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Principles of Consolidation, Investments in Subsidiaries and Acquisition | 12 Months Ended
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Dec. 31, 2018
Text block [abstract] |
Principles of Consolidation, Investments in Subsidiaries and Acquisition |
3. | Principles of Consolidation, Investments in Subsidiaries and Acquisition
a. Principles of Consolidation In the preparation of the consolidated financial statements the investments of one company in another, balances of asset and liability accounts, revenues transactions, costs and expenses were eliminated, as well as the effects of transactions conducted between the companies. Non-controlling interests in subsidiaries are presented within consolidated equity and net income. Consolidation of a subsidiary begins when the parent company obtains direct or indirect control over a company and ceases when the parent company loses control of a company. Income and expenses of a subsidiary acquired are included in the consolidated profit or loss statement and other comprehensive income from the date the parent company gains the control. Income and expenses of a subsidiary, in which the parent company loses control, are included in the consolidated profit or loss statement and other comprehensive income until the date the parent company loses control. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Company’s accounting policies. b. Investments in Subsidiaries The consolidated financial statements include the following direct and indirect subsidiaries:
|  |  |  |  |  | % interest in the share |
|  |  |  |  |  | 12/31/2018 |  |  | 12/31/2017 |  |  | 12/31/2016 |
|  |  |  |  |  | Control |  |  | Control |  |  | Control |
|  | Location |  | Segment |  | Direct |  |  | Indirect |  |  | Direct |  |  | Indirect |  |  | Direct |  |  | Indirect |
Ipiranga Produtos de Petróleo S.A. |  | Brazil |  | Ipiranga |  |  | 100 |  |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |  |  |  | — |
am/pm Comestíveis Ltda. |  | Brazil |  | Ipiranga |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |
Centro de Conveniências Millennium Ltda. |  | Brazil |  | Ipiranga |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |
Icorban—Correspondente Bancário Ltda. |  | Brazil |  | Ipiranga |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |
Ipiranga Trading Limited |  | Virgin Islands |  | Ipiranga |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |
Tropical Transportes Ipiranga Ltda. |  | Brazil |  | Ipiranga |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |
Ipiranga Imobiliária Ltda. |  | Brazil |  | Ipiranga |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |
Ipiranga Logística Ltda. |  | Brazil |  | Ipiranga |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |
Oil Trading Importadora e Exportadora Ltda. |  | Brazil |  | Ipiranga |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |
Iconic Lubrificantes S.A. (see Note 3.c) |  | Brazil |  | Ipiranga |  |  | — |  |  |  | 56 |  |  |  | — |  |  |  | 56 |  |  |  | — |  |  |  | — |
Ipiranga Lubrificantes S.A. (see Note 3.c) |  | Brazil |  | Ipiranga |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |
Integra Frotas Ltda. |  | Brazil |  | Ipiranga |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |
Companhia Ultragaz S.A. |  | Brazil |  | Ultragaz |  |  | — |  |  |  | 99 |  |  |  | — |  |  |  | 99 |  |  |  | — |  |  |  | 99 |
Ultragaz Comercial Ltda. |  | Brazil |  | Ultragaz |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |
Bahiana Distribuidora de Gás Ltda. |  | Brazil |  | Ultragaz |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |
Utingás Armazenadora S.A. |  | Brazil |  | Ultragaz |  |  | — |  |  |  | 57 |  |  |  | — |  |  |  | 57 |  |  |  | — |  |  |  | 57 |
LPG International Inc. |  | Cayman Islands |  | Ultragaz |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |
Imaven Imóveis Ltda. |  | Brazil |  | Others |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |
Imifarma Produtos Farmacêuticos e Cosméticos S.A. |  | Brazil |  | Extrafarma |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |
Oxiteno S.A. Indústria e Comércio |  | Brazil |  | Oxiteno |  |  | 100 |  |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |  |  |  | — |
Oxiteno Nordeste S.A. Indústria e Comércio |  | Brazil |  | Oxiteno |  |  | — |  |  |  | 99 |  |  |  | — |  |  |  | 99 |  |  |  | — |  |  |  | 99 |
Oxiteno Argentina Sociedad de Responsabilidad Ltda. |  | Argentina |  | Oxiteno |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |
Oleoquímica Indústria e Comércio de Produtos Químicos Ltda. |  | Brazil |  | Oxiteno |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |
Oxiteno Uruguay S.A. |  | Uruguay |  | Oxiteno |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |
Oxiteno México S.A. de C.V. |  | Mexico |  | Oxiteno |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |
Oxiteno Servicios Corporativos S.A. de C.V. |  | Mexico |  | Oxiteno |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |
Oxiteno Servicios Industriales S.A. de C.V. |  | Mexico |  | Oxiteno |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |
Oxiteno USA LLC |  | United States |  | Oxiteno |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |
Global Petroleum Products Trading Corp. |  | Virgin Islands |  | Oxiteno |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |
Oxiteno Andina, C.A. |  | Venezuela |  | Oxiteno |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |
Oxiteno Europe SPRL |  | Belgium |  | Oxiteno |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |
Oxiteno Colombia S.A.S |  | Colombia |  | Oxiteno |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |
Oxiteno Shanghai LTD. |  | China |  | Oxiteno |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |
Empresa Carioca de Produtos Químicos S.A. |  | Brazil |  | Oxiteno |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |
Ultracargo—Operações Logísticas e Participações Ltda. |  | Brazil |  | Ultracargo |  |  | 100 |  |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |  |  |  | — |
Terminal Químico de Aratu S.A. – Tequimar |  | Brazil |  | Ultracargo |  |  | — |  |  |  | 99 |  |  |  | — |  |  |  | 99 |  |  |  | — |  |  |  | 99 |
TEAS – Terminal Exportador de Álcool de Santos Ltda. (see Note 3.d) |  | Brazil |  | Ultracargo |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Ultrapar International S.A. |  | Luxembourg |  | Others |  |  | 100 |  |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |  |  |  | — |
SERMA—Ass. dos usuários equip. proc. de dados |  | Brazil |  | Others |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |  |  |  | — |  |  |  | 100 |
The percentages in the table above are rounded.
c. | Association with Chevron Brasil Lubrificantes S.A.
On August 4, 2016, the Company through its subsidiary Ipiranga Produtos de Petróleo S.A. (“IPP”) entered into an association agreement with Chevron Latin America Marketing LLC and Chevron Amazonas LLC (“Chevron”) to create a new company in the lubricants market. The association is formed by Ipiranga and Chevron’s lubricants operations in Brazil. On February 2017, this transaction was approved without restrictions through an opinion issued by the General Superintendence (“SG”) of the Brazilian Antitrust Authority (“CADE”) and published in the Brazilian Federal Official Gazette. On December 1, 2017, the association was concluded, through the contribution of the subsidiary Ipiranga Lubrificantes S.A. (“IpiLubs”) to CBLSA and consequently IPP obtained direct control of CBLSA. IPP and Chevron hold 56% and 44%, respectively, of the CBLSA. The Company measured the open balance, fair value of assets and liabilities, and, consequently, the goodwill of their transaction. The Company, supported by a third party company specialized in valuations, estimated the amount for the purchase price allocation and calculated the goodwill in the amount of R$ 69,807. The goodwill is based on the synergy between the lubricant operations of CBLSA and IpiLubs. The amounts for the purchase price allocation were temporary on the date on which they were disclosed in the financial statements of December 31, 2017. In 2018, the Company calculated the definitive amounts and adjusted retrospectively to December 1, 2017 the purchase price allocation during the fourth quarter of 2018. The table below summarize the assets acquired and liabilities assumed as of the acquisition date (December 1, 2017):
Current assets |  | Temporary amount |  |  | Final amount |  |  | Adjustment |  |  | Current liabilities |  | Temporary amount |  |  | Final amount |  |  | Adjustment |
Cash and cash equivalents (1) |  |  | 73,316 |  |  |  | 73,316 |  |  |  | — |  |  | Trade payables |  |  | 33,453 |  |  |  | 33,453 |  |  |  | — |
Trade receivables |  |  | 157,016 |  |  |  | 157,016 |  |  |  | — |  |  | Salaries and related charges |  |  | 18,251 |  |  |  | 18,251 |  |  |  | — |
Inventories |  |  | 112,998 |  |  |  | 113,131 |  |  |  | 133 |  |  | Taxes payable |  |  | 20,089 |  |  |  | 20,089 |  |  |  | — |
Recoverable taxes |  |  | 5,595 |  |  |  | 5,595 |  |  |  | — |  |  | Other payables |  |  | 28,743 |  |  |  | 28,743 |  |  |  | — |
Other receivables |  |  | 15,497 |  |  |  | 15,497 |  |  |  | — |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | 364,422 |  |  |  | 364,555 |  |  |  | 133 |  |  |  |  |  | 100,536 |  |  |  | 100,536 |  |  |  | — |
Non-current assets |  |  |  |  |  |  |  |  |  |  |  |  |  | Non-current liabilities |  |  |  |  |  |  |  |  |  |  |  |
Related parties |  |  | 7,077 |  |  |  | 7,077 |  |  |  | — |  |  | Provision for tax, civil, and labor risks |  |  | 202,352 |  |  |  | 202,352 |  |  |  | — |
Indemnity asset |  |  | 202,352 |  |  |  | 202,352 |  |  |  | — |  |  | Deferred income and social contribution taxes |  |  | 3,300 |  |  |  | 48,418 |  |  |  | 45,118 |
Escrow deposits |  |  | 4,095 |  |  |  | 4,095 |  |  |  | — |  |  | Post-employment benefits |  |  | 44,478 |  |  |  | 44,478 |  |  |  | — |
Other receivables |  |  | 5,257 |  |  |  | 5,257 |  |  |  | — |  |  |  |  |  | 250,130 |  |  |  | 295,248 |  |  |  | 45,118 |
Property, plant, and equipment |  |  | 172,526 |  |  |  | 175,823 |  |  |  | 3,298 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Intangible assets |  |  | 9,944 |  |  |  | 139,215 |  |  |  | 129,270 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | 401,251 |  |  |  | 533,819 |  |  |  | 132,568 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total assets acquired |  |  | 765,673 |  |  |  | 898,374 |  |  |  | 132,701 |  |  | Total liabilities assumed |  |  | 350,666 |  |  |  | 395,784 |  |  |  | 45,118 |
Goodwill |  |  | 123,673 |  |  |  | 69,807 |  |  |  | (53,866 | ) |  | Participation of non-controlling interests |  |  | 182,603 |  |  |  | 221,139 |  |  |  | 38,536 |
Total assets acquired and goodwill |  |  | 889,346 |  |  |  | 968,181 |  |  |  | 78,835 |  |  | Consideration transferred |  |  | 356,077 |  |  |  | 351,258 |  |  |  | (4,819 | )
(1) | Includes the cash contribution from IPP.
During the process of identification of assets and liabilities, intangible assets, which were not recognized in the acquired entity’s books were also taken into account, as shown below:
|  | R$ |  |  | Useful life |  |  | Amortization method |
Commercial property rights |  |  | 114,792 |  |  |  | 39 years |  |  |  | Straight line |
Portfolio and customers’ relationship |  |  | 14,478 |  |  |  | 30 years |  |  |  | Straight line |
Total |  |  | 129,270 |  |  |  |  |  |  |  |  |
The goodwill was calculated as below:
|  | Temporary amount |  |  | Final amount |  |  | Adjustment |
Consideration transferred |  |  | 356,077 |  |  |  | 351,258 |  |  |  | 4,819 |
Total assets acquired |  |  | (765,673 | ) |  |  | (898,374 | ) |  |  | (132,701 | )
Total liabilities assumed |  |  | 350,666 |  |  |  | 395,784 |  |  |  | 45,118 |
Non-controlling interest |  |  | 182,603 |  |  |  | 221,139 |  |  |  | 38,536 |
Goodwill (see Note 14.a) |  |  | 123,673 |  |  |  | 69,807 |  |  |  | 53,866 |
For more information about the property, plant, and equipment and intangible assets acquired, see Notes 13 and 14, respectively and related to the provision for tax, civil and labor risks and indemnity assets, see Note 21.c. The following summary presents the Company’s pro forma information for 2017, as if the acquisition had been completed at the beginning of the year. The pro forma information is only presented for comparative purposes and does not purport to be indicative of what would have occurred had the acquisition actually been made at such date, nor is it necessarily indicative of future operating results:
|  | 2017 |
Net revenue from sales and services |  |  | 80,007,676 |
Operating income |  |  | 2,760,458 |
Net income for the year |  |  | 1,507,074 |
Earnings per share basic – whole R$ (see Note 31) |  |  | 1.3911 |
Earnings per share diluted – whole R$ (see Note 31) |  |  | 1.3812 |
Earnings per share were adjusted retrospectively as disclosure in Note 35. In order to simplify the corporate structure and the joining of companies with similar activities, IpiLubs was merged by CBLSA on November 1, 2018. In that same moment, the subsidiary changed its corporate name to Iconic Lubrificantes S.A. (“Iconic”). d. TEAS – Terminal Exportador de Álcool de Santos Ltda. Acquisition On January 30, 2018, the Company through its subsidiary Terminal Químico de Aratu S.A. – Tequimar (“Tequimar”) entered into a sale and purchase agreement for the acquisition of 100% of the quotas of TEAS Terminal Exportador de Álcool de Santos Ltda. (“TEAS”), owned by Raízen Energia S.A. and Raízen Araraquara Açúcar e Álcool Ltda., which were operated by the subsidiary Tequimar in the Port of Santos. The purchase price of the acquisition was R$103,373. On February 14, 2018, this transaction was approved without restrictions through an opinion issued by the SG of CADE. On March 2, 2018, CADE issued a certificate, attesting to the approval of the transaction. On March 29, 2018, the acquisition was concluded through the closing of the operation. The Company measured the open balance, fair value of assets and liabilities, and, consequently, the goodwill of their transaction. During the process of identification of assets and liabilities, intangible assets to be recognized in the acquirer entity’s books were not identified. The Company, supported by a third party company specialized in valuations, estimated the amount for the purchase price allocation and calculated the goodwill in the amount of R$ 797. The table below summarizes the assets acquired and liabilities assumed as of the acquisition date:
Current assets |  |  |  |  |  | Current liabilities |  |  |  |
Cash and cash equivalents |  |  | 3,662 |  |  | Trade payables |  |  | 14 |
Recoverable taxes |  |  | 3,830 |  |  | Contingent consideration |  |  | 2,880 |
|  |  | 7,492 |  |  |  |  |  | 2,894 |
Non-current assets |  |  |  |  |  | Non-current liabilities |  |  |  |
Deferred income and social contribution taxes |  |  | 1,054 |  |  | Provision for tax, civil, and labor risks |  |  | 141 |
Escrow deposits |  |  | 72 |  |  |  |  |  |  |
Indemnity asset |  |  | 141 |  |  |  |  |  |  |
Property, plant, and equipment |  |  | 96,852 |  |  |  |  |  |  |
|  |  | 98,119 |  |  |  |  |  | 141 |
Total assets acquired |  |  | 105,611 |  |  | Total liabilities assumed |  |  | 3,035 |
Goodwill |  |  | 797 |  |  |  |  |  |  |
Total assets acquired and goodwill |  |  | 106,408 |  |  | Consideration transferred |  |  | 103,373 |
The goodwill is was calculated as below:
Consideration transferred |  |  | 103,373 |
Total assets acquired |  |  | (105,611 | )
Total liabilities assumed |  |  | 3,035 |
Goodwill (see Note 14.a) |  |  | 797 |
For further details of property, plant, and equipment assets acquired, see Note 13. The following summary presents the Company’s pro forma information for 2018, as if the acquisition had been completed at the beginning of the year. The pro forma information is only presented for comparative purposes and does not purport to be indicative of what would have occurred had the acquisition actually been made at such date, nor is it necessarily indicative of future operating results:
|  | 2018 |
Net revenue from sales and services |  |  | 90,697,983 |
Operating income |  |  | 1,899,481 |
Net income for the year |  |  | 1,132,468 |
Earnings per share basic – whole R$ (see Note 31) |  |  | 1.0613 |
Earnings per share diluted – whole R$ (see Note 31) |  |  | 1.0543 |
Earnings per share were adjusted retrospectively as disclosure in Note 35. e. Unrealized Acquisition On November 17, 2016, the subsidiary Companhia Ultragaz S.A. (“Cia Ultragaz”), entered into a sale and purchase agreement for the acquisition of 100% of the capital stock of Liquigás Distribuidora S.A (“Liquigás”) for the amount of R$ 2,665 million, subject to update by the Interbank Certificate of Deposit (“CDI”). On February 28, 2018, the Court of Appeals of CADE voted the transaction and, despite all the efforts endeavored by the applicants, decided to reject the transaction. Due to the non-closing of the transaction, on March 9, 2018, Cia. Ultragaz paid a contractual fine of R$ 286,160 in favor of Petróleo Brasileiro S.A. – Petrobras (“Petrobras”), see Note 29.

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