social contribution taxes	27	(140,544)	(150,397)	(358,033)	(411,107)	(241,931)	(213,265)	(582,389)	(579,560)

Net income for the period		699,496	869,816	1,917,726	1,449,535	699,496	869,816	1,917,726	1,449,535

Basic and diluted earnings per share (in R$)
Common shares	28	0.39	0.56	1.07	1.05
Preferred shares	28	0.43	0.62	1.17	1.16

TELEFÔNICA BRASIL S.A.
Statements of Changes in Shareholders’ Equity
Six-month periods ended June 30, 2016 and 2015
(In thousands of reais)
			Capital reserves		Income Reserves
	Capital	Premium on acquisition of interest	Other capital reserves	Treasury Shares	Legal reserve	Tax incentives	Reserve for expansion and modernization	Retained earnings	Additional dividend proposed	Other comprehensive income	Total Equity

Balances as of December 31, 2014	37,798,110	(70,448)	2,799,004	(112,107)	1,532,630	1,849	-	-	2,768,592	232,465	44,950,095
Additional dividends proposed for year 2014	-	-	-	-	-	-	-	-	(2,768,592)	-	(2,768,592)
Expired equity instruments	-	-	-	-	-	-	-	58,623	-	-	58,623
DIPJ (Corporate Income Tax Return) Adjustment - Tax incentives	-	-	-	-	-	1,220	-	(1,220)	-	-	-
Cancellation of treasury shares, according to EGM of March 12, 2015	-	-	(112,107)	112,107	-	-	-	-	-	-	-
Capital increase - EGM of April 28, 2015	15,812,000	-	-	-	-	-	-	-	-	-	15,812,000
Direct costs on capital increases (net of taxes), according to EGM of April 28, 2015	-	-	(62,812)	-	-	-	-	-	-	-	(62,812)
Capital increase - EGM of April 30, 2015	295,285	-	-	-	-	-	-	-	-	-	295,285
Direct costs on capital increases (net of taxes), according to EGM of April 30, 2015	-	-	(3,776)	-	-	-	-	-	-	-	(3,776)
Capital increase - merger of shares in GVTPart – EGM of May 28, 2015	9,666,021	-	(1,188,707)	-	-	-	-	-	-	-	8,477,314
Dissenters' right - Acquisition of GVTPart.	-	-	-	(86,023)	-	-	-	-	-	-	(86,023)
Other comprehensive income	-	-	-	-	-	-	-	-	-	(218,422)	(218,422)
Net income for the period	-	-	-	-	-	-	-	1,449,535	-	-	1,449,535
Interim interest on equity	-	-	-	-	-	-	-	(515,000)	-	-	(515,000)
Interim dividends	-	-	-	-	-	-	-	(270,000)	-	-	(270,000)

Balances as of June 30, 2015	63,571,416	(70,448)	1,431,602	(86,023)	1,532,630	3,069	-	721,938	-	14,043	67,118,227

Expired equity instruments	-	-	-	-	-	-	-	435,378	-	-	435,378
DIPJ (Corporate Income Tax Return) Adjustment - Tax incentives	-	-	-	-	-	3,859	-	(3,859)	-	-	-
Direct costs on capital increases (net of taxes), according to EGM of April 28, 2015	-	-	4,155	-	-	-	-	-	-	-	4,155
Dissenters' right - Acquisition of GVTPart.	-	-	-	(1,782)	-	-	-	-	-	-	(1,782)
Premium on acquisition of equity interest by TData	-	(4,940)	-	-	-	-	-	-	-	-	(4,940)
Other comprehensive income	-	-	-	-	-	-	-	264,990	-	11,425	276,415
Net income for the period	-	-	-	-	-	-	-	1,970,714	-	-	1,970,714
Income allocation:
Legal reserve	-	-	-	-	171,013	-	-	(171,013)	-	-	-
Interim interest on equity	-	-	-	-	-	-	-	(1,230,925)	-	-	(1,230,925)
Expansion and modernization reserve	-	-	-	-	-	-	700,000	(700,000)	-	-	-
Additional dividend proposed	-	-	-	-	-	-	-	(1,287,223)	1,287,223	-	-
Balances as of December 31, 2015	63,571,416	(75,388)	1,435,757	(87,805)	1,703,643	6,928	700,000	-	1,287,223	25,468	68,567,242

Additional dividends proposed for year 2015	-	-	-	-	-	-	-	-	(1,287,223)	-	(1,287,223)
Expired equity instruments	-	-	-	-	-	-	-	66,060	-	-	66,060
DIPJ (Corporate Income Tax Return) Adjustment - Tax incentives	-	-	-	-	-	4,882	-	(4,882)	-	-	-
Other comprehensive income	-	-	-	-	-	-	-	-	-	(26,039)	(26,039)
Net income for the period	-	-	-	-	-	-	-	1,917,726	-	-	1,917,726
Interim interest on equity	-	-	-	-	-	-	-	(918,000)	-	-	(918,000)
Balances as of June 30, 2016	63,571,416	(75,388)	1,435,757	(87,805)	1,703,643	11,810	700,000	1,060,904	-	(571)	68,319,766

TELEFÔNICA BRASIL S. A.
Statements of Comprehensive Income
For the three- and six-month periods ended June 30, 2016 and 2015
(In thousands of reais)

	Company				Consolidated
	Three-month periods ended		Six-month periods ended		Three-month periods ended		Six-month periods ended
	06.30.16	06.30.15	06.30.16	06.30.15	06.30.16	06.30.15	06.30.16	06.30.15

Net income for the year	699,496	869,816	1,917,726	1,449,535	699,496	869,816	1,917,726	1,449,535

Unrealized gains (losses) on investments available for sale	66	206	(172)	(783)	66	206	(172)	(783)
Taxes on unrealized gains (losses) on investments available for sale	(23)	(70)	58	266	(23)	(70)	58	266
	43	136	(114)	(517)	43	136	(114)	(517)

Gains (losses) on derivative transactions	6,141	3,206	(17,277)	(1,050)	6,141	3,321	(17,277)	(935)
Taxes on gains (losses) on derivative transactions	(2,088)	(1,090)	5,874	357	(2,088)	(1,090)	5,874	357
	4,053	2,116	(11,403)	(693)	4,053	2,231	(11,403)	(578)

Cumulative translation adjustments (CTA) on foreign currency transactions	(10,311)	423	(14,522)	5,210	(10,311)	423	(14,522)	5,210

Other net comprehensive income to be reclassified into income in subsequent periods	(6,215)	2,675	(26,039)	4,000	(6,215)	2,790	(26,039)	4,115

Gains (losses) on derivative transactions	-	(945,914)	-	(336,125)	-	(945,914)	-	(336,125)
Taxes on gains (losses) on derivative transactions	-	321,611	-	114,283	-	321,611	-	114,283
	-	(624,303)	-	(221,842)	-	(624,303)	-	(221,842)

Losses on other comprehensive income (loss)	-	-		-	-	(695)	-	(695)

Interest in comprehensive income of subsidiaries	-	(580)	-	(580)	-	-	-	-

Other net comprehensive income to be not reclassified into income in subsequent periods	-	(624,883)	-	(222,422)	-	(624,998)	-	(222,537)

Comprehensive income for the period, net of taxes	693,281	247,608	1,891,687	1,231,113	693,281	247,608	1,891,687	1,231,113

Basic and diluted earnings per share (in R$)
Common shares	0.39	0.39	1.05	0.39
Preferred shares	0.42	0.39	1.16	0.39

TELEFÔNICA BRASIL S.A.


Statements of Cash Flows
Six-month periods ended June 30, 2016 and 2015
(In thousands of *Reais*)

	Company		Consolidated
	06.30.16	06.30.15	06.30.16	06.30.15
Total cash generated from operating activities	4,070,188	2,721,001	5,040,548	3,323,699

Expenses (incomes) not representing changes in cash	6,859,295	6,117,360	8,151,367	7,297,753
Income before taxes	2,275,759	1,860,642	2,500,115	2,029,095
Depreciation and amortization	3,389,592	2,810,898	3,866,606	3,099,990
Foreign exchange gain (losses) on loans	13,739	(141,854)	13,739	81,307
Currency variations gain (losses)	239,156	163,103	229,000	171,137
Equity pick-up	(450,380)	(327,452)	(724)	(672)
Losses (gains) on write-off/disposal of property	(452,157)	21,415	(457,619)	27,987
Estimated impairment losses on accounts receivable	577,628	543,545	661,433	609,212
Provision for (reversal from) suppliers	318,334	321,637	332,457	370,073
Write-off and reversal of estimated losses from impairment and obsolescence of inventories	(19,774)	(15,061)	(20,020)	(16,034)
Pension plans and other post-retirement benefits	(4,788)	21,594	(5,544)	21,586
Provisions for tax, labor, civil and regulatory contingencies	496,186	413,793	528,127	427,796
Interest expenses	507,652	415,468	548,145	446,644
Other	(31,652)	29,632	(44,348)	29,632

Increase or decrease in operating assets and liabilities	(2,789,107)	(3,396,359)	(3,110,819)	(3,974,054)
Trade Accounts receivable	(608,191)	(664,268)	(899,519)	(757,292)
Inventories	139,910	(156,409)	145,139	(179,920)
Taxes recoverable	2,918	(100,492)	(53,673)	(104,794)
Prepaid expenses	(381,424)	(446,092)	(397,099)	(441,228)
Other current assets	31,723	6,998	18,875	(47,732)
Other non-current assets	30,565	(131,989)	7,530	(131,961)
Personnel, social charges and benefits	67,253	(141,562)	90,892	(133,789)
Trade accounts payable	(655,123)	(277,052)	(486,108)	(398,411)
Taxes, charges and contributions	(118,816)	(186,651)	30,031	(187,484)
Interest paid	(446,340)	(402,210)	(486,407)	(441,248)
Income and social contribution taxes paid	(157,831)	-	(370,109)