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Note 21 - Changes in Equity | 12 Months Ended
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Dec. 31, 2018
Statement Line Items [Line Items] |
Disclosure of changes in equity [text block] |
21. | CHANGES IN EQUITY
(a) Capital stock
|  |  |  |  |  |  | 2018 |  |  |  |  |  |  |  | 2017 |
|  |  | Million of common shares |  |  |  | Million of Real |  |  |  | Million of common shares |  |  |  | Million of Real |
Beginning balance as per statutory books |  |  | 15,717.6 |  |  |  | 57,614.1 |  |  |  | 15,717.6 |  |  |  | 57,614.1 |
Share issued |  |  | 4.5 |  |  |  | 96.1 |  |  |  | – |  |  |  | – |
|  |  | 15,722.1 |  |  |  | 57,710.2 |  |  |  | 15,717.6 |  |  |  | 57,614.1 |
(b) Capital reserves
|  | Capital Reserves |  |
|  |  | Treasury shares |  |  |  | Share Premium |  |  |  | Others capital reserves |  |  |  | Share-based Payments |  |  |  | Total |
At December 31, 2016 |  |  | (908.7 | ) |  |  | 53,662.8 |  |  |  | 700.9 |  |  |  | 1,074.9 |  |  |  | 54,529.9 |
Purchase of shares and result on treasury shares |  |  | 13.7 |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 13.7 |
Share-based payments |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 157.4 |  |  |  | 157.4 |
At December 31, 2017 |  |  | (895.0 | ) |  |  | 53,662.8 |  |  |  | 700.9 |  |  |  | 1,232.3 |  |  |  | 54,701.0 |
Capital Increase |  |  | – |  |  |  | – |  |  |  | – |  |  |  | (89.9 | ) |  |  | (89.9 | )
Effect of application of IAS 29 (hyperinflation) (i) |  |  | – |  |  |  | – |  |  |  | – |  |  |  | (8.2 | ) |  |  | (8.2 | )
Purchase of shares and result on treasury shares |  |  | 12.3 |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 12.3 |
Share-based payments |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 166.1 |  |  |  | 166.1 |
At December 31, 2018 |  |  | (882.7 | ) |  |  | 53,662.8 |  |  |  | 700.9 |  |  |  | 1,300.3 |  |  |  | 54,781.3 |
(i) As described in Note 1 (b) Application of inflation accounting and Financial Reporting in Hyperinflationary Economies . ( b.1 ) Purchase of shares and result of treasury shares The treasury shares comprise own issued shares reacquired by the Company and the result on treasury shares that refers to gains and losses related to share-based payments transactions and others. Follows the changes of treasury shares:
|  |  | Acquire /realization shares |  |  |  | Result on Treasure Shares |  |  |  | Total Treasure Shares |
|  |  | Million shares |  |  |  | Million Brazilian Real |  |  |  | Million shares |  |  |  | Million Brazilian Real |
At December 31, 2016 |  |  | 16.6 |  |  |  | (312.7 | ) |  |  | (596.0 | ) |  |  | (908.7 | )
Changes during the year |  |  | (9.1 | ) |  |  | 173.0 |  |  |  | (159.3 | ) |  |  | 13.7 |
At December 31, 2017 |  |  | 7.5 |  |  |  | (139.7 | ) |  |  | (755.3 | ) |  |  | (895.0 | )
Changes during the year |  |  | (6.4 | ) |  |  | 118.8 |  |  |  | (106.5 | ) |  |  | 12.3 |
At December 31, 2018 |  |  | 1.1 |  |  |  | (20.9 | ) |  |  | (861.8 | ) |  |  | (882.7 | )
( b.2 ) Share premium The share premium refers to the difference between subscription price that the shareholders paid for the shares and theirs nominal value. Since this is a capital reserve, it can only be used to increase capital, offset losses, redemptions, reimbursement or repurchase shares. ( b.3 ) Share-based payment Different share-based payment programs and stock purchase option plans allow the senior management from Ambev economic group acquire shares of the Company. The share-based payment reserve recorded a charge of R$161.0 in December 31, 2018 ( R$209.3 and R$170.3 in December 31, 2017 and 2016, respectively) (Note 24 – Share-based payments ). (c) Net income reserves
|  | Net income reserves
|  |  | Investments reserve |  |  |  | Statutory reserve |  |  |  | Fiscal incentive |  |  |  | Total |
At December 31, 2016 |  |  | 3,859.9 |  |  |  | 4.5 |  |  |  | 5,835.7 |  |  |  | 9,700.1 |
Interest on shareholder´s equity |  |  | (3,770.1 | ) |  |  | – |  |  |  | – |  |  |  | (3,770.1 | )
Fiscal incentive reserve |  |  | – |  |  |  | – |  |  |  | 1,552.3 |  |  |  | 1,552.3 |
Investments reserve |  |  | 1,177.9 |  |  |  | – |  |  |  | – |  |  |  | 1,177.9 |
At December 31, 2017 |  |  | 1,267.7 |  |  |  | 4.5 |  |  |  | 7,388.0 |  |  |  | 8,660.2 |
Interest on shareholder´s equity |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |
Fiscal incentive reserve |  |  | – |  |  |  | – |  |  |  | 1,331.5 |  |  |  | 1,331.5 |
Investments reserve |  |  | 5,442.3 |  |  |  | – |  |  |  | – |  |  |  | 5,442.3 |
At December 31, 2018 |  |  | 6,710.0 |  |  |  | 4.5 |  |  |  | 8,719.5 |  |  |  | 15,434.0 |
( c.1 ) Investments reserve From net income after deductions applicable, will be aimed no more than 60 % ( sixty per cent) of the adjusted net profit to investment reserve so that it can support future investments. ( c.2 ) Statutory reserve From net income, 5 % will be applied before any other allocation, to the statutory reserve, which cannot exceed 20 % of capital stock. The Company is not required to supplement the statutory reserve in the year when the balance of this reserve, plus the amount of capital reserves, exceeds 30 % of the capital stock. ( c.3 ) Tax incentives The Company has tax incentives framed in certain state and federal industrial development programs in the form of financing, deferred payment of taxes or partial reductions of the amount due. These programs aim to promote the expansion of employment generation, regional decentralization, complement and diversify the industrial base of the States. In these states, the grace periods, enjoyment and reductions are permitted under the tax law. ( c.4 ) Interest on shareholders’ equity / Dividends Brazilian companies are permitted to distribute interest attributed to shareholders’ equity calculated based on the long-term interest rate (TJLP), such interest being tax-deductible, in accordance with the applicable law and, when distributed, may be considered part of the minimum mandatory dividends. As determined by its By-laws, the Company is required to distribute to its shareholders, as a minimum mandatory dividend in respect of each fiscal year ending on December 31, an amount not less than 40 % of its net income determined under Brazilian law, as adjusted in accordance with applicable law, unless payment of such amount would be incompatible with Ambev’s financial situation. The minimum mandatory dividend includes amounts paid as interest on shareholders’ equity. Events during the year ended 2018:
Event |  |  | Approval |  |  | Type |  |  | Date of payment |  |  |  | Year |  |  |  | Type of share |  |  |  | Amount per share |  |  |  | Total amount |
Board of Directors Meeting |  |  | 05/15/2018 |  |  | Dividends |  |  | 07/30/2018 |  |  |  | 2018 |  |  |  | ON |  |  |  | 0.1600 |  |  |  | 2,515.1 |
Board of Directors Meeting |  |  | 12/03/2018 |  |  | Interest on shareholder´s equity |  |  | 12/28/2018 |  |  |  | 2018 |  |  |  | ON |  |  |  | 0.3200 |  |  |  | 5,030.5 |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 7,545.6 |
Events during the year ended 2017:
Event |  |  | Approval |  |  | Type |  |  | Date of payment |  |  |  | Year |  |  |  | Type of share |  |  |  | Amount per share |  |  |  | Total amount |
Board of Directors Meeting |  |  | 05/16/2017 |  |  | Dividends |  |  | 07/17/2017 |  |  |  | 2017 |  |  |  | ON |  |  |  | 0.1600 |  |  |  | 2,513.1 |
Board of Directors Meeting |  |  | 12/01/2017 |  |  | Interest on shareholder´s equity |  |  | 12/28/2017 |  |  |  | 2017 |  |  |  | ON |  |  |  | 0.3100 |  |  |  | 4,869.7 | (i)
Board of Directors Meeting |  |  | 12/21/2017 |  |  | Dividends |  |  | 02/22/2018 |  |  |  | 2017 |  |  |  | ON |  |  |  | 0.0700 |  |  |  | 1,099.7 |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 8,482.5 |
(i) R$3,770.1 of these interest on shareholder´s equity refer to the total amount approved for distribution in the period, and were accrued in investments reserves. Events during the year ended 2016:
Event |  |  | Approval |  |  | Type |  |  | Date of payment |  |  |  | Year |  |  |  | Type of share |  |  |  | Amount per share |  |  |  | Total amount |
Board of Directors Meeting |  |  | 01/15/2016 |  |  | Interest on shareholder´s equity |  |  | 02/29/2016 |  |  |  | 2015 |  |  |  | ON |  |  |  | 0.1300 |  |  |  | 2,039.2 |
Board of Directors Meeting |  |  | 06/24/2016 |  |  | Dividends |  |  | 07/29/2016 |  |  |  | 2016 |  |  |  | ON |  |  |  | 0.1300 |  |  |  | 2,040.8 |
Board of Directors Meeting |  |  | 10/19/2016 |  |  | Dividends |  |  | 11/25/2016 |  |  |  | 2016 |  |  |  | ON |  |  |  | 0.1600 |  |  |  | 2,511.9 |
Board of Directors Meeting |  |  | 12/01/2016 |  |  | Interest on shareholder´s equity |  |  | 12/29/2016 |  |  |  | 2016 |  |  |  | ON |  |  |  | 0.2200 |  |  |  | 3,454.2 |
Board of Directors Meeting |  |  | 12/22/2016 |  |  | Dividends |  |  | 02/23/2017 |  |  |  | 2016 |  |  |  | ON |  |  |  | 0.0700 |  |  |  | 1,099.1 |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 11,145.2 |
(d) Carrying value adjustments
|  | Carrying value adjustments |  |
|  |  | Translation reserves |  |  |  | Cash flow hedge |  |  |  | Actuarial gains/ (losses) |  |  |  | Options granted on subsidiary |  |  |  | Gains/(losses) of non-controlling interest´s share |  |  |  | Business combination |  |  |  | Accounting adjustments for transactions between shareholders |  |  |  | Total |
At December 31, 2016 |  |  | (289.5 | ) |  |  | (144.5 | ) |  |  | (1,262.2 | ) |  |  | (2,390.9 | ) |  |  | 2,150.7 |  |  |  | 156.1 |  |  |  | (75,238.8 | ) |  |  | (77,019.1 | )
Comprehensive income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gains/(losses) on translation of foreign operations |  |  | 1,928.6 |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 1,928.6 |
Cash flow hedges |  |  | – |  |  |  | 513.4 |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 513.4 |
Actuarial gains/(losses) |  |  | – |  |  |  | – |  |  |  | 117.7 |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 117.7 |
Total Comprehensive income |  |  | 1,928.6 |  |  |  | 513.4 |  |  |  | 117.7 |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 2,559.7 |
Options granted on subsidiary |  |  | – |  |  |  | – |  |  |  | – |  |  |  | (380.4 | ) |  |  | – |  |  |  | – |  |  |  | – |  |  |  | (380.4 | )
Gains/(losses) of controlling interest´s share |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | (12.1 | ) |  |  | – |  |  |  | – |  |  |  | (12.1 | )
Tax on fictitious dividends |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | (38.7 | ) |  |  | – |  |  |  | – |  |  |  | (38.7 | )
Reversal effect revaluation of property, plant and equipment under the predecessor basis accounting |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | (75.9 | ) |  |  | (75.9 | )
At December 31, 2017 |  |  | 1,639.1 |  |  |  | 368.9 |  |  |  | (1,144.5 | ) |  |  | (2,771.3 | ) |  |  | 2,099.9 |  |  |  | 156.1 |  |  |  | (75,314.7 | ) |  |  | (74,966.5 | )
Comprehensive income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gains/(losses) on translation of foreign operations |  |  | 1,643.5 |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 1,643.5 |
Cash flow hedges |  |  | – |  |  |  | 495.9 |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 495.9 |
Actuarial gains/(losses) |  |  | – |  |  |  | – |  |  |  | 24.8 |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 24.8 |
Total Comprehensive income |  |  | 1,643.5 |  |  |  | 495.9 |  |  |  | 24.8 |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 2,164.2 |
Effect of application of IAS 29 (hyperinflation) (i) |  |  | 346.4 |  |  |  | (88.3 | ) |  |  | 0.1 |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 258.2 |
Gains/(losses) of controlling interest´s share (ii) |  |  | 460.1 |  |  |  | 0.8 |  |  |  | 3.4 |  |  |  | 2,651.1 |  |  |  | (2,072.9 | ) |  |  | – |  |  |  | – |  |  |  | 1,042.5 |
Tax on fictitious dividends |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | (7.4 | ) |  |  | – |  |  |  | – |  |  |  | (7.4 | )
Reversal effect revaluation of property, plant and equipment under the predecessor basis accounting |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | (75.9 | ) |  |  | (75.9 | )
At December 31, 2018 |  |  | 4,089.1 |  |  |  | 777.3 |  |  |  | (1,116.2 | ) |  |  | (120.2 | ) |  |  | 19.6 |  |  |  | 156.1 |  |  |  | (75,390.6 | ) |  |  | (71,584.9 | )
(i) As described in Note 1 (b) Application of inflation accounting and Financial Reporting in Hyperinflationary Economies . (ii) Of these amount, R$1,035.2 refers to renegotiation of shareholders agreement from Tenedora, as described in Note 1 (b) . ( d.1 ) Translation reserves The translation reserves comprise all foreign currency exchange differences arising from the translation of the financial statements with functional currency different from the Real. The translation reserves also comprise the portion of the gain or loss on the foreign currency liabilities and on the derivative financial instruments determined to be effective net investment hedges. ( d.2 ) Cash flow hedge reserves The hedging reserves comprise the effective portion of the cumulative net change in the fair value of cash flow hedges to the extent the hedged risk has not yet impacted profit or loss (For additional information, see Note 27 – Financial instruments and risks) . ( d.3 ) Actuarial gains and losses The actuarial gains and losses include expectations with regards to the future pension plans obligations. Consequently, the results of actuarial gains and losses are recognized on timely basis considering best estimate obtained by Management. Accordingly, the Company recognizes on monthly basis the results of these estimated actuarial gains and losses based on the expectations presented in the independent actuarial report. The actuarial gain of R$158.5 in 2017 arising from the surplus reverted to the Sponsor, originating from Ambev Private Pension Institute of the defined benefits plan was fully recorded under the heading of actuarial gains and losses in equity. ( d.4 ) Options granted on subsidiary As part of the shareholders agreement between the Ambev and ELJ, an option to sell (“put”) was issued by Ambev in favor of E. León Jimenes, S.A. (“ELJ”) and an option to purchase (“call”) was issued by ELJ in favor of Ambev, which may result in an acquisition by Ambev of the remaining shares of Tenedora, for a value based on EBITDA, discounted of net debt, from operations, being put exercisable at any time. As disclosed in Note 1 – Corporate information , on January 18, 2018, the ELJ exercised partially its put option related to approximately 30% of capital stock by Tenedora. Due to the partial exercise of put option, the Company became the owner of approximately 85% of Tenedora. Additionally, was approved the change of the call option term from 2019 to 2022. On December 31, 2018 the put option held by ELJ is valued at R$2,449.3 ( R$5,520.2 on December 31, 2017) and the liability categorized as “Level 3”, as the Note 27 (b) and in accordance with the IFRS 3. No value has been assigned to the call option held by the Company. The fair value of this consideration deferred was calculated by using standard valuation techniques (present value of the principal amount and future interest rates, discounted by the market rate). The criteria used are based on market information and from reliable sources and the fair value is revaluated on an annual basis. As part of the agreement to acquire the shares of Sucos do Bem, a put option and a call option on minority shareholders' participation determined by gross revenue of its products and exercisable from 2020 has been granted, with a few exceptions. On December 31, 2018 the put option is valued at R$136.0 ( R$132.0 on December 31, 2017). The changes in these options is presented in Note 27 – Financial instruments and risks . ( d.5 ) Accounting for acquisition of non-controlling interests In transactions with non-controlling interests of the same business, even when performed at arm's length terms, that present valid economic grounds and reflect normal market conditions, will be consolidated by the applicable accounting standards as occurred within the same accounting entity. As determined by IFRS 10, any difference between the amount paid (fair value) for the acquisition of non-controlling interests and are related to carrying amount of such non-controlling interest shall be recognized directly in controlling shareholders’ equity. The acquisition of non-controlling interest related to Old Ambev, the above mentioned adjustment was recognized in the Carrying value adjustments when applicable, due to the adoption of the predecessor basis of accounting. (e) Earnings per share Basic and diluted earnings per share of the stock option and deferred stock The calculation of basic earnings per share is based on the net income attributable to equity holders of Ambev and the proportional weighted average number of shares outstanding during the year. Diluted earnings per share of the stock option and deferred stock is based on the net income attributable to equity holders of Ambev and the adjusting the weighted average number of shares outstanding during the year to assume conversion of all potentially dilutive shares, as follows:
Million shares |  | 2018 |  | 2017 |  | 2016
|  | Common |  | Common |  | Common
Issued shares at December 31, net of treasury shares (i) |  |  | 15,718.1 |  |  |  | 15,705.8 |  |  |  | 15,696.6 |
Effect of shares options |  |  | 138.1 |  |  |  | 132.2 |  |  |  | 126.5 |
Weighted average number of shares (diluted) at December 31 |  |  | 15,856.2 |  |  |  | 15,838.0 |  |  |  | 15,823.1 |
(i) Not considered treasury shares. The tables below present the calculation of earnings per share (“EPS”):
|  | 2018 |  | 2017 |  | 2016
|  | Common |  | Common |  | Common
Income attributable to equity holders of Ambev |  |  | 11,024.7 |  |  |  | 7,332.0 |  |  |  | 12,546.6 |
Weighted average number of shares (non diluted) |  |  | 15,718.1 |  |  |  | 15,705.8 |  |  |  | 15,696.6 |
Basic EPS (i) |  |  | 0.7014 |  |  |  | 0.4668 |  |  |  | 0.7993 |
Income attributable to equity holders of Ambev |  |  | 11,024.7 |  |  |  | 7,332.0 |  |  |  | 12,546.6 |
Weighted average numbers of shares (diluted) |  |  | 15,856.2 |  |  |  | 15,838.1 |  |  |  | 15,823.2 |
Diluted EPS (i) |  |  | 0.6953 |  |  |  | 0.4629 |  |  |  | 0.7929 |
(i) Expressed in Brazilian Reais. (f) Destinations At December 31, 2018, the Company has done the appropriations to retained earnings, in accordance with the Brazilian Corporate law and the Company’s bylaws. The dividends payments made until December 2018 were approved at the Board of Directors’ Meeting. Regarding the basis for dividends, the Company believes that the predecessor basis of accounting, as well as its presentation for comparative purposes, will not affect the determination of the minimum mandatory dividend. Therefore, the Company intends to adjust the calculation basis of the minimum mandatory dividend to delete any current and future impacts on net income resulting from the adoption of this accounting practice, related to the amortization/depreciation of surplus assets or even a possible impairment of goodwill, thus preserving the mandatory minimum dividends.
|  |  | 2018 |  |  |  | 2017 |  |  |  | 2016 |
Net income, attributable to equity holders of Ambev |  |  | 11,024.7 |  |  |  | 7,332.0 |  |  |  | 12,546.6 |
Prescribed/(complement) dividends |  |  | 30.1 |  |  |  | 34.7 |  |  |  | 21.6 |
Reversal effect revaluation of property, plant and equipment under the predecessor basis accounting |  |  | 75.9 |  |  |  | 75.9 |  |  |  | 75.9 |
Impact of the adoption of IFRS 15 (i) |  |  | (355.4 | ) |  |  | – |  |  |  | – |
Effect of application of IAS 29 (hyperinflation) (ii) |  |  | 3,544.1 |  |  |  | – |  |  |  | – |
Retained earnings basis for dividends and destinations to Net income reserves |  |  | 14,319.4 |  |  |  | 7,442.6 |  |  |  | 12,644.1 |
Dividends and Interest on capital distributed and accrued to distribute based on net income for the year |  |  |  |  |  |  |  |  |  |  |  |
Dividends and Interest on capital paid based on profit |  |  | 7,545.6 |  |  |  | 3,612.7 |  |  |  | 5,651.8 |
Dividends approved for distribution |  |  | – |  |  |  | 1,099.7 |  |  |  | 3,454.2 |
Total of dividends and Interest on capital |  |  | 7,545.6 |  |  |  | 4,712.4 |  |  |  | 9,106.0 |
Percentage of distributed profit |  |  | 53 | % |  |  | 63 | % |  |  | 72 | %
Interest on capital distributed and accrued to distribute based on the investment reserve |  |  |  |  |  |  |  |  |  |  |  |
Interest on capital paid based on the investment reserve |  |  | – |  |  |  | 3,770.1 |  |  |  | – |
Total of Interest on capital |  |  | – |  |  |  | 3,770.1 |  |  |  | – |
Total of distributed and accrued to distribute |  |  | 7,545.6 |  |  |  | 8,482.5 |  |  |  | 9,106.0 |
Percentage of distributed profit |  |  | 53 | % |  |  | 114 | % |  |  | 72 | %
(i) As described in Note 3 - Summary of significant account policies. (ii) As described in Note 1 (b) Application of inflation accounting and Financial Reporting in Hyperinflationary Economies .

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