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Assets and liabilities from subsidiaries held for sale and discontinued operations | 12 Months Ended
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Dec. 31, 2021
Assets and liabilities from subsidiaries held for sale and discontinued operations |
Assets and liabilities from subsidiaries held for sale and discontinued operations | # 3. Assets and liabilities from subsidiaries held for sale and discontinued operations The divestments of Oxiteno and Extrafarma are aligned with Ultrapar’s portfolio review. With a more complementary and synergistic businesses, Ultrapar concludes the rationalization phase of its portfolio and will now concentrate on developing investment opportunities in the verticals of energy and infrastructure, with increasing focus on energy transition, leveraged by its portfolio and expertise. In the context, the Company announced the contracts signings described below and, as of December 31, 2021, classified these transactions as assets and liabilities held for sale and discontinued operations. The Company recognizes deferred taxes for the difference between the carrying amount of the net assets of a subsidiary that is classified as discontinued operation and the tax base of the investment. The related deferred tax expense or benefit is allocated to discontinued operations. a. Extrafarma share sale and purchase agreement and other agreements On May 18, 2021 the Company announced the signing of a share purchase agreement for the sale of all shares of Extrafarma held by subsidiary IPP to Empreendimentos Pague Menos S.A. (“Pague Menos”). The total sale price is R$ 700 million, subject to adjustments due mainly to changes in working capital and Extrafarma's net debt position on the closing date of the transaction. The transaction will be settled in three installments as follows: 50% on the closing date and 25% on each the first and the second anniversary of the closing date, monetarily updated by the Interbank Deposits Interest Rate (“DI”) rate + 0.5% p.a., with a guarantee will be provided by a shareholder of the Pague Menos for the last two installments. The completion of this transaction is subject to usual conditions precedent in such deals, including approval by the Brazilian antitrust authority and by the general shareholders’ meeting of Pague Menos, pursuant to the terms of article 256 of the Brazilian Corporate Law, which was already held by the purchasing company. Furthermore, preemptive rights were granted to Company's shareholders who wished to acquire Extrafarma's shares, proportionally to their respective participation in the Company's share capital and for the same price per share to be paid by Pague Menos, pursuant to article 253 of the Brazilian Corporate Law. The shareholders of the Company that exercised such right will become direct shareholders of Extrafarma after closing of the transaction. The company held a general shareholders’ meeting on June 25, 2021 in which was formalized the offering of the aforementioned preemptive rights, detailing the procedures for its exercise, as applicable. The exercise period ended on July 29, 2021 and the total exercised was less than 1% of the Company's capital. On February 11, 2022, the Administrative Council for Economic Defense ("CADE") issued an order declaring the Concentration Act no. 08700.005053/2021-74 regarding the acquisition of Extrafarma by Pague Menos. This declaration of complexity is a regular phase within the normal manner for concentration acts whose analysis by CADE needs further investigation. The companies continue to work with CADE in a transparent manner to provide all necessary clarifications. Extrafarma and Pague Menos will maintain their regular course of business, on an independent manner, until the closing date of the transaction. On December 31, 2021, the Company recorded an impairment in the amount of R$ 282,169, net of the effects of deferred income and social contribution taxes, as allocated below:
| Amount |
Goodwill | 68,273 |
Residual surplus value of fixed assets | 160 |
Intangibles assets arising from business combination | 76,136 |
Property, plant, and equipment | 60,548 |
Right-of-use assets | 38,957 |
Recoverable taxes | 183,455 |
Impairment | 427,529 |
Deferred income and social contribution taxes | (145,360 | )
Net impairment | 282,169 |
b. Oxiteno S.A. share purchase and sale agreement On August 16, 2021, the Company announced the signing of a share purchase agreement for the sale of all shares of Oxiteno S.A. – Indústria e Comércio (“Oxiteno S.A.”) to Indorama Ventures PLC (“Indorama”). For further information, see Note 1.c. c. Disclosure of the impacts of IFRS 5 – Assets and liabilities held for sale and d iscontinued operations The tables of assets and liabilities held for sale and discontinued operation are detailed below and include the financial position and profit or loss incurred throughout 2021 and 2020, when applicable. Eliminations refer to intercompany transactions, substantially represented by purchase and sale transactions, effects on the profit or loss of foreign debts contemplating hedging instruments, investments in associates that are not part of the sales transaction, among others. c.1 The main classes of assets and liabilities classified as held for sale on December 31, 2021 are shown below:
Assets | Oxiteno |  |  | Extrafarma |  |  | Eliminations (*) |  |  | Total |
Current assets |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents | 334,882 |  |  | 53,099 |  |  | ‐ |  |  | 387,981 |
Financial investments and hedging instruments | 1,346,552 |  |  | ‐ |  |  | ‐ |  |  | 1,346,552 |
Trade receivables | 993,960 |  |  | 35,743 |  |  | ‐ |  |  | 1,029,703 |
Inventories | 1,671,662 |  |  | 578,206 |  |  | ‐ |  |  | 2,249,868 |
Recoverable taxes | 634,718 |  |  | 62,053 |  |  | ‐ |  |  | 696,771 |
Other assets | 51,829 |  |  | 26,145 |  |  | (5,035 | ) |  | 72,939 |
Total current assets | 5,033,603 |  |  | 755,246 |  |  | (5,035 | ) |  | 5,783,814 |
Non-current assets |  |  |  |  |  |  |  |  |  |  |
Financial investments and hedging instruments | 492,430 |  |  | ‐ |  |  | ‐ |  |  | 492,430 |
Related parties | ‐ |  |  | 1,674 |  |  | (1,674 | ) |  | ‐ |
Deferred income and social contribution taxes | 541,756 |  |  | 200,194 |  |  | ‐ |  |  | 741,950 |
Recoverable taxes | 393,723 |  |  | 17,938 |  |  | ‐ |  |  | 411,661 |
Other assets | 10,538 |  |  | 4,136 |  |  | ‐ |  |  | 14,674 |
| 1,438,447 |  |  | 223,942 |  |  | (1,674 | ) |  | 1,660,715 |
Investments | 36,207 |  |  | 5,000 |  |  | (22,047 | ) |  | 19,160 |
Right-of-use assets, net | 31,871 |  |  | 318,183 |  |  | ‐ |  |  | 350,054 |
Property, plant, and equipment | 2,787,241 |  |  | 154,663 |  |  | ‐ |  |  | 2,941,904 |
Intangible assets | 160,141 |  |  | 85,129 |  |  | ‐ |  |  | 245,270 |
Total non-current assets | 4,453,907 |  |  | 786,917 |  |  | (23,721 | ) |  | 5,217,103 |
Total assets held for sale | 9,487,510 |  |  | 1,542,163 |  |  | (28,756 | ) |  | 11,000,917 |
(*) Balances and transactions between the discontinued and continuing operations have been eliminated, mainly related to loans.
Liabilities | Oxiteno |  |  | Extrafarma |  |  | Eliminations (*) |  |  | Total |
Current liabilities |  |  |  |  |  |  |  |  |  |  |
Loans, financing and hedge derivative financial instruments | 302,154 |  |  | ‐ |  |  | (62,841 | ) |  | 239,313 |
Trade payables | 493,800 |  |  | 225,487 |  |  | (1,949 | ) |  | 717,338 |
Trade payables – reverse factoring | 725,246 |  |  | - |  |  | - |  |  | 725,246 |
Salaries and related charges | 176,941 |  |  | 45,843 |  |  | - |  |  | 222,784 |
Taxes payables | 53,988 |  |  | 15,696 |  |  | - |  |  | 69,684 |
Income and social contribution taxes payable | 12,415 |  |  | ‐ |  |  | ‐ |  |  | 12,415 |
Post-employment benefits | 3,311 |  |  | - |  |  | - |  |  | 3,311 |
Provision for tax, civil, and labor risks | 2,946 |  |  | 520 |  |  | - |  |  | 3,466 |
Leases payable | 11,702 |  |  | 64,312 |  |  | - |  |  | 76,014 |
Other liabilities | 68,721 |  |  | 13,249 |  |  | (13,264 | ) |  | 68,706 |
Total current liabilities | 1,851,224 |  |  | 365,107 |  |  | (78,054 | ) |  | 2,138,277 |
Non-current liabilities |  |  |  |  |  |  |  |  |  |  |
Loans, financing and hedge derivative financial instruments | 5,728,028 |  |  | ‐ |  |  | (5,725,594 | ) |  | 2,434 |
Related parties | 2,875 |  |  | ‐ |  |  | (2,875 | ) |  | ‐ |
Deferred income and social contribution taxes | 12,964 |  |  | ‐ |  |  | ‐ |  |  | 12,964 |
Post-employment benefits | 6,806 |  |  | 287 |  |  | - |  |  | 7,093 |
Provision for tax, civil, and labor risks | 33,149 |  |  | 2,370 |  |  | - |  |  | 35,519 |
Leases payable | 22,786 |  |  | 314,915 |  |  | - |  |  | 337,701 |
Other liabilities | 5,341 |  |  | 2,092 |  |  | - |  |  | 7,433 |
Total non-current liabilities | 5,811,949 |  |  | 319,664 |  |  | (5,728,469 | ) |  | 403,144 |
Total equity | 1,824,337 |  |  | 857,392 |  |  | (2,681,729 | ) |  | - |
Total liabilities held for sale and equity | 9,487,510 |  |  | 1,542,163 |  |  | (8,488,252 | ) |  | 2,541,421 |
(*) Balances and transactions between the discontinued and continuing operations have been eliminated, mainly related to loans. c.2 The results for the year and cash flows from discontinued operations as of December 31, 2021 are shown below:
| Oxiteno |  |  | Extrafarma |  |  | Eliminations (*) |  |  | Total |
Net revenue from sales and services | 7,102,771 |  |  | 1,986,932 |  |  | (23,908 | ) |  | 9,065,795 |
Cost of products and services sold | (5,540,773 | ) |  | (1,384,316 | ) |  | 23,908 |  |  | (6,901,181 | )
Gross profit | 1,561,998 |  |  | 602,616 |  |  | ‐ |  |  | 2,164,614 |
Operating income (expenses) |  |  |  |  |  |  |  |  |  |  |
Selling marketing and administrative | (978,221) |  |  | (685,794 | ) |  | ‐ |  |  | (1,664,015 | )
Impairment | ‐ |  |  | (427,529 | ) |  | ‐ |  |  | (427,529 | )
Other operating income, net | 26,924 |  |  | (1,109 | ) |  | ‐ |  |  | 25,815 |
Operating income (loss) before finance income (expenses) and share of profit of associates | 610,701 |  |  | (511,816 | ) |  | ‐ |  |  | 98,885 |
Share of profit of associates | 48 |  |  | ‐ |  |  | - |  |  | 48 |
Operating income (loss) before finance income (expenses) and income and social contribution taxes | 610,749 |  |  | (511,816 | ) |  | - |  |  | 98,933 |
Financial result, net | (431,441 | ) |  | (45,265 | ) |  | 329,736 |  |  | (146,970 | )
Profit (loss) before income and social contribution taxes | 179,308 |  |  | (557,081 | ) |  | 329,736 |  |  | (48,037 | )
Income and social contribution taxes | 69,995 |  |  | 155,416 |  |  | (112,110 | ) |  | 113,301 |
Profit (loss) for the year | 249,303 |  |  | (401,665 | ) |  | 217,626 |  |  | 65,264 |
Deprecia tion and amortiza tion for the year (i) | 308,564 |  |  | 154,850 |  |  | - |  |  | 463,414 |
(*) Elimination between continuing and discontinued operations related to the intercompany loan (PPE) between Ultrapar International and Oxiteno. (i) Balances included for complete breakdown of segment information.
| Oxiteno |  |  | Extrafarma |  |  | Eliminations |  |  | Total |
Net cash provided by (used in) operating activities | 1,016,580 |  |  | (33,273 | ) |  | (788 | ) |  | 982,519 |
Net cash used in investing activities | (122,363 | ) |  | (35,072 | ) |  | (1,298 | ) |  | (158,733 | )
Net cash provided by (used in) financing activities | (1,054,930 | ) |  | 35,286 |  |  | 466,677 |  |  | (552,967 | )
Effect of exchange rate changes on cash and cash equivalents in foreign currency | 56,553 |  |  | ‐ |  |  | ‐ |  |  | 56,553 |
(Decrease) increase in cash and cash equivalents | (104,160 | ) |  | (33,059 | ) |  | 464,591 |  |  | 327,372 |
c.3 The results for the year and cash flows from discontinued operations as of December 31, 2020 are shown below:
| 12/31/2020 |  |  | Discontinued operations |  |  | 12/31/2020 |
| Disclosed |  |  | Oxiteno |  |  | Extrafarma |  |  | Eliminations |  |  | Total |  |  | Re-Restated |
Net revenue from sales and services | 81,241,102 |  |  | 5,210,704 |  |  | 1,988,411 |  |  | (16,069 | ) |  | 7,183,046 |  |  | 74,058,056 |
Cost of products and services sold | (75,628,214 | ) |  | (4,188,711 | ) |  | (1,399,125 | ) |  | 16,069 |  |  | (5,571,767 | ) |  | (70,056,447 | )
Gross profit | 5,612,888 |  |  | 1,021,993 |  |  | 589,286 |  |  | ‐ |  |  | 1,611,279 |  |  | 4,001,609 |
Operating income (expenses) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Selling marketing and administrative | (4,098,377 | ) |  | (831,056 | ) |  | (662,182 | ) |  | - |  |  | (1,493,238 | ) |  | (2,605,139 | )
Other operating income, net | 297,544 |  |  | 153,457 |  |  | (5,403 | ) |  | - |  |  | 148,054 |  |  | 149,490 |
Operating income (loss) before finance income (expenses) and share of profit (loss) of subsidiaries, joint ventures and associates | 1,812,055 |  |  | 344,394 |  |  | (78,299) |  |  | ‐ |  |  | 266,095 |  |  | 1,545,960 |
Share of profit (loss) of subsidiaries, joint ventures and associates | (43,617 | ) |  | 414 |  |  | ‐ |  |  | - |  |  | 414 |  |  | (44,031 | )
Operating income (loss) before finance income (expenses) and income and social contribution taxes | 1,768,438 |  |  | 344,808 |  |  | (78,299 | ) |  | - |  |  | 266,509 |  |  | 1,501,929 |
Financial result, net | (269,374 | ) |  | 1,482 |  |  | (38,938 | ) |  | 318,430 |  |  | 280,974 |  |  | (550,348 | )
Profit (loss) before income and social contribution taxes | 1,499,064 |  |  | 346,290 |  |  | (117,237 | ) |  | 318,430 |  |  | 547,483 |  |  | 951,581 |
Income and social contribution taxes | (571,367 | ) |  | (118,132 | ) |  | (40,453 | ) |  | (108,265 | ) |  | (266,850 | ) |  | (304,517 | )
Net income from continuing operations | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 647,064 |
Net income from discontinued operations | - |  |  | - |  |  | - |  |  | - |  |  | 280,633 |  |  | 280,633 |
Profit (loss) for the year | 927,697 |  |  | 228,158 |  |  | (157,690 | ) |  | 210,165 |  |  | 280,633 |  |  | 927,697 |
Deprecia tion and amortiza tion for the year (i) | 1,556,599 |  |  | 275,063 |  |  | 153,899 |  |  | - |  |  | 428,962 |  |  | 1,127,637 |
(i) Balances included for complete breakdown of segment information.
| 12/31/2020 |  |  | Discontinued operations |  | 12/31/2020 |
| Disclosed |  |  | Oxiteno |  |  | Extrafarma |  |  | Eliminations |  |  | Total |  |  | Re-Restated |
| (A) |  |  |  |  |  |  |  |  |  |  |  | (B) |  |  | (A-B) |
Net cash provided by (used in) operating activities | 3,138,119 |  |  | 765,090 |  |  | 111,396 |  |  | (2,380 | ) |  | 874,106 |  |  | 2,264,013 |
Net cash used in investing activities | (2,136,405 | ) |  | (159,349 | ) |  | (6,484 | ) |  | (321,557 | ) |  | (487,390 | ) |  | (1,649,015 | )
Net cash (used in) provided by financing activities | (592,333 | ) |  | (1,236,490 | ) |  | 11,272 |  |  | 305,534 |  |  | (919,684 | ) |  | 327,351 |
Effect of exchange rate changes on cash and cash equivalents in foreign currency | 136,734 |  |  | 114,822 |  |  | ‐ |  |  | ‐ |  |  | 114,822 |  |  | 21,912 |
Increase (decrease) in cash and cash equivalents | 546,115 |  |  | (515,927 | ) |  | 116,184 |  |  | (18,403) |  |  | (418,146 | ) |  | 964,261 |
c.4 The results for the year and cash flows from discontinued operations as of December 31, 2019 are shown below:
| 12/31/2019 |  |  | Discontinued operations |  |  | 12/31/2019 |
| Disclosed |  |  | Oxiteno |  |  | Extrafarma |  |  | Eliminations |  |  | Total |  |  | Re-Restated |
Net revenue from sales and services | 89,297,975 |  |  | 4,254,237 |  |  | 2,060,569 |  |  | (21,560 | ) |  | 6,293,246 |  |  | 83,004,729 |
Cost of products and services sold | (83,187,109 | ) |  | ( 3,537,570 | ) |  | (1,462,313 | ) |  | 21,560 |  |  | ( 4,978,323 | ) |  | (78,208,786 | )
Gross profit | 6,110,866 |  |  | 716,667 |  |  | 598,256 |  |  | - |  |  | 1,314,923 |  |  | 4,795,943 |
Operating income (expenses) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Selling marketing and administrative | ( 4,366,640 | ) |  | ( 737,606 | ) |  | (742,599 | ) |  | - |  |  | ( 1,480,205 | ) |  | ( 2,886,435 | )
Other operating income, net | (443,674 | ) |  | (5,348 | ) |  | (580,055 | ) |  | - |  |  | ( 585,403 | ) |  | 141,729 |
Operating income (loss) before finance income (expenses) and share of profit (loss) of subsidiaries, joint ventures and associates | 1,300,552 |  |  | (26,287 | ) |  | (724,398 | ) |  | - |  |  | (750,685 | ) |  | 2,051,237 |
Share of profit (loss) of subsidiaries, joint ventures and associates | (12,145 | ) |  | 528 |  |  | - |  |  | 36 |  |  | 564 |  |  | ( 12,709 | )
Operating income (loss) before finance income (expenses) and income and social contribution taxes | 1,288,407 |  |  | (25,759 | ) |  | (724,398 | ) |  | 36 |  |  | (750,121 | ) |  | 2,038,528 |
Financial result, net | (506,854 | ) |  | 14,464 |  |  | (32,451 | ) |  | (184,484 | ) |  | 166,497 |  |  | ( 673,351 | )
Profit (loss) before income and social contribution taxes | 781,553 |  |  | (11,295 | ) |  | (756,849 | ) |  | 184,520 |  |  | (583,624 | ) |  | 1,365,177 |
Income and social contribution taxes | (378,609 | ) |  | 35,191 |  |  | 118,901 |  |  | (62,725 | ) |  | 91,367 |  |  | (469,976 | )
Net income from continuing operations | 402,944 |  |  | 23,896 |  |  | ( 637,948 | ) |  | 121,795 |  |  | ( 492,257 | ) |  | 895,201 |
Net income from discontinued operations | - |  |  | (23,896 | ) |  | 637,948 |  |  | (121,795 | ) |  | 492,257 |  |  | ( 492,257 | )
Profit (loss) for the year | 402,944 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 402,944 |
Depreciation and amortization for the year (1) | 1,499,955 |  |  | 222,004 |  |  | 154,324 |  |  | - |  |  | 376,328 |  |  | 1,123,627 |
(i) Balances included for complete breakdown of segment information.
| 12/31/2019 |  |  | Discontinued operations |  | 12/31/2019 |
| Disclosed |  |  | Oxiteno |  |  | Extrafarma |  |  | Eliminations |  |  | Total |  |  | Re-Restated |
| (A) |  |  |  |  |  |  |  |  |  |  |  | (B) |  |  | (A-B) |
Net cash provided by (used in) operating activities | 2,924,852 |  |  | 486,276 |  |  | 23,282 |  |  | 42,910 |  |  | 552,468 |  |  | 2,372,384 |
Net cash used in investing activities | (1,835,261 | ) |  | (882,894 | ) |  | (122,462 | ) |  | 9,433 |  |  | (995,923 | ) |  | (839,338 | )
Net cash (used in) provided by financing activities | (2,922,229 | ) |  | (375,258 | ) |  | 125,852 |  |  | 7,499 |  |  | (241,907 | ) |  | (2,680,322 | )
Effect of exchange rate changes on cash and cash equivalents in foreign currency | 9,066 |  |  | 30,871 |  |  | - |  |  | - |  |  | 30,871 |  |  | (21,805 | )
Increase (decrease) in cash and cash equivalents | (1,823,572 | ) |  | (741,005 | ) |  | 26,672 |  |  | 59,842 |  |  | (654,491 | ) |  | (1,169,081 | )
c.3.1 Share of profit (loss) of investees Oxiteno and Extrafarma, net of related parties, were re-present as discontinued operations in the total amount of R$ (492,257) in the statement of profit or loss for the year 2019, as per Notes 3.c.3 and 13.a.

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