Edgar Filing: ULTRAPAR HOLDINGS INC

6-K

Form 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report Of Foreign Private Issuer

Pursuant To Rule 13a-16 Or 15d-16 Of

The Securities Exchange Act Of 1934

For the month of August, 2016

Commission File Number: 001-14950

ULTRAPAR HOLDINGS INC.

(Translation of Registrant’s Name into English)

Avenida Brigadeiro Luis Antonio, 1343, 9º Andar

São Paulo, SP, Brazil 01317-910

(Address of Principal Executive Offices)

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 X		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		No X

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		No X

ULTRAPAR HOLDINGS INC.

TABLE OF CONTENTS

ITEM

Individual and Consolidated Interim Financial Information for the Three-Month Period Ended June 30, 2016 Report on Review of Interim Financial Information

2Q16 Earnings release

Board of Directors Minutes

Notice to shareholders

(Convenience Translation into English from

the Original Previously Issued in Portuguese)

Ultrapar Participações S.A.

Individual and Consolidated

Interim Financial Information

for the Six-Month Period

Ended June 30, 2016 and

Report on Review of Interim

Financial Information

Deloitte Touche Tohmatsu Auditores Independentes

Ultrapar Participações S.A. and Subsidiaries

Individual and Consolidated Interim Financial Information

for the Six-Month Period Ended June 30, 2016

Table of Contents


Report on Review of Interim Financial Information			3
Balance Sheets			4 – 5
Income Statements			6 –7
Statements of Comprehensive Income			8 –9
Statements of Changes in Equity			10 – 11
Statements of Cash Flows—Indirect Method			12 – 13
Statements of Value Added			14
Notes to the Interim Financial Information			15 – 93

(Convenience Translation into English from the Original Previously Issued in Portuguese)

REPORT ON REVIEW OF INTERIM FINANCIAL INFORMATION

To the Shareholders, Board of Directors and Management of

Ultrapar Participações S.A.

São Paulo—SP

Introduction

We have reviewed the accompanying individual and consolidated interim financial information of Ultrapar Participações S.A. (the “Company”), identified as Parent and Consolidated, respectively, included in the Interim Financial Information Form (ITR), for the three-month period ended June 30, 2016, which comprises the balance sheet as of June 30, 2016 and the related statements of income and comprehensive income for the three and six-month periods then ended and changes in equity and cash flows for the six-month period then ended, including the explanatory notes.

The Company’s Management is responsible for the preparation of the individual and consolidated interim financial information in accordance with technical pronouncement CPC 21 (R1)—Interim Financial Information and international standard IAS 34—Interim Financial Reporting, issued by the International Accounting Standards Board—IASB, as well as for the presentation of such information in accordance with the standards issued by the Brazilian Securities Commission (CVM), applicable to the preparation of the Interim Financial Information (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 of interim financial information (NBC TR 2410 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 standards on auditing 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 interim financial information

Based on our review, nothing has come to our attention that causes us to believe that the accompanying individual and consolidated interim financial information included in the ITR referred to above was not prepared, in all material respects, in accordance with technical pronouncement CPC 21 (R1) and international standard IAS 34, applicable to the preparation of Interim Financial Information (ITR), and presented in accordance with the standards issued by the CVM.

Other matters

Statements of value added

We have also reviewed the individual and consolidated statements of value added (“DVA”) for the six-month period ended June 30, 2016, prepared under the responsibility of the Company’s Management, the presentation of which is required by the standards issued by the CVM applicable to the preparation of Interim Financial Information (ITR) and considered as supplemental information for International Financial Reporting Standards—IFRSs, which do not require the presentation of the DVA. These statements were subject to the same review procedures described above, and, based on our review, nothing has come to our attention that causes us to believe that they were not prepared, in all material respects, consistently with the individual and consolidated interim financial information taken as a whole.

The accompanying individual and consolidated interim financial information has been translated into English for the convenience of readers outside Brazil.

São Paulo, August 10, 2016


DELOITTE TOUCHE TOHMATSU		Edimar Facco
Auditores Independentes		Engagement Partner

(Convenience Translation into English from the Original Previously Issued in Portuguese)

REPORT ON REVIEW OF INTERIM FINANCIAL INFORMATION

Ultrapar Participações S.A. and Subsidiaries

Balance Sheets

as of June 30, 2016 and December 31, 2015

(In thousands of Brazilian Reais)


			Parent				Consolidated
Assets	Note		06/30/2016		12/31/2015		06/30/2016		12/31/2015
Current assets
Cash and cash equivalents		4		96,009		48,061		2,503,156		2,702,893
Financial investments		4		21,342		6,708		789,620		803,304
Trade receivables, net		5		—		—		3,153,093		3,167,164
Inventories, net		6		—		—		2,431,953		2,495,237
Recoverable taxes, net		7		49,063		48,019		498,273		628,778
Dividends receivable				2		392,127		716		2,710
Other receivables				2,057		6,051		72,891		29,787
Trade receivables – insurer indemnification		33		—		—		164,330		—
Prepaid expenses, net		10		22		89		115,573		81,476

Total current assets				168,495		501,055		9,729,605		9,911,349
Non-current assets
Financial investments		4		—		—		123,931		466,965
Trade receivables, net		5		—		—		188,566		152,239
Related parties		8.a		772,510		782,404		490		490
Deferred income and social contribution taxes		9.a		24,244		8,680		564,184		558,993
Recoverable taxes, net		7		12,811		4,037		148,525		135,449
Escrow deposits		20.a		148		148		758,592		740,835
Other receivables				—		—		14,325		16,507
Prepaid expenses, net		10		—		—		157,571		146,664

				809,713		795,269		1,956,184		2,218,142
Investments
In subsidiaries		11.a		8,138,450		7,619,441		—		—
In joint-ventures		11.a; 11.b		30,051		31,514		92,790		79,377
In associates		11.c		—		—		22,386		21,537
Other				—		—		2,814		2,814
Property, plant, and equipment, net		12		—		—		5,475,614		5,438,895
Intangible assets, net		13		246,163		246,163		3,233,477		3,293,935

				8,414,664		7,897,118		8,827,081		8,836,558
Total non-current assets				9,224,377		8,692,387		10,783,265		11,054,700

Total assets				9,392,872		9,193,442		20,512,870		20,966,049

The accompanying notes are an integral part of the interim financial information.

Ultrapar Participações S.A. and Subsidiaries

Balance Sheets

as of June 30, 2016 and December 31, 2015

(In thousands of Brazilian Reais)


			Parent						Consolidated
Liabilities	Note		06/30/2016			12/31/2015			06/30/2016			12/31/2015
Current liabilities
Loans		14		—			—			1,154,765			1,048,098
Debentures		14.f		33,524			33,560			53,834			47,372
Finance leases		14.h		—			—			2,667			2,385
Trade payables		15		59			2,636			1,018,792			1,460,532
Salaries and related charges		16		196			195			302,452			404,313
Taxes payable		17		627			877			162,700			168,804
Dividends payable		23.g		17,873			293,460			21,191			298,791
Income and social contribution taxes payable				66			301			111,129			216,883
Post-employment benefits		18.b		—			—			13,734			13,747
Provision for asset retirement obligation		19		—			—			4,481			5,232
Provision for tax, civil, and labor risks		20.a		—			—			52,225			45,322
Trade payables – indemnification customers		33		—			—			41,184			—
Other payables				98			1,359			82,626			97,492
Deferred revenue		21		—			—			21,920			24,420

Total current liabilities				52,443			332,388			3,043,250			3,833,391
Non-current liabilities
Loans		14		—			—			4,970,346			5,561,401
Debentures		14.f		799,723			799,554			2,694,195			2,198,843
Finance leases		14.h		—			—			47,283			43,509
Related parties		8.a		689			5			4,372			4,372
Deferred income and social contribution taxes		9.a		—			—			197,942			266,004
Post-employment benefits		18.b		—			—			116,084			112,848
Provision for asset retirement obligation		19		—			—			72,709			69,484
Provision for tax, civil, and labor risks		20.a		4,231			4,221			700,268			684,660
Deferred revenue		21		—			—			10,634			11,036
Subscription warrants – indemnification		22		157,133			112,233			157,133			112,233
Other payables				—			—			91,649			94,139

Total non-current liabilities				961,776			916,013			9,062,615			9,158,529
Shareholders’ equity
Share capital		23.a		3,838,686			3,838,686			3,838,686			3,838,686
Capital reserve		23.c		552,038			546,607			552,038			546,607
Treasury shares		23.b		(483,879	)		(490,881	)		(483,879	)		(490,881	)
Revaluation reserve		23.d		5,464			5,590			5,464			5,590
Profit reserves		23.e		3,801,999			3,801,999			3,801,999			3,801,999
Additional dividends to the minimum mandatory dividends		23.g		—			157,162			—			157,162
Retained earnings				749,483			—			749,483			—
Valuation adjustments		2.c; 2.o; 23.f		(75,888	)		18,953			(75,888	)		18,953
Cumulative translation adjustments		2.c; 2.r; 23.f		(9,250	)		66,925			(9,250	)		66,925

Shareholders’ equity attributable to:
Shareholders of the Company				8,378,653			7,945,041			8,378,653			7,945,041
Non-controlling interests in subsidiaries				—			—			28,352			29,088

Total shareholders’ equity				8,378,653			7,945,041			8,407,005			7,974,129

Total liabilities and shareholders’ equity				9,392,872			9,193,442			20,512,870			20,966,049

The accompanying notes are an integral part of the interim financial information.

Ultrapar Participações S.A. and Subsidiaries

Income Statements

For the six-month period ended June 30, 2016 and 2015

(In thousands of Brazilian Reais, except earnings per share)


			Parent						Consolidated
	Note		01/01/2016 to 06/30/2016			01/01/2015 to 06/30/2015			01/01/2016 to 06/30/2016			01/01/2015 to 06/30/2015
Net revenue from sales and services		24		—			—			38,822,521			35,914,319
Cost of products and services sold		25		—			—			(35,410,967	)		(32,789,552	)

Gross profit				—			—			3,411,554			3,124,767
Operating income (expenses)
Selling and marketing		25		—			—			(1,290,071	)		(1,197,827	)
General and administrative		25		—			(9	)		(678,129	)		(597,585	)
Gain (loss) on disposal of property, plant and equipment and intangibles		26		—			—			(2,008	)		24,631
Other operating income, net		27		2			29,784			75,602			256

Operating income before financial income (expenses) and share of profit of subsidiaries, joint ventures and associates				2			29,775			1,516,948			1,354,242
Financial income		28		73,387			83,979			220,927			203,160
Financial expenses		28		(107,568	)		(89,374	)		(659,843	)		(511,570	)
Share of profit (loss) of subsidiaries, joint ventures and associates		11		772,405			697,369			3,041			528

Income before income and social contribution taxes				738,226			721,749			1,081,073			1,046,360

Income and social contribution taxes
Current		9.b		(4,412	)		(21,230	)		(455,326	)		(384,793	)
Deferred		9.b		15,564			12,913			76,623			18,794
Tax incentives		9.b; 9.c		—			—			52,600			37,322

				11,152			(8,317	)		(326,103	)		(328,677	)
Net income for the period				749,378			713,432			754,970			717,683

Net income for the period attributable to:
Shareholders of the Company				749,378			713,432			749,378			713,432
Non-controlling interests in subsidiaries				—			—			5,592			4,251
Earnings per share (based on weighted average number of shares outstanding) – R$
Basic		29		1.3843			1.3086			1.3843			1.3086
Diluted		29		1.3741			1.2982			1.3741			1.2982

The accompanying notes are an integral part of the interim financial information.

Ultrapar Participações S.A. and Subsidiaries

Income Statements

For the three-month period ended June 30, 2016 and 2015

(In thousands of Brazilian Reais, except earnings per share)


			Parent						Consolidated
	Note		04/01/2016 to 06/30/2016			04/01/2015 to 06/30/2015			04/01/2016 to 06/30/2016			04/01/2015 to 06/30/2015
Net revenue from sales and services		24		—			—			19,298,198			18,510,679
Cost of products and services sold		25		—			—			(17,604,887	)		(16,968,005	)

Gross profit				—			—			1,693,311			1,542,674
Operating income (expenses)
Selling and marketing		25		—			—			(648,869	)		(613,623	)
General and administrative		25		—			2			(356,309	)		(309,593	)
Gain (loss) on disposal of property, plant and equipment and intangibles		26		—			—			(2,083	)		2,371
Other operating income, net		27		5			29,784			40,176			(21,202	)

Operating income before financial income (expenses) and share of profit of subsidiaries, joint ventures and associates				5			29,786			726,226			600,627
Financial income		28		32,430			44,585			105,798			99,702
Financial expenses		28		(49,084	)		(27,343	)		(328,258	)		(226,869	)
Share of profit (loss) of subsidiaries, joint ventures and associates		11		375,567			297,549			6,308			3,444

Income before income and social contribution taxes				358,918			344,577			510,074			476,904

Income and social contribution taxes
Current		9.b		(987	)		(16,649	)		(227,956	)		(223,869	)
Deferred		9.b		6,229			633			54,531			56,376
Tax incentives		9.b; 9.c		—			—			30,468			21,660

				5,242			(16,016	)		(142,957	)		(145,833	)
Net income for the period				364,160			328,561			367,117			331,071

Net income for the period attributable to:
Shareholders of the Company				364,160			328,561			364,160			328,561
Non-controlling interests in subsidiaries				—			—			2,957			2,510
Earnings per share (based on weighted average number of shares outstanding) – R$
Basic		29		0.6727			0.6037			0.6727			0.6037
Diluted		29		0.6676			0.5987			0.6676			0.5987

The accompanying notes are an integral part of the interim financial information.

Ultrapar Participações S.A. and Subsidiaries

Statements of Comprehensive Income

For the six-month period ended June 30, 2016 and 2015

(In thousands of Brazilian Reais)


			Parent						Consolidated
	Note		01/01/2016 to 06/30/2016			01/01/2015 to 06/30/2015			01/01/2016 to 06/30/2016			01/01/2015 to 06/30/2015
Net income for the period attributable to shareholders of the Company				749,378			713,432			749,378			713,432
Net income for the period attributable to non-controlling interests in subsidiaries				—			—			5,592			4,251

Net income for the period				749,378			713,432			754,970			717,683

Items that are subsequently reclassified to profit or loss:
Fair value adjustments of available for sale financial instruments		2.c; 23.f		(97,697	)		(916	)		(97,697	)		(916	)
Cumulative translation adjustments, net of hedge of net investments in foreign operations		2.c; 2.r; 23.f		(76,175	)		26,011			(76,175	)		26,011
Items that are not subsequently reclassified to profit or loss:
Actuarial gains of post-employment benefits		2.o; 23.f		2,856			—			2,856			—

Total comprehensive income for the period				578,362			738,527			583,954			742,778

Total comprehensive income for the period attributable to shareholders of the Company				578,362			738,527			578,362			738,527
Total comprehensive income for the period attributable to non-controlling interest in subsidiaries				—			—			5,592			4,251

The accompanying notes are an integral part of the interim financial information.

Ultrapar Participações S.A. and Subsidiaries

Statements of Comprehensive Income

For the three-month period ended June 30, 2016 and 2015

(In thousands of Brazilian Reais)


			Parent						Consolidated
	Note		04/01/2016 to 06/30/2016			04/01/2015 to 06/30/2015			04/01/2016 to 06/30/2016			04/01/2015 to 06/30/2015
Net income for the period attributable to shareholders of the Company				364,160			328,561			364,160			328,561
Net income for the period attributable to non-controlling interests in subsidiaries				—			—			2,957			2,510

Net income for the period				364,160			328,561			367,117			331,071

Items that are subsequently reclassified to profit or loss:
Fair value adjustments of available for sale financial instruments		2.c; 23.f		(20,369	)		(14,138	)		(20,369	)		(14,138	)
Cumulative translation adjustments, net of hedge of net investments in foreign operations		2.c; 2.r; 23.f		(39,187	)		(25,645	)		(39,187	)		(25,645	)

Total comprehensive income for the period				304,604			288,778			307,561			291,288

Total comprehensive income for the period attributable to shareholders of the Company				304,604			288,778			304,604			288,778
Total comprehensive income for the period attributable to non-controlling interest in subsidiaries				—			—			2,957			2,510

The accompanying notes are an integral part of the interim financial information.

Ultrapar Participações S.A. and Subsidiaries

Statements of Changes in Equity

For the six-month period ended June 30, 2016 and 2015

(In thousands of Brazilian Reais, except dividends per share)


													Profit reserve						Cumulative other comprehensive income												Shareholders’ equity attributable to:
	Note		Share capital		Capital reserve		Treasury shares			Revaluation reserve on subsidiaries			Legal reserve		Investments statutory reserve		Retention of profits		Valuation adjustments			Cumulative translation adjustments			Retained earnings			Additional dividends to the minimum mandatory dividends			Shareholders of the Company			Non-controlling interests in subsidiaries			Consolidated shareholders’ equity
Balance as of December 31, 2015				3,838,686		546,607		(490,881	)		5,590			472,350		1,996,583		1,333,066		18,953			66,925			—			157,162			7,945,041			29,088			7,974,129
Net income for the period				—		—		—			—			—		—		—		—			—			749,378			—			749,378			5,592			754,970
Other comprehensive income:
Fair value adjustments of available for sale		2.c; 23.f		—		—		—			—			—		—		—		(97,697	)		—			—			—			(97,697	)		—			(97,697	)
Actuarial gains of post-employment benefits, net		2.o; 23.f		—		—		—			—			—		—		—		2,856			—			—			—			2,856			—			2,856
Currency translation of foreign subsidiaries		2.c; 2.r; 23.f		—		—		—			—			—		—		—		—			(76,175	)		—			—			(76,175	)		—			(76,175	)

Total comprehensive income for the period				—		—		—			—			—		—		—		(94,841	)		(76,175	)		749,378			—			578,362			5,592			583,954
Sale of treasury shares		8.c; 23.b		—		5,431		7,002			—			—		—		—		—			—			—			—			12,433			—			12,433
Realization of revaluation reserve of subsidiaries		23.d		—		—		—			(126	)		—		—		—		—			—			126			—			—			—			—
Income and social contribution taxes on realization of revaluation reserve of subsidiaries		23.d		—		—		—			—			—		—		—		—			—			(21	)		—			(21	)		—			(21	)
Dividends attributable to non-controlling interests				—		—		—			—			—		—		—		—			—			—			—			—			(6,328	)		(6,328	)
Approval of additional dividends by the Shareholders’ Meeting		23.g		—		—		—			—			—		—		—		—			—			—			(157,162	)		(157,162	)		—			(157,162	)

Balance as of June 30, 2016				3,838,686		552,038		(483,879	)		5,464			472,350		1,996,583		1,333,066		(75,888	)		(9,250	)		749,483			—			8,378,653			28,352			8,407,005

The accompanying notes are an integral part of the interim financial information.

Ultrapar Participações S.A. and Subsidiaries

Statements of Changes in Equity

For the six-month period ended June 30, 2016 and 2015

(In thousands of Brazilian Reais, except dividends per share)


														Profit reserve						Cumulative other comprehensive income											Shareholders’ equity attributable to:
	Note		Share capital		Capital reserve			Treasury shares			Revaluation reserve on subsidiaries			Legal reserve		Investments statutory reserve		Retention of profits		Valuation adjustments			Cumulative translation adjustments		Retained earnings			Additional dividends to the minimum mandatory dividends			Shareholders of the Company			Non-controlling interests in subsidiaries			Consolidated shareholders’ equity
Balance as of December 31, 2014				3,838,686		547,462			(103,018	)		5,848			397,177		1,439,461		1,333,066		7,149			43,192		—			188,976			7,697,999			28,596			7,726,595
Net income for the period				—		—			—			—			—		—		—		—			—		713,432			—			713,432			4,251			717,683
Other comprehensive income:
Fair value adjustments of available for sale		2.c; 23.f		—		—			—			—			—		—		—		(916	)		—		—			—			(916	)		—			(916	)
Currency translation of foreign subsidiaries net of hedge of net investments in foreign operation		2.c; 2.r; 23.f		—		—			—			—			—		—		—		—			26,011		—			—			26,011			—			26,011

Total comprehensive income for the period				—		—			—			—			—		—		—		(916	)		26,011		713,432			—			738,527			4,251			742,778
Acquisition of own shares to held in treasury		23.b		—		(855	)		(167,395	)		—			—		—		—		—			—		—			—			(168,250	)		—			(168,250	)
Realization of revaluation reserve of subsidiaries		23.d		—		—			—			(132	)		—		—		—		—			—		132			—			—			—			—
Income and social contribution taxes on realization of revaluation reserve of subsidiaries		23.d		—		—			—			—			—		—		—		—			—		(12	)		—			(12	)		—			(12	)
Dividends attributable to non-controlling interests				—		—			—			—			—		—		—		—			—		—			—			—			(6,455	)		(6,455	)
Approval of additional dividends by the Shareholders’ Meeting		23.g		—		—			—			—			—		—		—		—			—		—			(188,976	)		(188,976	)		—			(188,976	)

Balance as of June 30, 2015				3,838,686		546,607			(270,413	)		5,716			397,177		1,439,461		1,333,066		6,233			69,203		713,552			—			8,079,288			26,392			8,105,680

The accompanying notes are an integral part of the interim financial information.

Ultrapar Participações S.A. and Subsidiaries

Statements of Cash Flows—Indirect Method

For the six-month period ended June 30, 2016 and 2015

(In thousands of Brazilian Reais)


			Parent						Consolidated
	Note		06/30/2016			06/30/2015			06/30/2016			06/30/2015
Cash flows from operating activities
Net income for the period				749,378			713,432			754,970			717,683
Adjustments to reconcile net income to cash provided by operating activities
Share of loss (profit) of subsidiaries, joint ventures and associates		11		(772,405	)		(697,369	)		(3,041	)		(528	)
Depreciation and amortization		12; 13		—			—			545,363			477,573
PIS and COFINS credits on depreciation		12; 13		—			—			6,215			6,546
Asset retirement obligation		19		—			—			(1,425	)		(1,973	)
Interest, monetary, and foreign exchange rate variations				103,400			91,218			159,770			626,903
Deferred income and social contribution taxes		9.b		(15,564	)		(12,913	)		(76,623	)		(18,794	)
(Gain) loss on disposal of property, plant and equipment and intangibles		26		—			—			2,008			(24,631	)
Others				—			—			443			2,028
Dividends received from subsidiaries and joint-ventures				475,949			881,860			6,645			903
(Increase) decrease in current assets
Trade receivables		5		—			—			19,841			(259,486	)
Inventories		6		—			—			63,415			(440,537	)
Recoverable taxes		7		(1,044	)		1,996			130,505			(42,410	)
Other receivables				3,994			(29,036	)		(94,508	)		(44,305	)
Prepaid expenses		10		67			39			(31,670	)		(37,294	)
Increase (decrease) in current liabilities
Trade payables		15		(2,577	)		(425	)		(441,739	)		(321,231	)
Salaries and related charges		16		1			36			(101,861	)		3,366
Taxes payable		17		(250	)		18			(6,104	)		14,169
Income and social contribution taxes				66			—			216,520			245,838
Provision for tax, civil, and labor risks		20.a		—			—			6,903			524
Other payables				(1,261	)		(23	)		(88,032	)		(10,981	)
Deferred revenue		21		—			—			(2,500	)		(1,368	)
(Increase) decrease in non-current assets
Trade receivables		5		—			—			(36,327	)		(1,475	)
Recoverable taxes		7		(8,774	)		3,493			(13,076	)		19,430
Escrow deposits				—			—			(17,757	)		(22,934	)
Other receivables				—			—			2,182			(2,316	)
Prepaid expenses		10		—			—			(901	)		6,104
Increase (decrease) in non-current liabilities
Post-employment benefits		18.b		—			—			3,223			7,864
Provision for tax, civil, and labor risks		20.a		10			10			15,608			21,693
Other payables				—			—			(2,490	)		(129	)
Deferred revenue		21		—			—			(402	)		852
Income and social contribution taxes paid				(301	)		—			(322,274	)		(244,169	)

Net cash provided by operating activities				530,689			952,336			692,881			676,915

The accompanying notes are an integral part of the interim financial information.

Ultrapar Participações S.A. and Subsidiaries

Statements of Cash Flows—Indirect Method

For the six-month period ended June 30, 2016 and 2015

(In thousands of Brazilian Reais)


			Parent						Consolidated
	Note		06/30/2016			06/30/2015			06/30/2016			06/30/2015
Cash flows from investing activities
Financial investments, net of redemptions				(13,265	)		25,535			350,060			230,195
Acquisition of property, plant, and equipment		12		—			—			(409,923	)		(295,278	)
Acquisition of intangible assets		13		—			—			(226,034	)		(236,195	)
Capital increase in joint ventures		11.b		—			—			(25,781	)		(20,100	)
Proceeds from disposal of property, plant and equipment and intangibles		26		—			—			13,346			51,334

Net cash provided by (used in) investing activities				(13,265	)		25,535			(298,332	)		(270,044	)

Cash flows from financing activities
Loans and debentures
Proceeds		14		—			799,042			948,388			1,445,207
Repayments		14		—			(800,000	)		(411,219	)		(1,482,267	)
Interest paid		14		(58,369	)		(96,683	)		(669,901	)		(585,912	)
Payments of financial lease				—			—			(2,429	)		(2,734	)
Dividends paid				(432,750	)		(387,796	)		(441,085	)		(396,347	)
Acquisition of non-controlling interests of subsidiaries				—			—			—			(9	)
Acquisition of own shares to held in treasury				—			(168,250	)		—			(168,250	)
Sale of treasury shares		8.c		12,433			—			—			—
Related parties				9,210			(25,978	)		—			—

Net cash used in financing activities				(469,476	)		(679,665	)		(576,246	)		(1,190,312	)

Effect of exchange rate changes on cash and cash equivalents in foreign currency				—			—			(18,040	)		11,083

Increase (decrease) in cash and cash equivalents				47,948			298,206			(199,377	)		(772,358	)

Cash and cash equivalents at the beginning of the period		4		48,061			119,227			2,702,893			2,827,369
Cash and cash equivalents at the end of the period		4		96,009			417,433			2,503,156			2,055,011

The accompanying notes are an integral part of the interim financial information.

Ultrapar Participações S.A. and Subsidiaries

Statements of Value Added

For the six-month period ended June 30, 2016 and 2015

(In thousands of Brazilian Reais, except percentages)


			Parent											Consolidated
	Note		06/30/2016			%			06/30/2015			%		06/30/2016			%		06/30/2015			%
Revenue
Gross revenue from sales and services, except rents and royalties		24		—						—					39,980,384					36,962,021
Rebates, discounts, and returns		24		—						—					(259,028	)				(167,886	)
Allowance for doubtful accounts—Reversal (allowance)				—						—					(20,203	)				(13,718	)
Gain (loss) on disposal of property, plant and equipment and intangibles and other operating income, net		26		—						29,784					73,594					24,887

				—						29,784					39,774,747					36,805,304
Materials purchased from third parties
Raw materials used				—						—					(2,163,186	)				(1,936,887	)
Cost of goods, products, and services sold				—						—					(33,176,692	)				(30,834,900	)
Third-party materials, energy, services, and others				(5,671	)					(9,562	)				(1,073,556	)				(999,251	)
Reversal of impairment losses				8,773						12,381					(4,685	)				(3,379	)

				3,102						2,819					(36,418,119	)				(33,774,417	)
Gross value added				3,102						32,603					3,356,628					3,030,887

Deductions
Depreciation and amortization				—						—					(545,363	)				(477,573	)
PIS and COFINS credits on depreciation				—						—					(6,215	)				(6,546	)

				—						—					(551,578	)				(484,119	)
Net value added by the Company				3,102						32,603					2,805,050					2,546,768

Value added received in transfer
Share of profit (loss) of subsidiaries, joint-ventures, and associates		11		772,405						697,369					3,041					528
Dividends at cost				—						5					—					—
Rents and royalties		24		—						—					60,591					56,117
Financial income		28		73,387						83,979					220,927					203,160

				845,792						781,353					284,559					259,805
Total value added available for distribution				848,894						813,956					3,089,609					2,806,573

Distribution of value added
Labor and benefits				2,583			—			2,386			—		859,603			28		786,634			27
Taxes, fees, and contributions				(7,555	)		(1	)		6,632			1		763,781			25		721,043			26
Financial expenses and rents				104,488			12			91,506			11		711,255			23		581,213			21
Retained earnings				749,378			89			713,432			88		754,970			24		717,683			26

Value added distributed				848,894			100			813,956			100		3,089,609			100		2,806,573			100

The accompanying notes are an integral part of the interim financial information.

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

1.	Operations

Ultrapar Participações S.A. (“Ultrapar” or “Company”), is a publicly-traded company headquartered at the Brigadeiro Luis Antônio Avenue, 1343 in the city of Săo Paulo – SP, Brazil.

The Company engages in the investment of its own capital in services, commercial, and industrial activities, through the subscription or acquisition of shares of other companies. Through its subsidiaries, it operates in the segments of liquefied petroleum gas—LPG distribution (“Ultragaz”), fuel distribution and related businesses (“Ipiranga”), production and marketing of chemicals (“Oxiteno”), and storage services for liquid bulk (“Ultracargo”) and retail distribution of pharmaceutical, hygiene, beauty, and skincare products, through Imifarma Produtos Farmacêuticos e Cosméticos S.A. (“Extrafarma”). For further information about segments see Note 30.

2.	Presentation of Interim Financial Information and Summary of Significant Accounting Policies

The Company’s individual and consolidated interim financial information were prepared in accordance with the International Accounting Standards (“IAS”) 34 as issued by the International Accounting Standards Board (“IASB”), and in accordance with CPC 21 (R1)—Interim Financial Reporting issued by the Accounting Pronouncements Committee (“CPC”) and presented in accordance with standards established by the Brazilian Securities and Exchange Commission (“CVM”).

The presentation currency of the Company’s individual and consolidated interim financial information is the Brazilian Real (“R$”), which is the Company’s functional currency.

The accounting policies described below were applied by the Company and its subsidiaries in a consistent manner for all periods presented in the individual and consolidated interim financial information.

a.	*Recognition of Income*

Revenue is measured at the fair value of the consideration received or receivable, net of sales returns, discounts, and other deductions, if applicable.

Revenue from sales of fuels and lubricants is recognized when the products are delivered to gas stations and to large consumers. Revenue from sales of LPG is recognized when the products are delivered to customers at home, to independent dealers and to industrial and commercial customers. Revenue from sales of pharmaceuticals is recognized when the products are delivered to end user customers in own drugstores and when the products are delivered to independent resellers. Revenue from sales of chemical products is recognized when the products are delivered to industrial customers, depending of the freight mode of delivery. The revenue provided from storage services is recognized as services are performed.

Costs of products sold and services provided include goods (mainly fuels, lubricants, LPG, and pharmaceutical products), raw materials (chemicals and petrochemicals) and production, distribution, storage, and filling costs.

b.	*Cash and Cash Equivalents*

Includes cash, banks deposits, and short-term, highly-liquid investments that are readily convertible into a known amount of cash and are subject to an insignificant risk of change in value. See Note 4 for further details on cash and cash equivalents of the Company and its subsidiaries.

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

c.	*Financial Assets*

In accordance with IAS 32, IAS 39, and International Financial Reporting Standards (“IFRS”) 7 (CPC 38, 39 and 40 (R1)), the financial assets of the Company and its subsidiaries are classified in accordance with the following categories:

•

Measured at fair value through profit or loss: financial assets held for trading, that is, acquired or incurred principally for the purpose of selling or repurchasing in the near term, and derivatives. The balances are stated at fair value. The interest earned, the exchange variation, and changes in fair value are recognized in profit or loss.

•

Held to maturity: non-derivative financial assets with fixed or determinable payments, and fixed maturities for which the entity has the positive intention and ability to hold to maturity. The interest earned and the foreign currency exchange variation are recognized in profit or loss, and balances are stated at acquisition cost plus the interest earned, using the effective interest rate method.

•

Available for sale: non-derivative financial assets that are designated as available for sale or that are not classified into other categories at initial recognition. The balances are stated at fair value, and the interest earned and the foreign currency exchange variation are recognized in profit or loss. Differences between fair value and acquisition cost plus the interest earned are recognized in other comprehensive income in the “Valuation adjustments”. Accumulated gains and losses recognized in shareholders’ equity are reclassified to profit or loss in case of prepayment.

•

Loans and receivables: non-derivative financial assets with fixed or determinable payments or receipts, not quoted in an active market, except: (i) those which the entity intends to sell immediately or in the near term and which the entity classified as measured at fair value through profit or loss; (ii) those classified as available for sale; or (iii) those for which the Company may not recover substantially all of its initial investment for reasons other than credit deterioration. The interest earned and the foreign currency exchange variation are recognized in profit or loss. The balances are stated at acquisition cost plus interest, using the effective interest rate method. Loans and receivables include cash and banks, trade receivables, dividends receivable, and other trade receivables.

The Company and its subsidiaries use derivative financial instruments for hedging purposes, applying the concepts described below:

•

Hedge accounting—fair value hedge: derivative financial instruments used to hedge exposure to changes in the fair value of an item, attributable to a particular risk, which can affect the entity’s profit or loss. In the initial designation of the fair value hedge, the relationship between the hedging instrument and the hedged item is documented, including the objectives of risk management, the strategy in conducting the transaction, and the methods to be used to evaluate its effectiveness. Once the fair value hedge has been qualified as effective, the hedge item is also measured at fair value. Gains and losses from hedge instruments and hedge items are recognized in profit or loss. The hedge accounting must be discontinued when the hedge becomes ineffective.

•

Hedge accounting—cash flow hedge: derivative financial instruments used to hedge the exposure to variability in cash flows that is attributable to a risk associated with an asset or liability or highly probable transaction that may affect the income statements. The portion of the gain or loss on the hedging instrument that is determined to be effective relating to the effects of exchange rate effect, is recognized directly in equity in accumulated other comprehensive income as “Valuation adjustments” while the ineffective portion is recognized in profit or loss. Gains or losses on the hedging instrument relating to the effective portion of this hedge that had been recognized directly in accumulated other comprehensive income shall be recognized in profit or loss in the period in which the hedged item is recognized in profit or loss or as initial cost of non- financial assets, in the same line of the statement that the hedged item is recognized. The hedge accounting shall be discontinued when (i) the Company cancels the hedging relationship; (ii) the hedging instrument expires; and (iii) the hedging instrument no longer qualifies for hedge accounting. When hedge accounting is discontinued, gains and losses recognized in other comprehensive income in equity are reclassified to profit or loss in the period which the hedged item is recognized in profit or loss. If the transaction hedged is canceled or is not expected to occur, the cumulative gains and losses in other comprehensive income in equity shall be recognized immediately in profit or loss.

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

•

Hedge accounting—hedge of net investments in foreign operation: derivative financial instruments used to hedge exposure on net investments in foreign subsidiaries due to the fact that the local functional currency is different from the functional currency of the Company. The portion of the gain or loss on the hedging instrument that is determined to be effective, referring to the exchange rate effect, is recognized directly in equity in accumulated other comprehensive income as cumulative translation adjustments, while the ineffective portion and the operating costs are recognized in profit or loss. The gain or loss on the hedging instrument that has been recognized directly in accumulated other comprehensive income shall be recognized in income upon disposal of the foreign operation.

For further detail on financial instruments of the Company and its subsidiaries, see Notes 4, 14, and 31.

d.	*Trade Receivables*

Trade receivables are recognized at the amount invoiced, adjusted to present value if applicable, and includes all direct taxes attributable to the Company and its subsidiaries. An allowance for doubtful accounts is recorded based on estimated losses and is set at an amount deemed by management to be sufficient to cover any probable loss on realization of trade receivables (see Notes 5 and 31—Customer Credit Risk).

e.	*Inventories*

Inventories are stated at the lower of acquisition cost or net realizable value (see Note 6). The cost value of inventory is measured using the weighted average cost and includes the costs of acquisition and processing directly related to the units produced based on the normal capacity of production. Estimates of net realizable value are based on the average selling prices at the end of the reporting period, net of applicable direct selling expenses. Subsequent events related to the fluctuation of prices and costs are also considered, if relevant. If net realizable values are below inventory costs, a provision corresponding to this difference is recognized. Provisions are also made for obsolescence of products, materials, or supplies that (i) do not meet the Company and its subsidiaries’ specifications, (ii) have exceeded their expiration date, or (iii) are considered slow-moving inventory. This classification is made by management with the support of its industrial and operations teams.

f.	*Investments*

Investments in subsidiaries are accounted for under the equity method of accounting in the individual interim financial information of the parent company.

A subsidiary is an investee in which the investor is entitled to variable returns on investment and has the ability to interfere in its financial and operational activities. Usually the equity interest in a subsidiary is more than 50%.

Investments in associates and joint ventures are accounted for under the equity method of accounting in the individual and consolidated interim financial information (see Note 11).

An associate is an investment, in which an investor has significant influence, that is, has the power to participate in the financial and operating decisions of the investee but does not exercise control.

A joint venture is an investment in which the shareholders have the right to net assets on behalf of a joint control. Joint control is the agreement which establish that decisions about the relevant activities of the investee require the consent from the parties that share control.

Other investments are stated at acquisition cost less provision for losses, unless the loss is considered temporary.

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

g.	*Property, Plant, and Equipment*

Property, plant, and equipment is recognized at acquisition or construction cost, including financial charges incurred on property, plant, and equipment under construction, as well as maintenance costs resulting from scheduled plant outages and estimated costs to remove, to decommission, or to restore assets (see Notes 2.m and 19).

Depreciation is calculated using the straight-line method, over the periods mentioned in Note 12, taking into account the estimated useful lives of the assets, which are reviewed annually.

Leasehold improvements are depreciated over the shorter of the lease contract term and useful life of the property.

h.	*Leases*

•

Finance Leases

Certain lease contracts transfer substantially all the risks and benefits associated with the ownership of an asset to the Company and its subsidiaries. These contracts are characterized as finance leases, and assets thereunder are capitalized at lease commencement at their fair value or, if lower, present value of the minimum lease payments under the contracts. The items recognized as assets are depreciated and amortized using the lower of the straight-line method over the lower of the useful lives applicable to each group of assets or the contract terms, as mentioned in Notes 12 and 13. Financial charges under the finance lease contracts are allocated to profit or loss over the lease contract term, based on the amortized cost and the effective interest rate method of the related lease obligation (see Note 14.h).

•

Operating Leases

There are lease transactions where the risks and benefits associated with the ownership of the asset are not transferred and where there is no purchase option, or the purchase option at the end of the contract is equivalent to the market value of the leased asset. Payments made under an operating lease contract are recognized as cost or expense in the income statement on a straight-line basis over the term of the lease contract (see Note 32.c).

i.	*Intangible Assets*

Intangible assets include assets acquired by the Company and its subsidiaries from third parties, according to the criteria below (see Note 13):

•

Goodwill is carried net of accumulated amortization as of December 31, 2008, when it ceased to be amortized. Goodwill generated since January 1, 2009 is shown as intangible assets corresponding to the positive difference between the amount paid or payable to the seller and the fair value of the identified assets and liabilities assumed of the acquired entity, and is tested annually for impairment. Goodwill is allocated to the business segments, which represent the lowest level that goodwill is monitored by the Company for impairment testing purposes.

•

Bonus disbursements as provided in Ipiranga’s agreements with reseller service stations and major consumers are recognized as distribution rights when paid and amortized using the straight-line method according to the term of the agreement.

•

Other intangible assets acquired from third parties, such as software, technology, and commercial property rights, are measured at the total acquisition cost and amortized using straight-line method, over the periods mentioned in Note 13, taking into account their useful life, which is reviewed annually.

The Company and its subsidiaries have not recognized intangible assets that were generated internally. The Company and its subsidiaries have goodwill and brands acquired in business combinations, which are evaluated as intangible assets with indefinite useful life (see Note 13 items i and vi).

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

j.	*Other Assets*

Other assets are stated at the lower of cost and realizable value, including, if applicable, interest earned, monetary changes and changes in exchange rates incurred or less a provision for loss and, if applicable, adjustment to present value (see Note 2.u).

k.	*Financial Liabilities*

The Company and its subsidiaries’ financial liabilities include trade payables and other payables, loans, debentures, finance leases and derivative financial instruments. Financial liabilities are classified as “financial liabilities at fair value through profit or loss” or “financial liabilities at amortized cost”. The financial liabilities at fair value through profit or loss refer to derivative financial instruments, subscription warrants, and financial liabilities designated as hedged items in a fair value hedge relationship upon initial recognition (see Note 2.c – Fair Value Hedge). The financial liabilities at amortized cost are stated at the initial transaction amount plus related charges and net of amortization and transaction costs. The charges are recognized in profit or loss using the effective interest rate method.

Transaction costs incurred and directly attributable to the activities necessary for contracting loans or for issuing bonds, as well as premiums and discounts upon issuance of debentures and other debt, are allocated to the instrument and amortized to profit or loss over its term, using the effective interest rate method (see Note 14.i). Transaction costs incurred and directly attributable to the issue of shares or other equity instruments are recognized in equity and are not amortized.

l.	*Income and Social Contribution Taxes on Income*

Current and deferred income tax (“IRPJ”) and social contribution on net income tax (“CSLL”) are calculated based on their current rates, considering the value of tax incentives. Taxes are recognized based on the rates of IRPJ and CSLL provided for by the laws enacted on the last day of the reporting period. The current rates in Brazil are 25% for income tax and 9% for social contribution on net income tax. For further details about recognition and realization of IRPJ and CSLL, see Note 9.

m.	*Provision for Asset Retirement Obligation – Fuel Tanks*

The Company and its subsidiaries have the legal obligation to remove Ipiranga’s underground fuel tanks located at Ipiranga-branded service stations after a certain period. The estimated cost of the obligation to remove these fuel tanks is recognized as a liability when the tanks are installed. The estimated cost is recognized in property, plant, and equipment and depreciated over the respective useful lives of the tanks. The amounts recognized as a liability are monetarily restated using the National Consumer Price Index—IPCA until the respective tank is removed (see Note 19). An increase in the estimated cost of the obligation to remove the tanks could result in negative impact in future results. The estimated removal cost is reviewed and updated annually or when there is significant change in its amount and change in the estimated costs are recognized in income when they become known.

n.	*Provisions for Tax, Civil, and Labor Risks*

A provision for tax, civil and labor risks is recognized for quantifiable risks, when the chance of loss is more-likely-than-not in the opinion of management and internal and external legal counsel, and the amounts are recognized based on the evaluation of the outcomes of the legal proceedings (see Note 20).

o.	*Post-Employment Benefits*

Post-employment benefits granted and to be granted to employees, retirees, and pensioners are based on an actuarial calculation prepared by an independent actuary, using the projected unit credit method (see Note 18.b). The actuarial gains and losses are recognized in cumulative other comprehensive income in the “Valuation adjustments” and presented in the statement of shareholders’ equity. Past service cost is recognized in the income statement.

p.	*Other Liabilities*

Other liabilities are stated at known or measurable amounts plus, if applicable, related charges, monetary restatement, and changes in exchange rates incurred. When applicable, other liabilities are recognized at present value, based on interest rates that reflect the term, currency, and risk of each transaction.

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

q.	*Foreign Currency Transactions*

Foreign currency transactions carried out by the Company or its subsidiaries are remeasured into their functional currency at the exchange rate prevailing at the date of each transaction. Outstanding monetary assets and liabilities of the Company and its subsidiaries are translated using the exchange rate at the end of the reporting period. The effect of the difference between those exchange rates is recognized in profit or loss until the conclusion of each transaction.

r.	*Basis for Translation of Interim Financial Information of Foreign Subsidiaries*

Assets and liabilities of the foreign subsidiaries, denominated in currencies other than that of the Company (functional currency: Brazilian Real), which have administrative autonomy, are translated using the exchange rate at the end of the reporting period. Revenues and expenses are translated using the average exchange rate of each year and shareholders’ equity is translated at the historic exchange rate of each transaction affecting shareholders’ equity. Gains and losses resulting from changes in these foreign investments are directly recognized in shareholders’ equity in cumulative other comprehensive income in the “cumulative translation adjustments” and will be recognized in profit or loss if these investments are disposed of. The balance in cumulative other comprehensive income and presented in the shareholders’ equity as cumulative translation adjustments as of June 30, 2016 was a loss of R$ 9,250 (gain of R$ 66,925 as of December 31, 2015).

The foreign subsidiaries with functional currency different from the Company and which have administrative autonomy are listed below:


Subsidiary	Functional currency	Location

Oxiteno México S.A. de C.V.	Mexican Peso	Mexico
Oxiteno Servicios Corporativos S.A. de C.V.	Mexican Peso	Mexico
Oxiteno Servicios Industriales de C.V.	Mexican Peso	Mexico
Oxiteno USA LLC	U.S. Dollar	United States

Oxiteno Andina, C.A.	Bolivar	Venezuela

Oxiteno Uruguay S.A.	U.S. Dollar	Uruguay

The subsidiary Oxiteno Uruguay S.A. (“Oxiteno Uruguay”) determined its functional currency as the U.S. dollar (“US$”), as its sales, purchases of goods, and financing activities are performed substantially in this currency.

According to IAS 29, Venezuela is classified as a hyperinflationary economy. As a result, the financial information of Oxiteno Andina, C.A. (“Oxiteno Andina”) was adjusted by the Venezuelan Consumer Price Index.

On March 9, 2016, the Venezuelan Central Bank issued Foreign Exchange Regulation No. 35, effective from March 10, 2016, altering the Venezuelan foreign exchange markets and regulating the legally recognized types of exchange rates:

a) DIPRO—Tipo de Cambio Protegido (Exchange Protected): Bolivar (“VEF”) is traded at an exchange rate of 9.975 VEF/US$ to buy and 10.00 VEF/US$ for purchase. This rate is applied to importation of essential goods (medicines and food) and raw materials and inputs related to the production of these sectors. This rate is channeled through CENCOEX—Centro Nacional de Comercio Exterior en Venezuela;

b) DICOM—Tipo de Cambio Complementario Flotante de Mercado Supplemental (Floating Market Exchange): Bolivar is traded at variable exchange rate of 628.3434 VEF/US$ for selling and reduced by 0.25% for purchase. This rate is applied to settlement currency of all unforeseen transactions in Foreign Exchange Regulation. This rate is channeled through alternative currency markets.

The types of exchange rates previously regulated by the Foreign Exchange Regulation No. 33 were extinct.

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

Due to the political and economic situation in Venezuela, the Company’s management reassessed the exchange rate used in the translation of financial statements and changed, on December 31, 2015, the rate from SICAD—Sistema Complementario de Administración de Divisas to SIMADI—Sistema Marginal de Divisas, due to the fact that currently this exchange rate is the one that most closely matches the best expression of the Venezuelan economy. Thus, from December 31, 2015, the amounts in Bolivar have been translated to the U.S. dollar at the exchange rate of SIMAD and subsequently translated into Brazilian Reais using the official exchange rate published by the Central Bank of Brazil. Due to the Foreign Exchange Regulation No. 35, from March 10, 2016, the Company began to use the DICOM exchange rate in the translation.

Assets and liabilities of the other foreign subsidiaries, which do not have administrative autonomy, are considered an extension of the activities of their parent company and are translated using the exchange rate at the end of the reporting period. Gains and losses resulting from changes in these foreign investments are directly recognized as financial income or loss. The gain recognized in income for the six-month period ended June 30, 2016 amounted to R$ 5,170 (R$ 1,750 gain for the six-month period ended June 30, 2015).

s.	*Use of Estimates, Assumptions and Judgments*

The preparation of the interim financial information requires the use of estimates, assumptions, and judgments for the accounting of certain assets, liabilities, and income. Therefore, the Company’s and subsidiaries’ management use the best information available at the time of preparation of the interim financial information, as well as the experience of past and current events, also considering assumptions regarding future events. The interim financial information therefore include estimates, assumptions, and judgments related mainly to determining the fair value of financial instruments (Notes 2.c, 2.k, 4, 14 and 31), the determination of the allowance for doubtful accounts (Notes 2.d, 5 and 31), the determination of provisions for losses of inventories (Notes 2.e and 6), the determination of deferred income taxes amounts (Notes 2.l and 9), the determination of control in subsidiaries (Notes 2.f, 2.r, 3 and 11.a), the determination of joint control in joint venture (Notes 2.f, 11.a and 11.b), the determination of significant influence in associates (Notes 2.f and 11.c), the determination of exchange rate used to translation of Oxiteno Andina’ information (Note 2.r), the useful lives of property, plant, and equipment (Notes 2.g and 12), the useful lives of intangible assets, and the determination of the recoverable amount of goodwill (Notes 2.i and 13), provisions for assets retirement obligations (Notes 2.m and 19), provisions for tax, civil, and labor risks (Notes 2.n and 20), estimates for the preparation of actuarial reports (Notes 2.o and 18.b) and the determination of fair value of subscription warrants – indemnification (Notes 22 and 31). The actual result of the transactions and information may differ from their estimates.

t.	*Impairment of Assets*

The Company and its subsidiaries review, at least annually, the existence of any indication that an asset may be impaired. If there is an indication, the Company and its subsidiaries estimate the recoverable amount of the asset. Assets that cannot be evaluated individually are grouped in the smallest group of assets that generate cash flow from continuous use and that are largely independent of cash flows of other assets (cash generating units -“CGU”). The recoverable amount of assets or CGUs corresponds to the greater of their fair value net of applicable direct selling costs and their value in use.

The fair value less costs of disposal is determined by the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date, net of costs of removing the asset, and direct incremental costs to bring an asset into condition for its sale, legal costs, and taxes.

To assess the value in use, the Company and its subsidiaries consider the projections of future cash flows, trends, and outlooks, as well as the effects of obsolescence, demand, competition, and other economic factors. Such cash flows are discounted to their present values using the discount rate before tax that reflects market conditions for the period of impairment testing and the specific risks of the asset or CGU being evaluated. In cases where the expected discounted future cash flows are less than their carrying amount, an impairment loss is recognized for the amount by which the carrying value exceeds the fair value of these assets. Losses for impairment of assets are recognized in profit or loss. In case goodwill has been allocated to a CGU, the recognized losses are first allocated to reduce the corresponding goodwill. If the goodwill is not enough to absorb such losses, the surplus is allocated to the assets on a pro-rata basis. An impairment of goodwill cannot be reversed. For other assets, impairment losses may be reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if the impairment had not been recognized.

No impairment was recognized in the years presented (see Note 13.i).

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

u.	*Adjustment to Present Value*

Some of the Company’s subsidiaries recognized a present value adjustment to Tax on Goods and Services (“ICMS”, the Brazilian VAT) credit balances related to property, plant, and equipment (CIAP). Because recovery of these credits occurs over a 48 month period, the present value adjustment reflects, in the interim financial information, the time value of the ICMS credits to be recovered. The balance of these adjustment to present value totaled R$ 801 as of June 30, 2016 (R$ 109 as of December 31, 2015).

The Company and its subsidiaries reviewed all items classified as non-current and, when relevant, current assets and liabilities, and did not identify the need to recognize other present value adjustments.

v.	*Business Combination*

A business combination is accounted applying the acquisition method. The cost of the acquisition is measured based on the consideration transferred and to be transferred, measured at fair value at the acquisition date. In a business combination, the assets acquired and liabilities assumed are measured in order to classify and allocate them accordingly to the contractual terms, economic circumstances and relevant conditions on the acquisition date. The non-controlling interest in the acquired is measured at fair value or based on its interest in identifiable net assets acquired. Goodwill is measured as the excess of the consideration transferred and to be transferred over the fair value of net assets acquired (identifiable assets and liabilities assumed, net). After the initial recognition, goodwill is measured at cost less any accumulated impairment losses. For impairment testing purposes, goodwill is allocated to the Company’s operating segments. When the cost of the acquisition is lower than the fair value of net assets acquired, a gain is recognized directly in the income statement. Costs related to the acquisition are recorded in the income statement when incurred.

w.	*Statements of Value Added*

As required by Brazilian Corporate Law, the Company and its subsidiaries prepare the individual and consolidated statements of value added (“DVA”) according to CPC 09 – Statement of Value Added, as an integral part of the interim financial information as applicable to publicly-traded companies, and as supplemental information for IFRS, which does not require the presentation of DVA.

x.	*Statements of Cash Flows*

The Company and its subsidiaries prepared its individual and consolidated statements of cash flows in accordance with IAS 7 (CPC 03)—Cash Flow Statement. The Company and its subsidiaries present the interest paid on loans and debentures in financing activities.

y.	*Adoption of the Pronouncements Issued by CPC and IFRS*

The following standards, amendments, and interpretations to IFRS were issued by the IASB but are not yet effective and were not adopted as of June 30, 2016:


	Effective date
• IFRS 9: Financial instrument classification and measurement: includes new requirements for the classification and measurement of financial assets and liabilities, derecognition requirements, new impairment methodology for financial instruments, and new hedge accounting guidance.		2018
• IFRS 15—Revenue from contracts with customers: establish the principles of nature, amount, timing and uncertainty of revenue and cash flow arising from a contract with a customer.		2018
• IFRS 16—Lease: requires lessees record, in the financial statements, a liability reflecting future payments of a lease and the right to use an asset for the lease contracts, except for certain short-term leases and low asset value contracts. The criteria for recognition and measurement of leases in the financial statements of lessors are substantially maintained.		2019

CPC has not yet issued pronouncements equivalent to these IFRS, but is expected to do so before the date they become effective. The adoption of IFRS is subject to prior approval by the CVM. The Company is assessing the potential effects of these standards.

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

z.	*Authorization for Issuance of the Interim Financial Information*

These interim financial information were authorized for issue by the Board of Directors on August 10, 2016.

3.	Principles of Consolidation and Investments in Subsidiaries

The consolidated interim financial information were prepared following the basic principles of consolidation established by IFRS 10 (CPC 36 (R3)). Investments of one company in another, balances of asset and liability accounts, and revenues and expenses were eliminated, as well as the effects of transactions conducted between the companies. Non-controlling interests in subsidiaries are presented within consolidated shareholders’ 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 income 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 income statement and other comprehensive income until the date the parent company loses control.

When necessary, adjustments are made to the interim financial information of subsidiaries to bring their accounting policies into line with the Company’s accounting policies.

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

The consolidated interim financial information includes the following direct and indirect subsidiaries:


			% interest in the share
			06/30/2016				12/31/2015
			Control				Control
	Location	Segment	Direct control		Indirect control		Direct control		Indirect control
Ipiranga Produtos de Petróleo S.A.	Brazil	Ipiranga		100		—		100		—
am/pm Comestíveis Ltda.	Brazil	Ipiranga		—		100		—		100
Centro de Conveniências Millennium Ltda.	Brazil	Ipiranga		—		100		—		100
Icorban—Correspondente Bancário Ltda.	Brazil	Ipiranga		—		100		—		100
Ipiranga Trading Limited	Virgin Islands	Ipiranga		—		100		—		100
Tropical Transportes Ipiranga Ltda.	Brazil	Ipiranga		—		100		—		100
Ipiranga Imobiliária Ltda.	Brazil	Ipiranga		—		100		—		100
Ipiranga Logística Ltda.	Brazil	Ipiranga		—		100		—		100
Oil Trading Importadora e Exportadora Ltda.	Brazil	Ipiranga		—		100		—		100
Companhia Ultragaz S.A.	Brazil	Ultragaz		—		99		—		99
Bahiana Distribuidora de Gás Ltda.	Brazil	Ultragaz		—		100		—		100
Utingás Armazenadora S.A.	Brazil	Ultragaz		—		57		—		57
LPG International Inc.	Cayman Islands	Ultragaz		—		100		—		100
Imaven Imóveis Ltda.	Brazil	Others		—		100		—		100
Imifarma Produtos Farmacêuticos e Cosméticos S.A.	Brazil	Extrafarma		—		100		—		100
Oxiteno S.A. Indústria e Comércio	Brazil	Oxiteno		100		—		100		—
Oxiteno Nordeste S.A. Indústria e Comércio	Brazil	Oxiteno		—		99		—		99
Oxiteno Argentina Sociedad de Responsabilidad Ltda.	Argentina	Oxiteno		—		100		—		100
Oleoquímica Indústria e Comércio de Produtos Químicos Ltda.	Brazil	Oxiteno		—		100		—		100
Oxiteno Uruguay S.A.	Uruguay	Oxiteno		—		100		—		100
Barrington S.L.	Spain	Oxiteno		—		100		—		100
Oxiteno México S.A. de C.V.	Mexico	Oxiteno		—		100		—		100
Oxiteno Servicios Corporativos S.A. de C.V.	Mexico	Oxiteno		—		100		—		100
Oxiteno Servicios Industriales S.A. de C.V.	Mexico	Oxiteno		—		100		—		100
Oxiteno USA LLC	United States	Oxiteno		—		100		—		100
Global Petroleum Products Trading Corp.	Virgin Islands	Oxiteno		—		100		—		100
Oxiteno Overseas Corp.	Virgin Islands	Oxiteno		—		100		—		100
Oxiteno Andina, C.A.	Venezuela	Oxiteno		—		100		—		100
Oxiteno Europe SPRL	Belgium	Oxiteno		—		100		—		100
Oxiteno Colombia S.A.S	Colombia	Oxiteno		—		100		—		100
Oxiteno Shanghai LTD.	China	Oxiteno		—		100		—		100
Empresa Carioca de Produtos Químicos S.A.	Brazil	Oxiteno		—		100		—		100
Ultracargo—Operações Logísticas e Participações Ltda.	Brazil	Ultracargo		100		—		100		—
Terminal Químico de Aratu S.A. – Tequimar	Brazil	Ultracargo		—		99		—		99
SERMA—Ass. dos usuários equip. proc. de dados	Brazil	Others		—		100		—		100

The percentages in the table above are rounded.

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

On June 12, 2016, the Company through its subsidiary Ipiranga Produtos de Petróleo S.A. (“IPP”) signed a sale and purchase agreement for the acquisition of 100% of Alesat Combustíveis S.A. (“ALE”) and the assets integrating its operations. The total value of the acquisition is R$ 2,168 million, which will be reduced by ALE’s net debt as of December 31, 2015 and is subject to working capital and net debt adjustments as of the closing date of the transaction. The value will be paid in domestic currency reduced by ALE’s net debt, by an escrow account in the amount of R$ 300 million in order to indemnify for the outcome arising from liabilities or contingencies and by additional amount for net debt and working capital adjustments. On August 3, 2016 the extraordinary general shareholders’ meeting of Ultrapar approved the transaction. The closing of the acquisition is subject to certain usual precedent conditions in transactions of similar nature, mainly the approval by the Brazilian Antitrust Authority – CADE.

4.	Cash and Cash Equivalents and Financial Investments

Cash equivalents and financial investments, excluding cash and bank deposits, are substantially represented by investments: (i) in Brazil, in certificates of deposit of first-rate financial institutions linked to the Interbank Certificate of Deposit (“CDI”), in repurchase agreement and in short term investments funds, whose portfolio comprised exclusively of Brazilian Federal Government bonds; (ii) outside Brazil, in certificates of deposit of first-rate financial institutions; and (iii) in currency and interest rate hedging instruments.

The financial assets were classified in Note 31, according to their characteristics and intention of the Company and its subsidiaries.

The balance of cash, cash equivalents and financial investments (consolidated) amounted to R$ 3,416,707 as of June 30, 2016 (R$ 3,973,162 as of December 31, 2015) and are distributed as follows:

•

Cash and Cash Equivalents

Cash and cash equivalents are considered: (i) cash and bank deposits, and (ii) highly-liquid short-term investments that are readily convertible into a known amount of cash and are subject to an insignificant risk of change in value.


	Parent				Consolidated
	06/30/2016		12/31/2015		06/30/2016		12/31/2015
Cash and bank deposits
In local currency		115		120		66,214		92,160
In foreign currency		—		—		61,663		99,856
Financial investments considered cash equivalents
In local currency
Fixed-income securities		95,894		47,941		2,282,591		2,497,903
In foreign currency
Fixed-income securities		—		—		92,688		12,974

Total cash and cash equivalents		96,009		48,061		2,503,156		2,702,893

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

•

Financial Investments

The financial investments of the Company and its subsidiaries, which are not classified as cash and cash equivalents, are distributed as follows:


	Parent				Consolidated
	06/30/2016		12/31/2015		06/30/2016		12/31/2015
Financial investments
In local currency
Fixed-income securities and funds		21,342		6,708		686,089		801,587
In foreign currency
Fixed-income securities and funds		—		—		33,287		35,013
Currency and interest rate hedging instruments (a)		—		—		194,175		433,669

Total financial investments		21,342		6,708		913,551		1,270,269

Current		21,342		6,708		789,620		803,304

Non-current		—		—		123,931		466,965

(a)	Accumulated gains, net of income tax (see Note 31).

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

5.	Trade Receivables (Consolidated)

The composition of trade receivables is as follows:


	06/30/2016			12/31/2015
Domestic customers		2,983,481			2,971,019
Reseller financing—Ipiranga		390,602			350,119
Foreign customers		189,141			199,081
(-) Allowance for doubtful accounts		(221,565	)		(200,816	)

Total		3,341,659			3,319,403

Current		3,153,093			3,167,164

Non-current		188,566			152,239

Reseller financing is provided for renovation and upgrading of service stations, purchase of products, and development of the automotive fuels and lubricants distribution market.

The breakdown of trade receivables, gross of allowance for doubtful accounts, is as follows:


					Past due
	Total		Current		less than 30 days		31-60 days		61-90 days		91-180 days		more than 180 days
06/30/2016		3,563,224		3,064,726		102,607		34,660		18,510		49,533		293,188
12/31/2015		3,520,219		3,080,681		113,136		22,834		13,473		30,411		259,684

Movements in the allowance for doubtful accounts are as follows:


Balance as of December 31, 2015	200,816
Additions	24,591
Write-offs	(3,842	)

Balance as of June 30, 2016	221,565

For further information about allowance for doubtful accounts see Note 31 – Customer credit risk.

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

6.	Inventories (Consolidated)

The composition of inventories is as follows:


	06/30/2016							12/31/2015
	Cost		Provision for losses			Net balance		Cost		Provision for losses			Net balance
Finished goods		369,096		(12,347	)		356,749		400,994		(7,649	)		393,345
Work in process		2,576		—			2,576		1,723		—			1,723
Raw materials		275,655		(1,148	)		274,507		257,700		(1,026	)		256,674
Liquefied petroleum gas (LPG)		46,335		(5,761	)		40,574		58,875		(5,761	)		53,114
Fuels, lubricants, and greases		1,162,234		(3,004	)		1,159,230		1,205,598		(729	)		1,204,869
Consumable materials and other items for resale		115,716		(7,118	)		108,598		103,013		(9,259	)		93,754
Pharmaceutical, hygiene, and beauty products		346,123		(12,545	)		333,578		303,603		(9,568	)		294,035
Advances to suppliers		130,205		—			130,205		171,726		—			171,726
Properties for resale		26,143		(207	)		25,936		25,997		—			25,997

		2,474,083		(42,130	)		2,431,953		2,529,229		(33,992	)		2,495,237

Movements in the provision for losses are as follows:


Balance as of December 31, 2015			33,992
Additions to net realizable value adjustment			4,260
Additions of obsolescence and other losses			3,878

Balance as of June 30, 2016			42,130

The breakdown of provisions for losses related to inventories is shown in the table below:


	06/30/2016		12/31/2015
Net realizable value adjustment		18,397		14,137
Obsolescence and other losses		23,733		19,855

Total		42,130		33,992

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

7.	Recoverable Taxes

Recoverable taxes are substantially represented by credits of State VAT (ICMS), Contribution for Social Security Financing (COFINS), Social Integration Program (PIS), Income Tax (IRPJ), and Social Contribution (CSLL).


	Parent				Consolidated
	06/30/2016		12/31/2015		06/30/2016			12/31/2015
IRPJ and CSLL		61,874		52,055		165,209			197,890
ICMS		—		—		421,803			350,325
Provision for ICMS losses ⁽¹⁾		—		—		(66,662	)		(64,891	)
PIS and COFINS		—		—		100,811			248,254
Value-Added Tax (IVA) of subsidiaries Oxiteno Mexico, Oxiteno Andina and Oxiteno Uruguay		—		—		18,823			22,791
Excise tax—IPI				—		2,427			4,542
Others		—		1		4,387			5,316

Total		61,874		52,056		646,798			764,227

Current		49,063		48,019		498,273			628,778

Non-current		12,811		4,037		148,525			135,449

⁽¹⁾	The provision for ICMS losses relates to tax credits that the subsidiaries believe will not be utilized or offset in the future, based on its estimative, and its movements are as follows:


Balance as of December 31, 2015			64,891
Write-offs, additions and reversals, net			1,771

Balance as of June 30, 2016			66,662

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

8.	Related Parties

a.	*Related Parties*

•

Parent Company


	Assets		Liabilities
	Debentures ⁽¹⁾		Account payable		Financial income
Imifarma Produtos Farmacêuticos e Cosméticos S.A.		—		689		—
Ipiranga Produtos de Petróleo S.A.		772,510		—		67,790

Total as of June 30, 2016		772,510		689		67,790


	Assets		Liabilities
	Debentures ⁽²⁾		Account payable		Financial income
Ipiranga Produtos de Petróleo S.A.		782,404		—		67,384
Imifarma Produtos Farmacêuticos e Cosméticos S.A.		—		5		—

Total as of December 31, 2015		782,404		5

Total as of June 30, 2015						67,384

⁽¹⁾

In March 2016, the subsidiary IPP made its third private offering in a single series of 75 debentures at face value of R$ 10,000,000.00 (ten million Brazilian Reais), nonconvertible into shares, unsecured debentures. The Company subscribed the total of debentures with maturity on March 31, 2021 and semiannual remuneration linked to CDI.

⁽²⁾

In March 2009, the subsidiary IPP made its first private offering in a single series of 108 debentures at face value of R$ 10,000,000.00 (ten million Brazilian Reais), nonconvertible into shares, unsecured debentures. The Company subscribed 75 debentures with maturity on March 31, 2016 and semiannual remuneration linked to CDI. The debentures subscribed by Ultrapar were settled on the maturity date.

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

•

Consolidated

Balances and transactions between the Company and its subsidiaries have been eliminated in consolidation and are not disclosed in this note. The balances and transactions between the Company and its subsidiaries with other related parties are disclosed below:


	Loans				Commercial transactions
	Assets		Liabilities		Receivables⁽¹⁾		Payables⁽¹⁾
Oxicap Indústria de Gases Ltda.		—		—		—		1,612
Química da Bahia Indústria e Comércio S.A.		—		3,046		—		—
ConectCar Soluções de Mobilidade Eletrônica S.A.		—		—		11,496		2,491
Refinaria de Petróleo Riograndense S.A.		—		—		—		4,375
Others		490		1,326		—		—

Total as of June 30, 2016		490		4,372		11,496		8,478


	Loans				Commercial transactions
	Assets		Liabilities		Receivables⁽¹⁾		Payables⁽¹⁾
Oxicap Indústria de Gases Ltda.		—		—		—		1,506
Química da Bahia Indústria e Comércio S.A.		—		3,046		—		—
ConectCar Soluções de Mobilidade Eletrônica S.A.		—		—		12,553		6,562
Refinaria de Petróleo Riograndense S.A.		—		—		—		23,784
Others		490		1,326		—		—

Total as of December 31, 2015		490		4,372		12,553		31,852

⁽¹⁾	Included in “trade receivables” and “trade payables,” respectively.


	Commercial transactions
	Sales and services		Purchases
Oxicap Indústria de Gases Ltda.		3		8,922
Refinaria de Petróleo Riograndense S.A.		—		542,157
ConectCar Soluções de Mobilidade Eletrônica S.A.		5,757		—

Total as of June 30, 2016		5,760		551,079


	Commercial transactions
	Sales and services		Purchases
Oxicap Indústria de Gases Ltda.		3		7,226
Refinaria de Petróleo Riograndense S.A.		—		330,400
ConectCar Soluções de Mobilidade Eletrônica S.A.		4,432		—

Total as of June 30, 2015		4,435		337,626

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

Purchase and sale transactions relate substantially to the purchase of raw materials, feedstock, transportation, and storage services based on similar market prices and terms with customers and suppliers with comparable operational performance. The above operations related to ConectCar Soluções de Mobilidade Eletrônica S.A. (“ConectCar”) refer to the adhesion to Ipiranga’s marketing plan and services provided. Borrowing agreements are for an indeterminate period and do not contain interest clauses. In the opinion of the Company and its subsidiaries’ management, transactions with related parties are not subject to credit risk, which is why no allowance for doubtful accounts or collateral is provided. Collateral provided by the Company in loans of subsidiaries and affiliates are mentioned in Note 14.j). Intercompany loans are contracted in light of temporary cash surpluses or deficits of the Company, its subsidiaries, and its associates.

b.	*Key executives (Consolidated)*

The Company’s compensation strategy combines short and long-term elements, following the principles of alignment of interests and of maintaining a competitive compensation, and is aimed at retaining key officers and remunerating them adequately according to their attributed responsibilities and the value created to the Company and its shareholders.

Short-term compensation is comprised of: (a) fixed monthly compensation paid with the objective of rewarding the executive’s experience, responsibility, and his/her position’s complexity, and includes salary and benefits such as medical coverage, check-up, life insurance, and others; (b) variable compensation paid annually with the objective of aligning the executive’s and the Company’s objectives, which is linked to: (i) the business performance measured through its economic value creation and (ii) the fulfillment of individual annual goals that are based on the strategic plan and are focused on expansion and operational excellence projects, people development and market positioning, among others. In addition, the chief executive officer is entitled to additional long term variable compensation relating to the Company’s shares’ performance between 2013 and 2018, reflecting the target of more than doubling the share value of the Company in 5 years. Further details about the Deferred Stock Plan are contained in Note 8.c) and about post-employment benefits in Note 18.b).

The Company and its subsidiaries recognized expenses for compensation of its key executives (Company’s directors and executive officers) as shown below:


	06/30/2016		06/30/2015
Short-term compensation		21,053		15,477
Stock compensation		2,758		3,136
Post-employment benefits		1,674		1,336
Long-term compensation		1,220		1,109

Total		26,705		21,058

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

c.	*Deferred Stock Plan*

On April 27, 2001, the General Shareholders’ Meeting approved a benefit plan to members of management and employees in executive positions in the Company and its subsidiaries. On November 26, 2003, the Extraordinary General Shareholders’ Meeting approved certain amendments to the original plan of 2001 (the “Deferred Stock Plan”). In the Deferred Stock Plan, certain members of management of the Company and its subsidiaries have the voting and economic rights of shares and the ownership of these shares is retained by the subsidiaries of the Company. The Deferred Stock Plan provides for the transfer of the ownership of the shares to those eligible members of management after five to ten years from the initial concession of the rights subject to uninterrupted employment of the participant during the period. The total number of shares to be used for the Deferred Stock Plan is subject to the availability in treasury of such shares. It is incumbent on Ultrapar’s executive officers to select the members of management eligible for the plan and propose the number of shares in each case for approval by the Board of Directors. The fair value of the awards were determined on the grant date based on the market value of the shares on the BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros (“BM&FBOVESPA”), the Brazilian Securities, Commodities and Futures Exchange and the amounts are amortized between five and ten years from the grant date.

The table below summarizes shares granted to the Company and its subsidiaries’ management:


Grant date	Balance of number of shares granted		Vesting period		Market price of shares on the grant date (in R$ per share)		Total grant costs, including taxes		Accumulated recognized grant costs			Accumulated unrecognized grant costs
March 4, 2016		190,000		2021 to 2023		65.43		17,147		(971	)		16,176
December 9, 2014		590,000		2019 to 2021		50.64		41,210		(11,082	)		30,128
March 5, 2014		83,400		2019 to 2021		52.15		5,999		(2,377	)		3,622
February 3, 2014		150,000		2018 to 2020		55.36		11,454		(5,690	)		5,764
November 7, 2012		320,000		2017 to 2019		42.90		19,098		(11,955	)		7,143
December 14, 2011		120,000		2016 to 2018		31.85		5,272		(4,104	)		1,168
November 10, 2010		173,336		2015 to 2017		26.78		9,602		(8,815	)		787
December 16, 2009		83,328		2014 to 2016		20.75		7,155		(7,013	)		142
November 9, 2006		207,200		2016		11.62		3,322		(3,212	)		110

		1,917,264						120,259		(55,219	)		65,040

For the six-month period ended June 30, 2016, the amortization in the amount of R$ 9,045 (R$ 8,344 for the six-month period ended June 30, 2015) was recognized as a general and administrative expense.

The table below summarizes the changes of number of shares granted:


Balance as of December 31, 2015			1,727,264
Shares granted on March 4, 2016			190,000

Balance as of June 30, 2016			1,917,264

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

9.	Income and Social Contribution Taxes

a.	*Deferred Income and Social Contribution Taxes*

The Company and its subsidiaries recognize deferred tax assets and liabilities which are not subject to the statute of limitations, resulting from tax loss carryforwards, temporary differences, negative tax bases and revaluation of property, plant, and equipment, among others. Deferred tax assets are sustained by the continued profitability of their operations. Deferred IRPJ and CSLL are recognized under the following main categories:


	Parent				Consolidated
	06/30/2016		12/31/2015		06/30/2016		12/31/2015
Assets—Deferred income and social contribution taxes on:
Provision for impairment of assets		—		—		46,010		41,428
Provisions for tax, civil, and labor risks		26		22		149,827		140,707
Provision for post-employment benefits		—		—		43,752		42,297
Provision for differences between cash and accrual basis		—		—		21,391		989
Goodwill		—		—		25,130		33,894
Business combination – fiscal basis vs. accounting basis of goodwill		—		—		72,063		72,691
Provision for asset retirement obligation		—		—		23,298		22,418
Other provisions		24,218		8,658		107,963		145,336
Tax losses and negative basis for social contribution carryforwards (d)		—		—		74,750		59,233

Total		24,244		8,680		564,184		558,993

Liabilities—Deferred income and social contribution taxes on:
Revaluation of property, plant, and equipment		—		—		2,822		2,887
Lease		—		—		4,159		4,426
Provision for differences between cash and accrual basis		—		—		86,262		184,951
Provision for goodwill/negative goodwill		—		—		50,845		17,794
Business combination – fair value of assets		—		—		46,644		47,110
Temporary differences of foreign subsidiaries		—		—		4,529		2,855
Other provisions		—		—		2,681		5,981

Total		—		—		197,942		266,004

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

Changes in the net balance of deferred IRPJ and CSLL are as follows:


	06/30/2016			06/30/2015
Initial balance		292,989			309,726
Deferred IRPJ and CSLL recognized in income of the period		76,623			18,794
Others		(3,370	)		1,948

Final balance		366,242			330,468

The estimated recovery of deferred tax assets relating to IRPJ and CSLL is stated as follows:


	Parent		Consolidated
Up to 1 year		—		177,152
From 1 to 2 years		4,719		83,583
From 2 to 3 years		4,745		45,598
From 3 to 5 years		9,439		71,097
From 5 to 7 years		4,968		126,312
From 7 to 10 years		373		60,442

		24,244		564,184

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

b.	*Reconciliation of Income and Social Contribution Taxes*

IRPJ and CSLL are reconciled to the statutory tax rates as follows:


	Parent						Consolidated
	06/30/2016			06/30/2015			06/30/2016			06/30/2015
Income before taxes and share of profit (loss) of subsidiaries, joint ventures, and associates		(34,179	)		24,380			1,078,032			1,045,832
Statutory tax rates—%		34			34			34			34

Income and social contribution taxes at the statutory tax rates		11,621			(8,289	)		(366,531	)		(355,583	)

Adjustments to the statutory income and social contribution taxes:
Nondeductible expenses (i)		(109	)		(28	)		(23,944	)		(21,121	)
Nontaxable revenues (ii)		—			—			2,290			2,127
Adjustment to estimated income (iii)		—			—			7,271			6,555
Interest on equity (iv)		(364	)		—			(364	)		—
Other adjustments		4			—			2,575			2,023

Income and social contribution taxes before tax incentives		11,152			(8,317	)		(378,703	)		(365,999	)

Tax incentives—SUDENE		—			—			52,600			37,322

Income and social contribution taxes in the income statement		11,152			(8,317	)		(326,103	)		(328,677	)

Current		(4,412	)		(21,230	)		(455,326	)		(384,793	)
Deferred		15,564			12,913			76,623			18,794
Tax incentives—SUDENE		—			—			52,600			37,322
Effective IRPJ and CSLL rates—%		32.6			34.1			30.2			31.4

(i)	Nondeductible expenses consist of certain expenses that cannot be deducted for tax purposes under applicable tax legislation, such as expenses with fines, donations, gifts, losses of assets, negative effects of foreign subsidiaries and certain provisions;

(ii)	Nontaxable revenues consist of certain gains and income that are not taxable under applicable tax legislation, such as the reimbursement of taxes and the reversal of certain provisions;

(iii)

Brazilian tax law allows for an alternative method of taxation for companies that generated gross revenues of up to R$ 78 million in their previous fiscal year. Certain subsidiaries of the Company adopted this alternative form of taxation, whereby income and social contribution taxes are calculated on a basis equal to 32% of operating revenues, as opposed to being calculated based on the effective taxable income of these subsidiaries. The adjustment to estimated income represents the difference between the taxation under this alternative method and the income and social contribution taxes that would have been paid based on the effective statutory rate applied to the taxable income of these subsidiaries; and

(iv)	Interest on equity is an option foreseen in Brazilian corporate law to distribute profits to shareholders, calculated based on the long-term interest rate (“TJLP”), which does not affect the income statement, but is deductible for purposes of IRPJ and CSLL.

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

c.	*Tax Incentives—SUDENE*

The following subsidiaries are entitled to federal tax benefits providing for IRPJ reduction under the program for development of northeastern Brazil operated by the Superintendency for the Development of the Northeast (“SUDENE”):


Subsidiary	Units	Incentive—%		Expiration
Oxiteno Nordeste S.A. Indústria e Comércio	Camaçari plant		75		2016
Bahiana Distribuidora de Gás Ltda.	Aracaju base		75		2017
	Suape base		75		2018
	Mataripe base ⁽¹⁾		75		2024
	Caucaia base ⁽²⁾		75		2025
Terminal Químico de Aratu S.A. – Tequimar	Suape terminal		75		2020
	Aratu terminal		75		2022
Oleoquímica Indústria e Comércio de Produtos Químicos Ltda.	Camaçari plant		75		2021

⁽¹⁾

Due to modernization realized in the Mataripe base, SUDENE approved the 75% income tax reduction until 2024 through an appraisal report issued on December 30, 2015. On January 19, 2016, the constitutive benefit appraisal report was forwarded to the Brazilian Federal Revenue Service for approval within a term of 120 days. As a result of Brazilian Federal Revenue Service of exceeding the deadline to approve the constitutive benefit appraisal, the income tax reduction was recognized by the subsidiary in the income statment in 2016, in the total amount of R$ 11,676 with retroactive effect to January 2015.

⁽²⁾

Due to modernization realized in the Caucaia base, SUDENE approved the 75% income tax reduction until 2025 through an appraisal report issued on June 1, 2016. On June 15, 2016, the constitutive benefit appraisal report was forwarded to the Brazilian Federal Revenue Service for approval within a term of 120 days.

On December 30, 2014, the subsidiary Terminal Químico de Aratu S.A.—Tequimar (“Tequimar”) filed a request at SUDENE requiring the income tax reduction incentive, due to the implementation of the Itaqui Terminal in São Luis—Maranhão. The subsidiary is awaiting for SUDENE’s pronouncement, which has no deadline to take place.

d.	*Income and Social Contribution Taxes Carryforwards*

As of June 30, 2016, certain subsidiaries of the Company had tax loss carryforwards related to income tax (IRPJ) of R$ 233,124 (R$ 190,359 as of December 31, 2015) and negative basis of CSLL of R$ 182,988 (R$ 129,368 as of December 31, 2015), whose compensations are limited to 30% of taxable income in a given tax year, which do not expire. Based on these values, the Company and its subsidiaries recognized deferred income and social contribution tax assets in the amount of R$ 74,750 as of June 30, 2016 (R$ 59,233 as of December 31, 2015).

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

10.

Prepaid Expenses (Consolidated)


	06/30/2016		12/31/2015
Rents		121,062		114,439
Deferred Stock Plan, net (see Note 8.c)		52,426		45,889
Advertising and publicity		45,648		25,195
Insurance premiums		25,142		24,644
Software maintenance		16,296		8,937
Purchases of meal and transportation tickets		1,747		1,757
Taxes and other prepaid expenses		10,823		7,279

		273,144		228,140

Current		115,573		81,476

Non-current		157,571		146,664

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

11.

Investments

a.	*Subsidiaries and Joint Venture (Parent Company)*

The table below presents the full amounts of balance sheets and income statements of subsidiaries and joint venture:


	06/30/2016
	Subsidiaries							Joint-venture
	Ultracargo—Operações Logísticas e Participações Ltda.		Oxiteno S.A. Indústria e Comércio			Ipiranga Produtos de Petróleo S.A.		Refinaria de Petróleo Riograndense S.A.
Number of shares or units held		11,839,764		35,102,127			224,467,228,244		5,078,888
Assets		1,133,710		3,418,811			12,800,382		429,716
Liabilities		4,245		440,394			8,769,873		339,212
Shareholders’ equity		1,129,465		2,978,476	^(*)		4,030,509		90,504
Net revenue from sales and services		—		605,353			33,377,445		745,845
Net income for the period		40,373		198,859	^(*)		520,428		38,384
% of capital held		100		100			100		33


	12/31/2015
	Subsidiaries							Joint-venture
	Ultracargo—Operações Logísticas e Participações Ltda.		Oxiteno S.A. Indústria e Comércio			Ipiranga Produtos de Petróleo S.A.		Refinaria de Petróleo Riograndense S.A.
Number of shares or units held		11,839,764		35,102,127			224,467,228,244		5,078,888
Assets		1,093,260		3,469,471			13,599,752		348,217
Liabilities		4,168		534,215			10,004,718		253,306
Shareholders’ equity		1,089,092		2,935,315	^(*)		3,595,034		94,911
% of capital held		100		100			100		33


	06/30/2015
	Subsidiaries									Joint-venture
	Ultracargo—Operações Logísticas e Participações Ltda.		Oxiteno S.A. Indústria e Comércio			Ipiranga Produtos de Petróleo S.A.		Isa-Sul Administração e Participações Ltda.		Refinaria de Petróleo Riograndense S.A.
Number of shares or units held		11,839,764		35,102,127			224,467,228,244		995,696,017		5,078,888
Net revenue from sales and services		—		552,708			31,054,920		8,429		492,731
Net income (loss) for the period		(6,085)		238,043	^(*)		452,452		4,440		25,706
% of capital held		100		100			100		99		33

(*)	adjusted for intercompany unrealized profits.

The percentages in the table above are rounded.

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

The financial information from our business segments is detailed in Note 30.

Balances and changes in subsidiaries and joint venture are as follows:


	Investments in subsidiaries											Joint-venture
	Ultracargo—Operações Logísticas e Participações Ltda.		Oxiteno S.A.— Indústria e Comércio			Ipiranga Produtos de Petróleo S.A.			Total			Refinaria de Petróleo Riograndense S.A.			Total
Balance as of December 31, 2015		1,089,092		2,935,315			3,595,034			7,619,441			31,514			7,650,955
Share of profit of subsidiaries and joint venture		40,373		198,859			520,428			759,660			12,745			772,405
Dividends and interest on equity (gross)		—		(79,523	)		—			(79,523	)		(4,299	)		(83,822	)
Tax liabilities on equity- method revaluation reserve		—		—			(21	)		(21	)		—			(21	)
Valuation adjustment of subsidiaries		—		—			(84,932	)		(84,932	)		(9,909	)		(94,841	)
Translation adjustments of foreign-based subsidiaries		—		(76,175	)		—			(76,175	)		—			(76,175	)

Balance as of June 30, 2016		1,129,465		2,978,476			4,030,509			8,138,450			30,051			8,168,501


	Investments in subsidiaries														Joint-venture
	Ultracargo—Operações Logísticas e Participações Ltda.			Oxiteno S.A.— Indústria e Comércio			Ipiranga Produtos de Petróleo S.A.			Isa-Sul Administração e Participações Ltda.		Total			Refinaria de Petróleo Riograndense S.A.			Total
Balance as of December 31, 2014		1,084,893			3,020,625			2,013,962			980,044		7,099,524			24,076			7,123,600
Share of profit of subsidiaries and joint ventures		(6,085	)		238,043			452,452			4,424		688,834			8,535			697,369
Dividends and interest on equity (gross)		—			(291,326	)		(142,302	)		—		(433,628	)		—			(433,628	)
Tax liabilities on equity- method revaluation reserve		—			—			(12	)		—		(12	)		—			(12	)
Valuation adjustment of subsidiaries		—			(51	)		(12	)		—		(63	)		(853	)		(916	)
Translation adjustments of foreign-based subsidiaries		—			26,011			—			—		26,011			—			26,011

Balance as of June 30, 2015		1,078,808			2,993,302			2,324,088			984,468		7,380,666			31,758			7,412,424

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

b.	*Joint Ventures (Consolidated)*

The Company holds an interest in Refinaria de Petróleo Riograndense (“RPR”), which is primarily engaged in oil refining.

The subsidiary Ultracargo – Operações Logísticas e Participações Ltda. (“Ultracargo Participações”) holds an interest in União Vopak – Armazéns Gerais Ltda. (“União Vopak”), which is primarily engaged in liquid bulk storage in the port of Paranaguá.

The subsidiary IPP holds an interest in ConectCar, formed in November 2012, which is primarily engaged in electronic payment of tolls and parking in the States of Alagoas, Bahia, Ceará, Espírito Santo, Goiás, Mato Grosso, Mato Grosso do Sul, Minas Gerais, Paraná, Pernambuco, Rio de Janeiro, Rio Grande do Sul, Santa Catarina, São Paulo and Distrito Federal, and in the segment of electronic payment for fuel throughout all the Brazilian territory.

These investments are accounted for under the equity method of accounting based on their interim financial information as of June 30, 2016.

Balances and changes in joint ventures are as follows:


	Movements in investments
	Uniăo Vopak			RPR			ConectCar			Total
Balance as of December 31, 2015		4,545			31,514			43,318			79,377
Capital increase		—			—			25,781			25,781
Valuation adjustments		—			(9,909	)		—			(9,909	)
Dividends and interest on equity (gross)		—			(4,299	)		—			(4,299	)
Share of profit (loss) of joint ventures		(262	)		12,745			(10,643	)		1,840

Balance as of June 30, 2016		4,283			30,051			58,456			92,790


	Movements in investments
	Uniăo Vopak		RPR			ConectCar			Total
Balance as of December 31, 2014		4,960		24,076			25,472			54,508
Capital increase		—		—			20,100			20,100
Valuation adjustments		—		(853	)		—			(853	)
Share of profit (loss) of joint ventures		326		8,535			(10,980	)		(2,119	)

Balance as of June 30, 2015		5,286		31,758			34,592			71,636

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

The table below presents the full amounts of balance sheets and income statements of joint ventures:


	06/30/2016
	Uniăo Vopak			RPR			ConectCar
Current assets		4,520			317,022			74,850
Non-current assets		6,838			112,694			99,191
Current liabilities		1,466			277,721			56,583
Non-current liabilities		1,326			61,491			546
Shareholders’ equity		8,566			90,504			116,912
Net revenue from sales and services		6,098			745,845			18,811
Costs and operating expenses		(7,088	)		(689,924	)		(51,397	)
Net financial income and income and social contribution taxes		466			(17,537	)		11,300
Net income (loss)		(524	)		38,384			(21,286	)
Number of shares or units held		29,995			5,078,888			124,360,500
% of capital held		50			33			50


	12/31/2015
	Uniăo Vopak		RPR		ConectCar
Current assets		3,360		234,094		59,599
Non-current assets		7,300		114,123		85,195
Current liabilities		1,570		176,134		62,158
Non-current liabilities		—		77,172		—
Shareholders’ equity		9,090		94,911		82,636
Number of shares or units held		29,995		5,078,888		94,579,500
% of capital held		50		33		50


	06/30/2015
	Uniăo Vopak			RPR			ConectCar
Net revenue from sales and services		5,752			492,731			7,872
Costs and operating expenses		(4,910	)		(449,996	)		(41,577	)
Net financial income and income and social contribution taxes		(190	)		(17,029	)		11,745
Net income (loss)		652			25,706			(21,960	)
Number of shares or units held		29,995			5,078,888			82,500,000
% of capital held		50			33			50

The percentages in the table above are rounded.

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

c.	*Associates (Consolidated)*

Subsidiary IPP holds an interest in Transportadora Sulbrasileira de Gás S.A., which is primarily engaged in natural gas transportation services.

Subsidiary Oxiteno S.A. Indústria e Comércio (“Oxiteno S.A”) holds an interest in Oxicap Indústria de Gases Ltda. (“Oxicap”), which is primarily engaged in the supply of nitrogen and oxygen for its shareholders in the Mauá petrochemical complex.

Subsidiary Oxiteno Nordeste S.A. Indústria e Comércio (“Oxiteno Nordeste”) holds an interest in Química da Bahia Indústria e Comércio S.A., which is primarily engaged in manufacturing, marketing, and processing of chemicals. The operations of this associate are currently suspended.

Subsidiary Companhia Ultragaz S.A. (“Cia. Ultragaz”) holds an interest in Metalúrgica Plus S.A., which is primarily engaged in the manufacture and trading of LPG containers. The operations of this associate are currently suspended.

Subsidiary IPP holds an interest in Plenogás Distribuidora de Gás S.A., which is primarily engaged in the marketing of LPG. The operations of this associate are currently suspended.

The investment of subsidiary Oxiteno S.A. in the associate Oxicap is accounted for under the equity method of accounting based on its financial information as of May 31, 2016, while the other associates are valued based on the interim financial information as of June 30, 2016.

Balances and changes in associates are as follows:


	Movements in investments
	Transportadora Sulbrasileira de Gás S.A.			Oxicap Indústria de Gases Ltda.		Química da Bahia Indústria e Comércio S.A.			Metalúrgica Plus S.A.			Total
Balance as of December 31, 2015		5,743			12,000		3,684			110			21,537
Dividends received		(352	)		—		—			—			(352	)
Share of profit (loss) of associates		594			614		(6	)		(1	)		1,201

Balance as of June 30, 2016		5,985			12,614		3,678			109			22,386


	Movements in investments
	Transportadora Sulbrasileira de Gás S.A.			Oxicap Indústria de Gases Ltda.			Química da Bahia Indústria e Comércio S.A.			Metalúrgica Plus S.A.			Total
Balance as of December 31, 2014		6,212			3,090			3,676			165			13,143
Capital increase		—			10,368	⁽¹⁾		—			—			10,368
Dividends received		(901	)		—			—			—			(901	)
Share of profit (loss) of associates		1,051			1,623			(1	)		(26	)		2,647

Balance as of June 30, 2015		6,362			15,081			3,675			139			25,257

⁽¹⁾	As mentioned in Note 8.a) – Consolidated, in the 1^st quarter 2015, Oxiteno realized a capital increase in Oxicap. Thus the interest in the associate has been changed from 25% to 15% approximately.

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

The table below presents the full amounts of balance sheets and income statements of associates:


	06/30/2016
	Transportadora Sulbrasileira de Gás S.A.			Oxicap Indústria de Gases Ltda.			Química da Bahia Indústria e Comércio S.A.			Metalúrgica Plus S.A.			Plenogás Distribuidora de Gás S.A.
Current assets		8,261			21,487			44			664			1,132
Non-current assets		18,173			74,788			10,420			1,681			2,821
Current liabilities		2,161			7,698			—			403			66
Non-current liabilities		332			4,967			3,109			1,616			1,750
Shareholders’ equity		23,941			83,610			7,355			326			2,137
Net revenue from sales and services		5,006			25,559			—			—			—
Costs, operating expenses, and income		(2,637	)		(19,669	)		(35	)		(89	)		472
Net financial income and income and social contribution taxes		5			(2,202	)		24			(6	)		28
Net income (loss) for the period		2,374			3,688			(11	)		(95	)		500
Number of shares or units held		20,124,996			1,987			1,493,120			3,000			1,384,308
% of capital held		25			15			50			33			33


	12/31/2015
	Transportadora Sulbrasileira de Gás S.A.		Oxicap Indústria de Gases Ltda.		Química da Bahia Indústria e Comércio S.A.		Metalúrgica Plus S.A.		Plenogás Distribuidora de Gás S.A.
Current assets		5,175		13,390		73		759		691
Non-current assets		18,773		79,203		10,403		1,681		2,830
Current liabilities		644		8,682		—		403		101
Non-current liabilities		332		4,371		3,109		1,708		1,777
Shareholders’ equity		22,972		79,540		7,367		329		1,643
Number of shares or units held		20,124,996		1,987		1,493,120		3,000		1,384,308
% of capital held		25		15		50		33		33

The percentages in the table above are rounded.

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)


	06/30/2015
	Transportadora Sulbrasileira de Gás S.A.			Oxicap Indústria de Gases Ltda.			Química da Bahia Indústria e Comércio S.A.			Metalúrgica Plus S.A.			Plenogás Distribuidora de Gás S.A.
Net revenue from sales and services		6,761			18,375			—			—			—
Costs, operating expenses, and income		(2,417	)		(9,375	)		(28	)		(84	)		486
Net financial income and income and social contribution taxes		(40	)		448			26			6			(1	)
Net income (loss) for the period		4,304			9,448			(2	)		(78	)		485
Number of shares or units held		20,124,996			1,987			1,493,120			3,000			1,384,308
% of capital held		25			15			50			33			33

The percentages in the table above are rounded.

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

12.

Property, Plant, and Equipment (Consolidated)

Balances and changes in property, plant, and equipment are as follows:


	Weighted average useful life (years)		Balance on 12/31/2015			Additions			Depreciation			Transfer			Write-offs and disposals			Effect of foreign currency exchange rate variation			Balance on 06/30/2016
Cost:
Land		—		524,159			—			—			303			(17	)		(4,454	)		519,991
Buildings		30		1,382,603			1,929			—			37,098			(43	)		(26,130	)		1,395,457
Leasehold improvements		10		701,183			5,822			—			41,750			(935	)		(5	)		747,815
Machinery and equipment		13		3,991,839			53,072			—			62,547			(5,510	)		(77,523	)		4,024,425
Automotive fuel/lubricant distribution equipment and facilities		14		2,282,462			42,431			—			22,291			(14,833	)		—			2,332,351
LPG tanks and bottles		11		541,351			79,454			—			772			(16,281	)		—			605,296
Vehicles		7		258,776			8,780			—			811			(7,961	)		(742	)		259,664
Furniture and utensils		9		170,695			9,157			—			3,213			(720	)		(2,515	)		179,830
Construction in progress		—		437,533			176,068			—			(171,411	)		(417	)		(16,878	)		424,895
Advances to suppliers		—		12,125			33,231			—			(3,967	)		—			(4,924	)		36,465
Imports in progress		—		1,201			4,464			—			(452	)		—			(289	)		4,924
IT equipment		5		260,685			6,699			—			2,003			(341	)		(1,248	)		267,798

				10,564,612			421,107			—			(5,042	)		(47,058	)		(134,708	)		10,798,911

Accumulated depreciation:
Buildings				(591,831	)		—			(21,690	)		13			20			6,875			(606,613	)
Leasehold improvements				(359,117	)		—			(26,397	)		(13	)		836			5			(384,686	)
Machinery and equipment				(2,241,244	)		—			(120,887	)		2			6,134			37,383			(2,318,612	)
Automotive fuel/lubricant distribution equipment and facilities				(1,270,797	)		—			(64,251	)		—			12,152			—			(1,322,896	)
LPG tanks and bottles				(249,234	)		—			(19,432	)		—			7,277			—			(261,389	)
Vehicles				(92,457	)		—			(10,116	)		—			4,703			390			(97,480	)
Furniture and utensils				(110,259	)		—			(5,335	)		—			681			1,280			(113,633	)
IT equipment				(203,793	)		—			(9,491	)		2			319			981			(211,982	)

				(5,118,732	)		—			(277,599	)		4			32,122			46,914			(5,317,291	)

Provision for losses:
Advances to suppliers				(83	)		—			—			—			—			—			(83	)
Land				(197	)		—			—			—			—			—			(197	)
Leasehold improvements				(659	)		—			—			—			—			111			(548	)
Machinery and equipment				(4,739	)		(143	)		—			—			199			374			(4,309	)
Automotive fuel/lubricant distribution equipment and facilities				(1,306	)		—			—			—			438			—			(868	)
Furniture and utensils				(1	)		—			—			—			—			—			(1	)

				(6,985	)		(143	)		—			—			637			485			(6,006	)

Net amount				5,438,895			420,964			(277,599	)		(5,038	)		(14,299	)		(87,309	)		5,475,614

Construction in progress relates substantially to expansions, renovations, construction and upgrade of industrial facilities, terminals, stores, service stations and distribution bases.

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

Advances to suppliers of property, plant, and equipment relate basically to manufacturing of assets for expansion of plants, terminals, stores and bases, modernization of service stations, and acquisition of real estate.

13.

Intangible Assets (Consolidated)

Balances and changes in intangible assets are as follows:


	Weighted average useful life (years)		Balance on 12/31/2015			Additions		Amortization			Transfer			Write- offs and disposals		Effect of foreign currency exchange rate variation			Balance on 06/30/2016
Cost:
Goodwill (i)		—		1,456,179			—		—			—			—		—			1,456,179
Software (ii)		5		539,522			23,672		—			6,541			—		(4,519	)		565,216
Technology (iii)		5		32,617			—		—			—			—		—			32,617
Commercial property rights (iv)		10		36,588			4,205		—			—			—		—			40,793
Distribution rights (v)		5		3,278,487			197,746		—			(170,698	)		—		—			3,305,535
Brands (vi)		—		120,944			—		—			354			—		(8,618	)		112,680
Others (vii)		4		46,951			411		—			(6,314	)		—		(1,279	)		39,769

				5,511,288			226,034		—			(170,117	)		—		(14,416	)		5,552,789

Accumulated amortization:
Software				(350,760	)		—		(24,439	)		(2	)		—		3,111			(372,090	)
Technology				(31,256	)		—		(892	)		—			—		—			(32,148	)
Commercial property rights				(16,979	)		—		(1,422	)		—			—		—			(18,401	)
Distribution rights				(1,802,989	)		—		(243,291	)		169,005			—		—			(1,877,275	)
Others				(15,369	)		—		(3,919	)		(83	)		—		(27	)		(19,398	)

				(2,217,353	)		—		(273,963	)		168,920			—		3,084			(2,319,312	)

Net amount				3,293,935			226,034		(273,963	)		(1,197	)		—		(11,332	)		3,233,477

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

i) Goodwill from acquisition of companies was amortized until December 31, 2008, when its amortization ceased. The net remaining balance is tested annually for impairment.

The Company has the following balances of goodwill:


	Segment		06/30/2016		12/31/2015
Goodwill on the acquisition of:
Extrafarma		Extrafarma		661,553		661,553
Ipiranga		Ipiranga		276,724		276,724
Uniăo Terminais		Ultracargo		211,089		211,089
Texaco		Ipiranga		177,759		177,759
Oxiteno Uruguay		Oxiteno		44,856		44,856
Temmar		Ultracargo		43,781		43,781
DNP		Ipiranga		24,736		24,736
Repsol		Ultragaz		13,403		13,403
Others				2,278		2,278

				1,456,179		1,456,179

On December 31, 2015, the Company tested the balances of goodwill shown in the table above for impairment. The determination of value in use involves assumptions, judgments, and estimates of cash flows, such as growth rates of revenues, costs and expenses, estimates of investments and working capital, and discount rates. The assumptions about growth projections and future cash flows are based on the Company’s business plan of its operating segments, as well as comparable market data, and represent management’s best estimate of the economic conditions that will exist over the economic life of the various CGUs, to which goodwill is related.

The evaluation of the value in use is calculated for a period of five years (except the Extrafarma segment), after which we calculate the perpetuity, considering the possibility of carrying the business on indefinitely. For the Extrafarma segment, a period of 10 years was used due to its expansion plan and considering a three-years period to maturity of new stores.

On December 31, 2015, the discount and real growth rates used to extrapolate the projections ranged from 10.3% to 17.1% (except discount rate of Oxiteno Andina of 43.5%) and 0% to 1% p.a., respectively, depending on the CGU analyzed.

The goodwill impairment tests and net assets of the Company and its subsidiaries did not result in the recognition of losses for the year ended December 31, 2015. The Company assessed a sensitivity analysis of discount and growth rate of perpetuity, due to their significant impact on cash flows and value in use. An increase of 0.5 percentage points in the discount rate or a decrease of 0.5 percentage points in the growth rate of the perpetuity of the cash flow of each business segment would not result in the recognition of impairment.

ii) Software includes user licenses and costs for the implementation of the various systems used by the Company and its subsidiaries, such as: integrated management and control, financial management, foreign trade, industrial automation, operational and storage management, accounting information, and other systems.

iii) The subsidiaries Oxiteno S.A., Oxiteno Nordeste and Oleoquímica Indústria e Comércio de Produtos Químicos Ltda. (“Oleoquímica”) recognize as technology certain rights of use held by them. Such licenses include the production of ethylene oxide, ethylene glycols, ethanolamines, glycol ethers, ethoxylates, solvents, fatty acids from vegetable oils, fatty alcohols, and specialty chemicals, which are products that are supplied to various industries.

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

iv) Commercial property rights include those described below:

•

Subsidiary Tequimar has an agreement with CODEBA – Companhia das Docas do Estado da Bahia, which allows it to explore the area in which the Aratu Terminal is located for 20 years, renewable for a similar period. The price paid by Tequimar was R$ 12,000, which is being amortized from August 2002 to July 2042.

•

Subsidiary Tequimar has a lease contract for an area adjacent to the Port of Santos for 20 years from December 2002, renewable for a similar period, which allows the construction, operation, and use of a terminal for liquid bulk unloading, tank storage, handling, and distribution. The price paid by Tequimar was R$ 4,334, which is being amortized from August 2005 to December 2022.

•

Subsidiary Extrafarma pays key money to obtain certain commercial establishments to open drugstores which is stated at the cost of acquisition, amortized using the straight line method, considering the lease contract terms. In the case of the closedown of stores, the residual amount is written off.

v) Distribution rights refer mainly to bonus disbursements as provided in Ipiranga’s agreements with resellers and large customers. Bonus disbursements are recognized when paid and recognized as an expense in the income statement over the term of the agreement (typically 5 years), which is reviewed as per the changes occurred in the agreements.

vi) Brands are represented by the acquisition cost of the ‘am/pm’ brand in Brazil and of the Extrafarma brand.

vii) Other intangibles refer mainly to the loyalty program “Clube Extrafarma”.

The amortization expenses were recognized in the interim financial information as shown below:


	06/30/2016		06/30/2015
Inventories and cost of products and services sold		7,322		5,194
Selling and marketing		243,216		207,889
General and administrative		23,425		20,765

		273,963		233,848

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

14	Loans, Debentures, and Finance Leases (Consolidated)

a.	*Composition*


Description	06/30/2016		12/31/2015		Index/Currency		Weighted average financial charges 06/30/2016 – % p.a.		Maturity
Foreign currency – denominated loans:
Foreign loan (b.1) (*)		906,505		1,111,721		US$ + LIBOR (i)		+0.7		2017 to 2018
Foreign loan (b.1) (*)		472,210		576,645		US$		+2.1		2017 to 2018
Foreign loan (b.2) (b.3) (b.4)		327,184		397,586		US$ + LIBOR (i)		+1.4		2017 to 2018
Financial institutions (d)		192,943		77,800		US$ + LIBOR (i)		+2.7		2016 to 2021
Advances on foreign exchange contracts		150,750		222,478		US$		+2.6		< 329 days
Financial institutions (d)		114,701		142,779		US$		+2.7		2016 to 2017
Foreign currency advances delivered		47,893		50,132		US$		+1.7		< 117 days
Financial institutions (d)		20,965		27,110		MX$ + TIIE (ii)		+1.0		2016 to 2017
BNDES (c)		11,850		24,057		US$		+6.0		2016 to 2020

Subtotal		2,245,001		2,630,308

Brazilian Reais – denominated loans:
Banco do Brasil – floating rate (e)		2,874,471		3,115,752		CDI		107.5		2017 to 2022
Debentures—IPP (f.1, f.2 and f.4)		1,914,331		1,413,101		CDI		107.1		2017 to 2021
Debentures—5th issuance (f.3)		833,248		833,114		CDI		108.3		2018
BNDES (c)		367,343		409,339		TJLP (iii)		+2.8		2016 to 2021
Export Credit Note – floating rate (g)		158,647		158,648		CDI		101.5		2018
BNDES (c)		62,141		30,878		SELIC (vi)		+2.3		2016 to 2021
Banco do Nordeste do Brasil		56,597		66,096		R$ (iv)		+8.5		2016 to 2021
FINEP		55,189		61,724		R$		+4.0		2016 to 2021
Finance leases (h)		49,668		45,480		IGP-M (v)		+5.6		2016 to 2031
BNDES (c)		45,314		49,681		R$		+5.1		2016 to 2022
FINEP		10,644		11,174		TJLP (iii)		-1.4		2016 to 2023
Export Credit Note (g) (*)		10,061		27,039		R$		+8.0		2016
Working capital loans Extrafarma – fixed rate		314		1,160		R$		+10.0		2016
Floating finance leases (h)		222		319		CDI		+2.8		2016 to 2017
FINAME		151		255		TJLP (iii)		+5.7		2016 to 2022
Fixed finance leases (h)		60		95		R$		+15.6		2016 to 2017

Subtotal		6,438,401		6,223,855

Currency and interest rate hedging instruments		239,238		47,445

Total		8,922,640		8,901,608

Current		1,210,816		1,097,855

Non-current		7,711,824		7,803,753

(*)	These transactions were designated for hedge accounting (see Note 31 – Hedge Accounting).

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

(i)	LIBOR = London Interbank Offered Rate.

(ii)	MX$ = Mexican Peso; TIIE = the Mexican interbank balance interest rate.

(iii)

TJLP (Long-term Interest Rate) = set by the National Monetary Council, TJLP is the basic financing cost of Banco Nacional de Desenvolvimento Econômico e Social (“BNDES”), the Brazilian Development Bank. On June 30, 2016, TJLP was fixed at 7.5% p.a.

(iv)

Contract linked to the rate of FNE (Northeast Constitutional Financing Fund) fund whose purpose is to foster the development of the industrial sector, administered by Banco do Nordeste do Brasil. On June, 30, 2016, the FNE interest rate was 10% p.a. FNE grants a discount of 15% over the interest rate for timely payments.

(v)	IGP-M = General Market Price Index is a measure of Brazilian inflation, calculated by the Getúlio Vargas Foundation.

(vi)	SELIC = basic interest rate set by the Brazilian Central Bank.

The long-term consolidated debt had the following principal maturity schedule:


	06/30/2016		12/31/2015
From 1 to 2 years		2,736,417		3,393,586
From 2 to 3 years		3,341,218		3,165,603
From 3 to 4 years		650,804		1,155,809
From 4 to 5 years		602,163		38,585
More than 5 years		381,222		50,170

		7,711,824		7,803,753

As provided in IAS 39 (CPC 8 (R1)), the transaction costs and issuance premiums associated with debt issuance by the Company and its subsidiaries were added to their financial liabilities, as shown in Note 14.i).

The Company’s management entered into hedging instruments against foreign exchange and interest rate variations for a portion of its debt obligations (see Note 31).

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

b.	*Foreign Loans*

The subsidiary IPP has foreign loans in the amount of US$ 440 million. IPP also contracted hedging instruments with floating interest rate in U.S. dollar and exchange rate variation, changing the foreign loans charges, on average, to 102.1% of CDI (see Note 31). IPP designated these hedging instruments as a fair value hedge; therefore, loans and hedging instruments are both measured at fair value from inception, with changes in fair value recognized through profit or loss. The foreign loans are secured by the Company.

The foreign loans have the maturity distributed as follows:


Maturity	US$ (million)		Cost in % of CDI
Mar/17		70.0		99.5
Sep/17		150.0		103.7
Jul/18		60.0		103.0
Sep/18		80.0		101.5
Nov/18		80.0		101.4

Total / average cost		440.0		102.1

The subsidiary Oxiteno Overseas Corp. (“Oxiteno Overseas”) has a foreign loan in the amount of US$ 60 million with maturity in January 2017 and interest of LIBOR + 1.0% p.a., paid semiannually. The Company, through its subsidiary Cia. Ultragaz, contracted hedging instruments with floating interest rates in dollar and exchange rate variation, changing the foreign loan charge to 94.0% of CDI (see Note 31). The foreign loan is guaranteed by the Company and its subsidiary Oxiteno S.A.

3)	The subsidiary LPG International Inc. (“LPG Inc.”) has a foreign loan in the amount of US$ 30 million with maturity in December 2018 and interest rate of LIBOR + 1.85% p.a, paid quarterly. The foreign loan is guaranteed by the Company and its subsidiary IPP.

4)	The subsidiary Global Petroleum Products Trading Corporation has a foreign loan in the amount of US$ 12 million with maturity in December 2018 and interest rate of LIBOR + 1.85% p.a, paid quarterly. The foreign loan is guaranteed by the Company and its subsidiary IPP.

During these contracts, the Company shall maintain the following financial ratios, calculated based on its audited consolidated interim financial information:

•

Maintenance of a financial ratio, determined by the ratio between consolidated net debt and consolidated Earnings before Interest, Taxes, Depreciation, and Amortization (EBITDA), at less than or equal to 3.5.

•

Maintenance of a financial ratio, determined by the ratio between consolidated EBITDA and consolidated net financial expenses, higher than or equal to 1.5.

The Company is in compliance with the levels of covenants required by these loans. The restrictions imposed on the Company and its subsidiaries are usual for this type of transaction and have not limited their ability to conduct their business to date.

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

c.	*BNDES*

The Company and its subsidiaries have financing from BNDES for some of their investments and for working capital.

During the term of these agreements, the Company must maintain the following capitalization and current liquidity levels, as determined in the annual consolidated audited balance sheet:

•

Capitalization level: shareholders’ equity / total assets equal to or above 0.3; and

•

Current liquidity level: current assets / current liabilities equal to or above 1.3.

d.	*Financial Institutions*

The subsidiaries Oxiteno Mexico S.A. de C.V., Oxiteno USA LLC (“Oxiteno USA”) and Oxiteno Uruguay have loans to finance investments and working capital.

In February 2016, subsidiary Oxiteno USA entered into a loan agreement in the amount of US$40 million, due in February 2021 and bearing interest of LIBOR + 3% p.a., paid quarterly. The loan is guaranteed by Ultrapar and the subsidiary Oxiteno Nordeste and the proceeds of this loan will be used to fund the construction of a new alcoxylation plant in the state of Texas.

e.	*Banco do Brasil*

The subsidiary IPP has floating interest rate loans with Banco do Brasil to finance the marketing, processing, or manufacturing of agricultural goods (ethanol).

The subsidiary IPP renegotiated loans with Banco do Brasil in the notional amount of R$ 167 million, changing the maturity from February 2016 to February 2019, with floating interest rate of 114% of CDI.

The subsidiary IPP renegotiated loans with Banco do Brasil in the notional amount of R$ 100 million and R$ 909.5 million, changing the maturity from May 2016 and January 2017, respectively, to May 2020, May 2021 and May 2022, with floating interest rate of 110.9% of CDI.

These loans mature, as follows (including interest until June 30, 2016):


Maturity
Jul/17			177,177
Nov/17			101,611
Jan/18			177,177
Apr/18			101,611
Feb/19			170,143
May/19			1,127,221
May/20			339,843
May/21			339,843
May/22			339,845

Total			2,874,471

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

f.	*Debentures*

1)	In December 2012, the subsidiary IPP made its first issuance of public debentures, in a single series of 60,000 simple, nominative, registered debentures, nonconvertible into shares and unsecured, which its main characteristics as follows:


Face value unit:		R$ 10,000.00
Final maturity:		November 16, 2017
Payment of the face value:		Lump sum at final maturity
Interest:		107.9% of CDI
Payment of interest:		Semiannually
Reprice:		Not applicable

2)	In January 2014, the subsidiary IPP made its second issuance of public debentures, in a single series of 80,000 simple, nominative, registered debentures, nonconvertible into shares and unsecured, which its main characteristics as follows:


Face value unit:		R$ 10,000.00
Final maturity:		December 20, 2018
Payment of the face value:		Lump sum at final maturity
Interest:		107.9% of CDI
Payment of interest:		Semiannually
Reprice:		Not applicable

3)	In March 2015, the Company made its fifth issuance of debentures, in a single series of 80,000 simple, nonconvertible into shares, unsecured debentures, and its main characteristics are as follows:


Face value unit:		R$ 10,000.00
Final maturity:		March 16, 2018
Payment of the face value:		Lump sum at final maturity
Interest:		108.25% of CDI
Payment of interest:		Semiannually
Reprice:		Not applicable

4)	In May 2016, the subsidiary IPP made its fourth issuance of public debentures, in a single series of 500 simple, nominative, registered debentures, nonconvertible into shares and unsecured, which its main characteristics as follows:


Face value unit:		R$ 1,000,000.00
Final maturity:		May 25, 2021
Payment of the face value:		Annual as from May 2019
Interest:		105.0% of CDI
Payment of interest:		Semiannually
Reprice:		Not applicable

The funds raised by the issue will be used in the purchase of ethanol by the subsidiary. The subsidiary has the obligation to prove the allocation of the resources within 12 months from subscription.

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

g.	*Export Credit Note*

The subsidiary Oxiteno Nordeste has export credit note contracts in the amounts of R$ 156.8 million and R$ 10.0 million, with maturities in May 2018 and August 2016, respectively, and fixed interest rate of floating rate of 101.5% of CDI and 8% p.a., paid quarterly.

For the fixed interest rate contracts, the subsidiary Oxiteno Nordeste contracted interest hedging instruments, thus converting the fixed rates for these loans into 79.9% of CDI (see Note 31). Oxiteno Nordeste designated these hedging instruments as a fair value hedge; therefore, loans and hedging instruments are both measured at fair value from inception. Changes in fair value are recognized in profit or loss.

In March 2016, the subsidiary Oxiteno Nordeste settled the export credit note in the amount of R$ 17.5 million on the maturity date, with interest rate of 8% p.a. and also settled its respective hedging instrument.

h.	*Finance Leases*

The subsidiary Cia. Ultragaz has a finance lease contract related to LPG bottling facilities, maturing in April 2031.

Subsidiary Extrafarma has finance lease contracts related to IT equipment and software, with terms between 48 to 60 months.

The amounts of equipment and intangible assets, net of depreciation and amortization, and the amounts of the corresponding liabilities are shown below:


	06/30/2016
	LPG bottling facilities		IT equipment and software		Vehicles		Total
Equipment and intangible assets, net of depreciation and amortization		17,980		331		—		18,311
Financing (present value)		49,668		282		—		49,950

Current		2,407		260		—		2,667
Non-current		47,261		22		—		47,283


	12/31/2015
	LPG bottling facilities		IT equipment and software		Vehicles		Total
Equipment and intangible assets, net of depreciation and amortization		19,890		438		95		20,423
Financing (present value)		45,480		396		18		45,894

Current		2,107		260		18		2,385
Non-current		43,373		136		—		43,509

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

The future disbursements (installments) assumed under these contracts are presented below:


	06/30/2016
	LPG bottling facilities		IT equipment and software		Vehicles		Total
Up to 1 year		4,876		282		—		5,158
From 1 to 2 years		4,876		23		—		4,899
From 2 to 3 years		4,876		—		—		4,876
From 3 to 4 years		4,876		—		—		4,876
From 4 to 5 years		4,876		—		—		4,876
More than 5 years		47,954		—		—		47,954

Total		72,334		305		—		72,639


	12/31/2015
	LPG bottling facilities		IT equipment and software		Vehicles		Total
Up to 1 year		4,371		287		18		4,676
From 1 to 2 years		4,371		155		—		4,526
From 2 to 3 years		4,371		—		—		4,371
From 3 to 4 years		4,371		—		—		4,371
From 4 to 5 years		4,371		—		—		4,371
More than 5 years		45,165		—		—		45,165

Total		67,020		442		18		67,480

The above amounts include Services Tax (“ISS”) payable on the monthly installments, except for disbursements for the LPG bottling facilities.

i.	*Transaction Costs*

Transaction costs incurred in issuing debt were deducted from the value of the related financial instruments and are recognized as an expense according to the effective interest rate method, as follows:


	Effective rate of transaction costs (% p.a.)		Balance in 12/31/2015		Incurred cost		Amortization			Balance in 06/30/2016
Banco do Brasil (e)		0.2		11,883		3,529		(1,419	)		13,993
Foreign Loans (b)		0.2		4,649		—		(1,304	)		3,345
Debentures (f)		0.1		1,801		6,407		(409	)		7,799
Other		0.2		545		997		(358	)		1,184

Total				18,878		10,933		(3,490	)		26,321

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

The amount to be appropriated to profit or loss in the future is as follows:


	Up to 1 year		1 to 2 years		2 to 3 years		3 to 4 years		4 to 5 years		More than 5 years		Total
Banco do Brasil (e)		3,785		4,372		4,380		695		496		265		13,993
Foreign Loans (b)		1,957		1,107		281		—		—		—		3,345
Debentures (f)		1,995		2,143		1,865		1,187		609		—		7,799
Other		297		329		250		211		97		—		1,184

Total		8,034		7,951		6,776		2,093		1,202		265		26,321

j.	*Guarantees*

The financings are guaranteed by collateral in the amount of R$ 54,101 as of June 30, 2016 (R$ 52,312 as of December 31, 2015) and by guarantees and promissory notes in the amount of R$ 4,541,150 as of June 30, 2016 (R$ 4,369,977 as of December 31, 2015).

In addition, the Company and its subsidiaries offer collateral in the form of letters of credit for commercial and legal proceedings in the amount of R$ 201,104 as of June 30, 2016 (R$ 187,551 as of December 31, 2015). As of June 30, 2016, there was no guarantees related to raw materials imported by the subsidiary IPP (R$ 133,154 as of December 31, 2015).

Some subsidiaries of Oxiteno issue collateral to financial institutions in connection with the amounts owed by some of their customers to such institutions (vendor financing). If a subsidiary is required to make any payment under these collaterals, this subsidiary may recover the amount paid directly from its customers through commercial collection. The maximum amount of future payments related to these collaterals is R$ 25,111 as of June 30, 2016 (R$ 27,106 as of December 31, 2015), with maturities of up to 211 days. As of June 30, 2016, the subsidiaries did not have losses in connection with these collaterals. The fair value of collaterals recognized in current liabilities as other payables is R$ 601 as of June 30, 2016 (R$ 656 as of December 31, 2015), which is recognized as profit or loss as customers settle their obligations with the financial institutions.

15	Trade Payables (Consolidated)


	06/30/2016		12/31/2015
Domestic suppliers		946,601		1,390,204
Foreign suppliers		72,191		70,328

		1,018,792		1,460,532

Some Company’s subsidiaries acquire oil based fuels and LPG from Petróleo Brasileiro S.A.—Petrobras and its subsidiaries and ethylene from Braskem S.A. These suppliers control almost all of the markets for these products in Brazil. The Company’s subsidiaries depend on the ability of those suppliers to deliver products in a timely manner and at acceptable prices and terms. The loss of any major supplier or a significant reduction in product availability from these suppliers could have a significant adverse effect on the Company and its subsidiaries. The Company and its subsidiaries believe that their relationship with suppliers is satisfactory.

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

16	Salaries and Related Charges (Consolidated)


	06/30/2016		12/31/2015
Provisions on payroll		178,598		149,818
Profit sharing, bonus and premium		80,129		201,579
Social charges		36,213		43,782
Salaries and related payments		4,858		6,993
Benefits		1,855		1,558
Others		799		583

		302,452		404,313

17	Taxes Payable (Consolidated)


	06/30/2016		12/31/2015
ICMS		113,984		111,107
Income Tax Withholding (IRRF)		2,126		2,418
PIS and COFINS		14,722		11,165
Value-Added Tax (IVA) of subsidiaries Oxiteno Mexico, Oxiteno USA, Oxiteno Andina and Oxiteno Uruguay		12,679		26,342
IPI		7,758		4,949
ISS		6,060		6,976
National Institute of Social Security (INSS)		3,593		3,309
Others		1,778		2,538

		162,700		168,804

18	Employee Benefits and Private Pension Plan (Consolidated)

a.	*ULTRAPREV- Associaçăo de Previdência Complementar*

In February 2001, the Company’s Board of Directors approved the adoption of a defined contribution pension plan to be sponsored by the Company and each of its subsidiaries. Participating employees have been contributing to this plan, managed by Ultraprev—Associaçăo de Previdência Complementar (“Ultraprev”), since August 2001. Under the terms of the plan, every year each participating employee chooses his or her basic contribution to the plan. Each sponsoring company provides a matching contribution in an amount equivalent to each basic contribution, up to a limit of 11% of the employee’s reference salary, according to the rules of the plan. As participating employees retire, they may choose to receive either (i) a monthly sum ranging between 0.5% and 1.0% of their respective accumulated fund in Ultraprev or (ii) a fixed monthly amount which will exhaust their respective accumulated fund over a period of 5 to 25 years. The sponsoring company does not guarantee the amounts or the duration of the benefits received by each employee that retires. For the six-month period ended June 30, 2016, the Company and its subsidiaries contributed R$ 11,444 (R$ 10,761 for the six-month period ended June 30, 2015) to Ultraprev, which is recognized as expense in the income statement. The total number of participating employees as of June 30, 2016 was 8,975 active participants and 193 retired participants. In addition, Ultraprev had 28 former employees receiving benefits under the rules of a previous plan whose reserves are fully constituted.

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

b.	*Post-employment Benefits*

The Company and its subsidiaries recognized a provision for post-employment benefits mainly related to seniority bonus, payment of Government Severance Indemnity Fund (“FGTS”), and health, dental care, and life insurance plan for eligible retirees.

The amounts related to such benefits were determined based on a valuation conducted by an independent actuary as of December 31, 2015 and are recognized in the interim financial information in accordance with IAS 19 R2011 (CPC 33 R2).


	06/30/2016		12/31/2015
Health and dental care plan		26,401		24,869
FGTS Penalty		60,722		59,517
Bonus		28,528		28,835
Life insurance		14,167		13,374

Total		129,818		126,595

Current		13,734		13,747
Non-current		116,084		112,848

19	Provision for Asset Retirement Obligation – Fuel Tanks (Consolidated)

The provision corresponds to the legal obligation to remove Ipiranga’s underground fuel tanks located at Ipiranga-branded service stations after a certain use period (see Note 2.m).

Changes in the provision for asset retirement obligation are as follows:


	06/30/2016			06/30/2015
Initial balance		74,716			70,802
Additions (new tanks)		160			321
Expense with tanks removed		(1,425	)		(1,973	)
Accretion expense		3,739			4,303

Final balance		77,190			73,453

Current		4,481			5,104
Non-current		72,709			68,349

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

20	Provisions, Contingencies and Commitments (Consolidated)

a.	*Provisions for tax, civil, and labor risks*

The Company and its subsidiaries are parties in tax, civil, environmental, regulatory, and labor disputes at the administrative and judiciary levels, which, when applicable, are backed by escrow deposits. Provisions for losses are estimated and updated by Management based on the opinion of the Company’s legal department and its external legal advisors.

The table below demonstrates the breakdown of provisions by nature and its movement:


Provisions	Balance on 12/31/2015		Additions		Write-offs			Monetary restatement		Balance on 06/30/2016
IRPJ and CSLL (a.1.1)		439,923		—		—			17,471		457,394
PIS and COFINS (a.1.2)		135,818		427		(2,468	)		5,044		138,821
ICMS		16,600		546		(804	)		811		17,153
Social security		11,455		248		—			413		12,116
Civil, environmental and regulatory claims (a.2.1)		60,293		1,961		(2,645	)		557		60,166
Labor litigation (a.3.1)		65,388		6,551		(6,281	)		658		66,316
Other		505		—		—			22		527

Total		729,982		9,733		(12,198	)		24,976		752,493

Current		45,322									52,225
Non-current		684,660									700,268

Some of the tax provisions above involve, in whole or in part, escrow deposits in the amount of R$ 569,540 as of June 30, 2016 (R$ 548,150 as of December 31, 2015 ).

a.1

Provisions for Tax Matters and Social Security

a.1.1) On October 7, 2005, the subsidiaries Cia. Ultragaz and Bahiana Distribuidora de Gás Ltda. (“Bahiana”) filed for and obtained a preliminary injunction to recognize and offset PIS and COFINS credits on LPG purchases, against other taxes levied by the Brazilian Federal Revenue Service, notably IRPJ and CSLL. The decision was confirmed by a trial court on May 16, 2008. Under the preliminary injunction, the subsidiaries made escrow deposits for these debits which amounted to R$ 439,992 as of June 30, 2016 (R$ 422,678 as of December 31, 2015). On July 18, 2014, a second instance unfavorable decision was published and the subsidiaries suspended the escrow deposits, and started to pay income taxes from that date. To revert the court decision, the subsidiaries presented a writ of prevention which was dismissed on December 30, 2014, and the Company appealed this decision on February 3, 2015. Appeals were also presented to the respective higher courts (STJ and STF) whose trials are pending.

a.1.2) The subsidiaries Oxiteno S.A., Oxiteno Nordeste, Cia. Ultragaz, Tequimar, Tropical Transportes Ipiranga Ltda., Empresa Carioca de Produtos Químicos S.A. (“EMCA”), IPP and Extrafarma filed for a preliminary injunction seeking the deduction of ICMS from their PIS and COFINS tax bases. Oxiteno Nordeste and IPP paid the amounts into escrow deposits, and recognized a corresponding provision in the amount of R$ 103,644 as of June 30, 2016 (R$ 99,874 as of December 31, 2015).

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

a.2)

Provisions for Civil, Environmental and Regulatory Claims

a.2.1) The Company and its subsidiaries maintained provisions for lawsuits and administrative proceedings, mainly derived from contracts entered into with customers and former services providers, as well as proceedings related to environmental and regulatory issues in the amount of R$ 60,166 as of June 30, 2016 (R$ 60,293 as of December 31, 2015).

a.3)

Provisions for Labor Matters

a.3.1) The Company and its subsidiaries maintained provisions of R$ 66,316 as of June 30, 2016 (R$ 65,388 as of December 31, 2015) for labor litigation filed by former employees and by employees of our service providers mainly contesting the non-payment of labor rights.

b.	Contingent Liabilities (Possible)

The Company and its subsidiaries have other pending administrative and legal proceedings of tax, civil, environmental, regulatory, and labor nature, which are individually less relevant, and were estimated by their legal counsel as having possible and/or remote risks (proceedings whose chance of loss is 50% or less). A such, the related potential losses were not provided for by the Company and its subsidiaries based on these opinions. The Company and its subsidiaries are also litigating for recovery of taxes and contributions, which were not recognized in the interim financial information due to their contingent nature. The estimated amount of this contingency is R$ 2,164,076 as of June 30, 2016 (R$ 2,069,516 as of December 31, 2015).

b.1)

Contingent Liabilities for Tax Matters and Social Security

The Company and its subsidiaries have contingent liabilities for tax matters and social security in the amount of R$ 1,506,386 as of June 30, 2016 (R$ 1,261,396 as of December 31, 2015), mainly represented by:

b.1.1) The subsidiary IPP and its subsidiaries have assessments invalidating the offset of excise tax (“IPI”) credits in connection with the purchase of raw materials used in the manufacturing of products which sales are not subject to IPI under the protection of tax immunity. The amount of this contingency is R$ 109,467 as of June 30, 2016 (R$ 154,821 as of December 31, 2015).

b.1.2) The subsidiary IPP and its subsidiaries have legal proceedings related to ICMS. The total amount involved as of June 30, 2016 in these proceedings, was R$ 612,495 (R$ 509,604 as of December 31, 2015). Such proceedings arise mostly of the disregard of ICMS credits amounting to R$ 286,144 (R$ 294,454 as of December 31, 2015), of which R$ 108,997 (R$ 119,663 as of December 31, 2015) refer to proportional reversal requirement of ICMS credits related to the acquisition of hydrated alcohol; of alleged non-payment in the amount of R$ 112,842 (R$ 105,070 as of December 31, 2015); inventory differences in the amount of R$ 127,798 (R$ 103,428 as of December 31, 2015) related to the leftovers or faults due to temperature changes or product handling, and noncompliance of ancillary obligations in the amount of R$ 16,336 (R$ 6,652 as of December 31, 2015).

b.1.3) The Company and its subsidiaries are parties to administrative and judicial suits involving Income Tax, Social Security Contribution, PIS and COFINS, substantially about denials of offset claims and credits disallowance which total amount is R$ 459,365 as of June 30, 2016 (R$ 308,377 as of December 31, 2015).

b.2)

Contingent Liabilities for Civil, Environmental and Regulatory Claims

The Company and its subsidiaries have contingent liabilities for civil, environmental and regulatory claims in the amount of R$ 443,458 as of June 30, 2016 (R$ 582,960 as of December 31, 2015), mainly represented by:

b.2.1) The subsidiary Cia. Ultragaz is party to an administrative proceeding before CADE (Brazilian antitrust authority) based on alleged anti-competitive practices in the State of Minas Gerais in 2001. The CADE entered a decision against Cia. Ultragaz and imposed a penalty of R$ 23,104. The imposition of such administrative decision was suspended by a court order and its merit is being judicially reviewed.

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

b.2.2) As a result of the fire on April 2^nd, 2015 at the Santos Terminal of the subsidiary Tequimar, Environmental Company of the State of São Paulo (“CETESB”) charged a fine of R$ 22,500, due to the environmental and urban impacts allegedly caused by the incident. Tequimar filed before such Environmental Agency its refutation under the first administrative jurisdiction, in which, among other things, it claimed the inapplicability of federal legislation due to the existence of state legislation that not only regulate the issue but also may cause the fine reduction. It also denied the unlawful conduct by Tequimar. In March 2016, a decision in the administrative level denied the Company’s appeal against the fine applied by CETESB. The decision set forth a 30% discount in the case of an immediate payment. In this scenario, the subsidiary’s Management, supported by its legal counsel, decided to pay the fine in the amount of R$ 16,032 on March 16, 2016. For more information see Note 33.

b.3)

Contingent Liabilities for Labor Matters

The Company and its subsidiaries have contingent liabilities for labor matters in the amount of R$ 214,232 as of June 30, 2016 (R$ 225,160 as of December 31, 2015), mainly represented by:

b.3.1) In 1990, the Petrochemical Industry Labor Union (Sindiquímica), of which the employees of Oxiteno Nordeste and EMCA, companies located in the Camaçari Petrochemical Complex, are members, filed separate lawsuits against the subsidiaries demanding the compliance with the fourth section of the collective labor agreement, which provided for a salary adjustment in lieu of the salary policies practiced. In the same year, a collective labor dispute was also filed by the Union of Employers (SINPEQ) against Sindiquímica, requiring the recognition of the loss of effectiveness of such fourth section. The decisions rendered on the individual claims which were favorable to the subsidiaries Oxiteno Nordeste and EMCA are final and unappealable. The collective labor dispute remains pending trial by STF. In 2010, some companies in the Camaçari Petrochemical Complex signed an agreement with Sindiquímica and reported the fact in the collective labor dispute. In October 2015, Sindiquímica filed enforcement lawsuits against all Camaçari Petrochemical Complex companies that have not yet made settlements, including Oxiteno Nordeste and EMCA.

21	Deferred Revenue (Consolidated)

The Company’s subsidiaries have recognized the following deferred revenue:


	06/30/2016		12/31/2015
‘am/pm’ and Jet Oil franchising upfront fee		16,296		16,988
Loyalty program “Km de Vantagens”		11,425		10,569
Loyalty program “Clube Extrafarma”		4,833		7,899

		32,554		35,456

Current		21,920		24,420
Non-current		10,634		11,036

Loyalty Programs

Subsidiary Ipiranga has a loyalty program called Km de Vantagens (www.kmdevantagens.com.br) under which registered customers are rewarded with points when they buy products at Ipiranga service stations or at its partners. The customers may exchange these points, during the period of one year, for discounts on products and services offered by Ipiranga and its partners. Points received by Ipiranga’s customers that may be used with the partner Multiplus Fidelidade and for discounts of fuel in Ipiranga’s website (www.postoipiranganaweb.com.br) and discounted of sales revenue.

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

Subsidiary Extrafarma has a loyalty program called Clube Extrafarma (www.clubeextrafarma.com.br) under which registered customers are rewarded with points when they buy products at its drugstore chain. The customers may exchange these points, during the period of six months, for discounts in products at its drugstore chain, recharge credit on a mobile phone, and prizes offered by partners Multiplus Fidelidade and Ipiranga, through Km de Vantagens. Points received by Extrafarma’s customers are discounted of sales revenue.

Deferred revenue is estimated based on the fair value of the points granted, considering the value of the prizes and the expected redemption of points. Deferred revenue is recognized in profit or loss when the points are redeemed, on which occasion the costs incurred are also recognized. Deferred revenue of unredeemed points is also recognized in profit or loss when the points expire.

Franchising Upfront Fee

am/pm is the convenience stores chain of the Ipiranga service stations. Ipiranga ended June 30, 2016 with 1,950 stores (1,909 stores as of December 31, 2015). Jet Oil is Ipiranga’s lubricant-changing and automotive service specialized network. Ipiranga ended June 30, 2016 with 1,485 stores (1,466 stores as of December 31, 2015). The franchising upfront fee received by Ipiranga is deferred and recognized in profit or loss on the straight-line accrual basis throughout the terms of the agreements with the franchisees.

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

22	Subscription warrants – indemnification

Because of the association between the Company and Extrafarma on January 31, 2014, 7 subscription warrants – indemnification were issued, corresponding to up to 3,205,622 shares of the Company. The shares of the subscription warrants – indemnification may be exercised from 2020 onwards by the former shareholders of Extrafarma and are adjusted according to the changes in the amounts of provisions for tax, civil, and labor risks and contingent liabilities related to the period prior to January 31, 2014. The subscription warrants – indemnification’s fair value is measured based on the share price of Ultrapar (UGPA3) and is reduced by the dividend yield until 2020, since the exercise is possible only from 2020, and they are not entitled to dividends until that date. As of June 30, 2016, the subscription warrants – indemnification were represented by 2,377,710 shares and amounted R$ 157,133 (as of December 31, 2015 were represented by 2,011,766 and totaled R$ 112,233). Due to the final adverse decision of some of these lawsuits, on June 30, 2016, the maximum number of shares that could be issued related to the subscription warrants – indemnification was up to 3,060,454 (3,070,106 shares as of December 31, 2015). For further information of the Extrafarma acquisition, see Note 3.a to the financial statements of the Company filed with the CVM on February 17, 2016.

23	Shareholders’ Equity

a.	*Share Capital*

The Company is a publicly traded company listed on BM&FBOVESPA in the Novo Mercado listing segment under the ticker “UGPA3” and on the New York Stock Exchange (NYSE) in the form of level III American Depositary Receipts (“ADRs”) under the ticker “UGP”. As of June 30, 2016, the subscribed and paid-in capital stock consists of 556,405,096 common shares with no par value and the issuance of preferred shares and participation certificates is prohibited. Each common share entitles its holder to one vote at Shareholders’ Meetings.

The price of the shares issued by the Company as of June 30, 2016, on BM&FBOVESPA was R$ 71.11.

As of June 30, 2016, the Company is authorized to increase capital up to the limit of 800,000,000 common shares, without amendment to the Bylaws, by resolution of the Board of Directors.

As of June 30, 2016, there were 30,203,897 common shares outstanding abroad in the form of ADRs (29,385,497 shares as of December 31, 2015).

b.	*Treasury Shares*

The Company acquired its own shares at market prices, without capital reduction, to be held in treasury and to be subsequently disposed of or cancelled, in accordance with CVM Instructions 10, of February 14, 1980 and 268, of November 13, 1997.

As of June 30, 2016, 13,131,356 common shares (13,321,356 as of December 31, 2015) were held in the Company’s treasury, acquired at an average cost of R$ 36.85 per share (R$ 36.85 as of December 31, 2015).

c.	*Capital Reserve*

The capital reserve reflects the gain on the transfer of shares at market price to be held in treasury by the Company’s subsidiaries, at an average price of R$ 26.09 per share. Such shares were used in the Deferred Stock Plan granted to executives of these subsidiaries, as mentioned in Note 8.c).

Because of the Extrafarma’s association in 2014, the Company recognized an increase in the capital reserves in the amount of R$ 498,812, due to the difference between the value attributable to share capital and the market value of the Ultrapar shares on the date of issue. In addition, the Company incurred costs directly attributable to issuing new shares in the amount of R$ 2,260, reducing the capital reserve amount.

d.	*Revaluation Reserve*

The revaluation reserve reflects the revaluation of assets of subsidiaries and is based on depreciation, write-off, or disposal of the revalued assets of the subsidiaries, as well as the tax effects recognized by these subsidiaries.

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

e.	*Profit Reserves*

Legal Reserve

Under Brazilian Corporate Law, the Company is required to appropriate 5% of net annual earnings to a legal reserve, until the balance reaches 20% of capital stock. This reserve may be used to increase capital or absorb losses, but may not be distributed as dividends.

Retention of Profits

Reserve recognized in previous fiscal years and used for investments contemplated in a capital budget, mainly for expansion, productivity, and quality, acquisitions and new investments, in accordance with Article 196 of Brazilian Corporate Law.

Investments Reserve

In compliance with Article 194 of the Brazilian Corporate Law and Article 55.c) of the Bylaws this reserve is aimed to protect the integrity of the Company’s assets and to supplement its capital stock, in order to allow new investments to be made. As provided in its Bylaws, the Company may allocate up to 45% of net income to the investments reserve, up to the limit of 100% of the share capital.

The amounts of retention of profits and investments reserve are free of distribution restrictions and totaled R$ 3,329,649 as of June 30, 2016 and December 31, 2015.

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

f.	*Other Comprehensive Income*

Valuation Adjustments

The differences between the fair value and amortized cost of financial investments classified as available for sale are recognized directly in equity as valuation adjustments. The gains and losses recognized in the shareholders’ equity are reclassified to profit or loss in case the financial instruments are prepaid.

Actuarial gains and losses relating to post-employment benefits, calculated based on a valuation conducted by an independent actuary, are recognized in shareholders’ equity under the title “valuation adjustments”. Actuarial gains and losses recorded in equity are not reclassified to profit or loss in subsequent periods.

Gains and losses on the hedging instruments of firm commitment of exchange rate designated as cash flows hedges are recorded in shareholders’ equity as “valuation adjustments”. Gains and losses are reclassified to initial cost of non-financial assets.

Cumulative Translation Adjustments

The change in exchange rates on assets, liabilities, and income of foreign subsidiaries that have (i) functional currency other than the presentation currency of the Company and (ii) an independent administration, is directly recognized in the shareholders’ equity. This accumulated effect is reflected in profit or loss as a gain or loss only in case of disposal or write-off of the investment.

Balance and changes in other comprehensive income of the Company are as follows:


	Valuation adjustments
	Fair value of cash flow hedging instruments			Fair value of financial instruments classified as available for sale			Actuarial gains of post- employment benefits			Total			Cumulative translation adjustment
Balance as of December 31, 2015		6,261			1,523			11,169			18,953			66,925
Translation of foreign subsidiaries, including the exchange rate effect of hedge of investments		—			—			—			—			(76,175	)
Changes in fair value		(97,696	)		(1	)		—			(97,697	)		—
Actuarial gain of post-employment benefits		—			—			4,327			4,327			—
Income and social contribution taxes on actuarial gains		—			—			(1,471	)		(1,471	)		—

Balance as of June 30, 2016		(91,435	)		1,522			14,025			(75,888	)		(9,250	)


	Valuation adjustments
	Fair value of financial investment available for sale			Actuarial gains of post- employment benefits		Total			Cumulative translation adjustment
Balance as of December 31, 2014		51			7,098		7,149			43,192
Translation of foreign subsidiaries, including the exchange rate effect of hedge of investments		—			—		—			26,011
Changes in fair value		(916	)		—		(916	)		—

Balance as of June 30, 2015		(865	)		7,098		6,233			69,203

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

g.	*Dividends*

The shareholders are entitled, under the Bylaws, to a minimum annual dividend of 50% of adjusted net income calculated in accordance with Brazilian Corporate Law. The dividends and interest on equity in excess of the obligation established in the Bylaws are recognized in shareholders’ equity until they are approved by the Shareholders. The proposed dividends payable as of December 31, 2015 in the amount of R$ 434,467 (R$ 0.80 – eighty cents of Brazilian Real per share), were approved by the Board of Directors on February 17, 2016, and paid as of March 4, 2016, having been ratified in the Annual General Shareholders’ Meeting on April 13, 2016.

24	Revenue from Sale and Services (Consolidated)


	06/30/2016			06/30/2015
Gross revenue from sale		39,742,444			36,736,484
Gross revenue from services		294,968			281,137
Sales taxes		(959,426	)		(935,933	)
Discounts and sales returns		(259,028	)		(167,886	)
Deferred revenue (see Note 21)		3,563			517

Net revenue from sales and services		38,822,521			35,914,319

25	Expenses by Nature (Consolidated)

The Company presents its expenses by function in the consolidated income statement and presents below its expenses by nature:


	06/30/2016		06/30/2015
Raw materials and materials for use and consumption		34,832,590		32,249,162
Personnel expenses		988,196		902,097
Freight and storage		525,374		524,502
Depreciation and amortization		545,363		477,573
Advertising and marketing		91,124		96,901
Services provided by third parties		138,239		100,238
Lease of real estate and equipment		79,699		68,070
Other expenses		178,582		166,421

Total		37,379,167		34,584,964

Classified as:
Cost of products and services sold		35,410,967		32,789,552
Selling and marketing		1,290,071		1,197,827
General and administrative		678,129		597,585

Total		37,379,167		34,584,964

Research and development expenses are recognized in the income statements and amounted to R$ 23,055 for the six-month period ended June 30, 2016 (R$ 18,970 for the six-month period ended June 30, 2015).

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

26	Gain (loss) on Disposal of Property, Plant and Equipment and Intangibles (Consolidated)

The gain or loss is determined as the difference between the selling price and residual book value of the investment, property, plant, and equipment, or intangible asset disposed of. For the six-month period ended June 30, 2016, the loss was R$ 2,008 (gain of R$ 24,631 for the six-month period ended June 30, 2015), represented primarily from disposal of property, plant, and equipment.

27	Other Operating Income, Net (Consolidated)


	06/30/2016		06/30/2015
Commercial partnerships ⁽¹⁾		19,316		17,493
Merchandising ⁽²⁾		22,075		18,197
Loyalty program ⁽³⁾		5,638		8,602
Adjustment of working capital and net debt – Extrafarma acquisition (see Note 22)		—		13,784
Ultracargo – fire accident in Santos (see Note 33)		23,671		(75,360	)
Compensation of undue use of Ultratecno brand		—		16,000
Others		4,902		1,540

Other operating income, net		75,602		256

⁽¹⁾	Refers to contracts with service providers and suppliers which establish trade agreements for convenience stores and gas stations.

⁽²⁾	Refers to contracts with suppliers of convenience stores, which establish, among other agreements, promotional campaigns.

⁽³⁾	Refers to sales of “Km de Vantagens” to partners of the loyalty program. Revenue is recognized at the time that the partners transfer the points to their customers.

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

28	Financial Income (Expense)


	Parent						Consolidated
	06/30/2016			06/30/2015			06/30/2016			06/30/2015
Financial income:
Interest on financial investments		73,387			83,971			167,872			163,333
Interest from customers		—			—			50,968			37,870
Other financial income		—			8			2,087			1,957

		73,387			83,979			220,927			203,160

Financial expenses:
Interest on loans		—			—			(364,196	)		(283,654	)
Interest on debentures		(58,608	)		(53,449	)		(167,745	)		(143,260	)
Interest on finance leases		—			—			(6,485	)		(2,737	)
Bank charges, financial transactions tax, and other charges		(3,174	)		2,053			(37,490	)		(12,647	)
Exchange variation, net of gains and losses with derivative instruments		(1	)		—			(28,588	)		(26,240	)
Changes in subscription warranty —indemnification (see Note 22)		(45,775	)		(37,969	)		(45,775	)		(37,969	)
Monetary restatement of provisions, net, and other financial expenses		(10	)		(9	)		(9,564	)		(5,063	)

		(107,568	)		(89,374	)		(659,843	)		(511,570	)

Financial income (expense)		(34,181	)		(5,395	)		(438,916	)		(308,410	)

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

29	Earnings per Share (Parent and Consolidated)

The table below presents a reconciliation of numerators and denominators used in computing earnings per share. The Company has a deferred stock plan and subscription warrants—indemnification, as mentioned in Notes 8.c and 22, respectively.


Basic Earnings per Share	06/30/2016		06/30/2015
Net income for the period of the Company		749,378		713,432

Weighted average shares outstanding (in thousands)		541,356		545,190

Basic earnings per share –R$		1.3843		1.3086


Diluted Earnings per Share	06/30/2016		06/30/2015
Net income for the period of the Company		749,378		713,432

Weighted average shares outstanding (in thousands), including deferred stock plan and subscription warrants—indemnification		545,360		549,570
Diluted earnings per share –R$		1.3741		1.2982


Weighted Average Shares Outstanding (in thousands)	06/30/2016		06/30/2015
Weighted average shares outstanding for basic per share calculation:		541,356		545,190
Dilution effect
Subscription warrants—indemnification		2,150		2,172
Deferred Stock Plan		1,854		2,208

Weighted average shares outstanding for diluted per share calculation:		545,360		549,570

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

30	Segment Information

The Company operates five main business segments: gas distribution, fuel distribution, chemicals, storage and drugstores. The gas distribution segment (Ultragaz) distributes LPG to residential, commercial, and industrial consumers, especially in the South, Southeast, and Northeast regions of Brazil. The fuel distribution segment (Ipiranga) operates the distribution and marketing of gasoline, ethanol, diesel, fuel oil, kerosene, natural gas for vehicles, and lubricants and related activities throughout all the Brazilian territory. The chemicals segment (Oxiteno) produces ethylene oxide and its main derivatives and fatty alcohols, which are raw materials used in the home and personal care, agrochemical, paints, varnishes, and other industries. The storage segment (Ultracargo) operates liquid bulk terminals, especially in the Southeast and Northeast regions of Brazil. The drugstores segment (Extrafarma) trades pharmaceutical, hygiene, and beauty products through its own drugstore chain in the states of Amapá, Ceará, Maranhão, Pará, Paraíba, Pernambuco, Piauí, Rio Grande do Norte, and São Paulo. The segments shown in the interim financial information are strategic business units supplying different products and services. Intersegment sales are at prices similar to those that would be charged to third parties.

The main financial information of each of the Company’s segments are stated as follows:


	06/30/2016			06/30/2015
Net revenue from sales and services:
Ultragaz		2,575,608			2,159,878
Ipiranga		33,457,554			31,093,693
Oxiteno		1,912,980			1,864,425
Ultracargo		166,181			165,690
Extrafarma		737,113			657,073
Others ⁽¹⁾		19,792			20,883
Intersegment sales		(46,707	)		(47,323	)

Total		38,822,521			35,914,319

Intersegment sales:
Ultragaz		1,587			1,680
Ipiranga		—			—
Oxiteno		1,609			862
Ultracargo		23,838			23,898
Extrafarma		—			—
Others ⁽¹⁾		19,673			20,883

Total		46,707			47,323

Net revenue from sales and services, excluding intersegment sales:
Ultragaz		2,574,021			2,158,198
Ipiranga		33,457,673			31,093,693
Oxiteno		1,911,371			1,863,563
Ultracargo		142,343			141,792
Extrafarma		737,113			657,073
Others ⁽¹⁾		—			—

Total		38,822,521			35,914,319

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)


	06/30/2016			06/30/2015
Operating income (expense):
Ultragaz		138,429			76,177
Ipiranga		1,087,640			994,752
Oxiteno		238,075			275,085
Ultracargo		53,218			(22,175	)
Extrafarma		(2,579	)		3,555
Others ⁽¹⁾		2,165			26,848

Total		1,516,948			1,354,242

Share of profit of joint-ventures and associates:
Ultragaz		(1	)		(26	)
Ipiranga		(10,049	)		(9,929	)
Oxiteno		608			1,622
Ultracargo		(262	)		326
Others⁽¹⁾		12,745			8,535

Total		3,041			528

Financial income		220,927			203,160
Financial expenses		(659,843	)		(511,570	)

Income before income and social contribution taxes		1,081,073			1,046,360

Additions to property, plant, and equipment and intangible assets:
Ultragaz		155,145			131,617
Ipiranga		318,246			312,678
Oxiteno		103,126			49,364
Ultracargo		21,844			6,155
Extrafarma		44,601			31,419
Others ⁽¹⁾		4,179			12,122

Total additions to property, plant, and equipment and intangible assets (see Notes 12 and 13)		647,141			543,355
Asset retirement obligation – fuel tanks (see Note 19)		(160	)		(321	)
Capitalized borrowing costs		(11,024	)		(11,561	)

Total investments in property, plant, and equipment and intangible assets (cash flow)		635,957			531,473


Depreciation and amortization charges (excluding intersegment account balances):
Ultragaz	78,472	69,036
Ipiranga	341,986	294,366
Oxiteno	76,476	70,846
Ultracargo	21,460	20,751
Extrafarma	20,067	10,514
Others ⁽¹⁾	6,902	12,060

Total	545,363	477,573

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)


	06/30/2016		12/31/2015
Total assets (excluding intersegment account balances):
Ultragaz		2,238,462		2,195,314
Ipiranga		10,394,306		11,292,350
Oxiteno		4,283,152		4,148,716
Ultracargo		1,350,433		1,283,613
Extrafarma		1,686,726		1,570,024
Others ⁽¹⁾		559,791		476,032

Total		20,512,870		20,966,049

⁽¹⁾	Composed of the parent company Ultrapar (including goodwill of certain acquisitions) and subsidiaries Serma—Associação dos Usuários de Equipamentos de Processamento de Dados e Serviços Correlatos (“Serma”) and Imaven Imóveis Ltda.

Geographic Area Information

The fixed and intangible assets of the Company and its subsidiaries are located in Brazil, except those related to Oxiteno’ plants abroad, as shown below:


	06/30/2016⁽¹⁾		12/31/2015
United States of America		197,217		201,286
Mexico		109,569		140,759
Uruguay		66,282		79,408
Venezuela		2,494		4,364

⁽¹⁾	The decrease in fixed and intangible assets as of June 30, 2016, is substantially due to the valuation of the Real against the functional currencies of the foreign subsidiaries used in the translation of information.

The Company generates revenue from operations in Brazil, Mexico, United Stated of America, Uruguay and Venezuela, as well as from exports of products to foreign customers, as disclosed below:


	06/30/2016		06/30/2015
Net revenue:
Brazil		38,261,863		35,332,097
Mexico		93,848		89,928
Uruguay		21,587		16,274
Venezuela		8,469		64,447
Other Latin American countries		228,609		180,987
United States of America and Canada		85,354		87,236
Far East		27,506		75,751
Europe		61,904		40,538
Others		33,381		27,061

Total		38,822,521		35,914,319

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

31	Risks and Financial Instruments (Consolidated)

Risk Management and Financial Instruments—Governance

The main risks to which the Company and its subsidiaries are exposed reflect strategic/operational and economic/financial aspects. Operational/strategic risks (including, but not limited to, demand behavior, competition, technological innovation, and material changes in the industry structure) are addressed by the Company’s management model. Economic/financial risks primarily reflect default of customers, behavior of macroeconomic variables, such as exchange and interest rates, as well as the characteristics of the financial instruments used by the Company and its subsidiaries and their counterparties. These risks are managed through control policies, specific strategies, and the establishment of limits.

The Company has a conservative policy for the management of resources, financial instruments, and risks approved by its Board of Directors (“Policy”). In accordance with the Policy, the main objectives of financial management are to preserve the value and liquidity of financial assets and ensure financial resources for the development of the business, including expansions. The main financial risks considered in the Policy are risks associated with currencies, interest rates, credit, and selection of financial instruments. Governance of the management of financial risks and financial instruments follows the segregation of duties below:

•

Implementation of the management of financial assets, instruments, and risks is the responsibility of the financial area, through its treasury department, with the assistance of the tax and accounting departments.

•

Supervision and monitoring of compliance with the principles, guidelines, and standards of the Policy is the responsibility of the Risk and Investment Committee, which is composed of members of the Company’s Executive Board (“Committee”). The Committee holds regular meetings and is in charge, among other responsibilities, of discussing and monitoring the financial strategies, existing exposures, and significant transactions involving investment, fundraising, or risk mitigation. The Committee monitors the risk standards established by the Policy through a monitoring map on a monthly basis.

•

Changes in the Policy or revisions of its standards are subject to the approval of the Board of Directors of Ultrapar.

•

Continuous improvement of the Policy is the joint responsibility of the Board of Directors, the Committee, and the financial area.

•

The internal audit department audits the compliance with the requirements of the Policy.

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

Currency Risk

Most transactions of the Company and its subsidiaries are located in Brazil and, therefore, the reference currency for risk management is the Brazilian Real. Currency risk management is guided by neutrality of currency exposures and considers the transactional, accounting, and operational risks of the Company and its subsidiaries and their exposure to changes in exchange rates. The Company considers as its main currency exposures the assets and liabilities in foreign currency and the short-term flow of net sales in foreign currency of Oxiteno.

The Company and its subsidiaries use exchange rate hedging instruments (especially between the Brazilian Real and the U.S. dollar) available in the financial market to protect their assets, liabilities, receipts, and disbursements in foreign currency and net investments in foreign operations. Hedge is used in order to reduce the effects of changes in exchange rates on the Company´s income and cash flows in Brazilian Reais within the exposure limits under its Policy. Such foreign exchange hedging instruments have amounts, periods, and rates substantially equivalent to those of assets, liabilities, receipts, and disbursements in foreign currencies to which they are related. Assets and liabilities in foreign currencies are stated below, translated into Brazilian Reais as of June 30, 2016 and December 31, 2015:

Assets and Liabilities in Foreign Currencies


In millions of Brazilian Reais	06/30/2016			12/31/2015
Assets in foreign currency
Cash, cash equivalents and financial investments in foreign currency (except hedging instruments)		187.6			147.8
Foreign trade receivables, net of allowance for doubtful accounts and advances to foreign customers		176.8			188.8
Net investments in foreign subsidiaries (except cash, cash equivalents, financial investments, trade receivables, financing, and payables)		536.1			611.4

		900.5			948.0

Liabilities in foreign currency
Financing in foreign currency		(2,245.0	)		(2,630.3	)
Payables arising from imports, net of advances to foreign suppliers		(34.2	)		(64.4	)

		(2,279.2	)		(2,694.7	)

Foreign currency hedging instruments		2,262.1			2,667.2

Net asset position – Total		883.4			920.5

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

Sensitivity Analysis of Assets and Liabilities in Foreign Currency

The table below shows the effect of exchange rate changes in different scenarios, based on the net asset position of R$ 883,4 million in foreign currency:


In millions of Brazilian Reais	Risk	Scenario I			Scenario II			Scenario III
		10%			25%			50%
(1) Income statement effect	Real devaluation		(2.5	)		(6.2	)		(12.4	)
(2) Shareholders’ equity effect			90.8			227.0			454.1

(1) + (2)	Net effect		88.3			220.8			441.7

(3) Income statement effect	Real appreciation		2.5			6.2			12.4
(4) Shareholders’ equity effect			(90.8	)		(227.0	)		(454.1	)

(3) + (4)	Net effect		(88.3	)		(220.8	)		(441.7	)

Gains (losses) directly recognized in equity in cumulative translation adjustments are due to changes in the exchange rate on equity of foreign subsidiaries (see Notes 2.r and 23.f—Cumulative Translation Adjustments).

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

Interest Rate Risk

The Company and its subsidiaries adopt conservative policies for borrowing and investing financial resources and for capital cost minimization. The financial investments of the Company and its subsidiaries are primarily held in transactions linked to the CDI, as set forth in Note 4. Borrowings primarily relate to financing from Banco do Brasil, BNDES, and other development agencies, as well as debentures and borrowings in foreign currency, as shown in Note 14.

The Company does not actively manage risks associated with changes in the level of interest rates and attempts to maintain its financial interest assets and liabilities at floating rates. As of June 30, 2016, the Company and its subsidiaries had interest rate derivative financial instruments linked to domestic loans, in which the Company swapped the fixed interest rate of certain debts to floating interest rates (CDI).

The table below shows the financial assets and liabilities exposed to floating interest rates as of June 30, 2016 and December 31, 2015:


In millions of Brazilian Reais
	Note		06/30/2016			12/31/2015
CDI
Cash equivalents		4		2,282.6			2,497.9
Financial investments		4		686.1			801.6
Asset position of foreign exchange hedging instruments—CDI		31		33.9			30.6
Loans and debentures		14		(5,780.9	)		(5,520.9	)
Liability position of foreign exchange hedging instruments—CDI		31		(2,302.2	)		(2,225.1	)
Liability position of hedging instruments from pre-fixed interest to CDI		31		(10.2	)		(27.8	)

Net liability position in CDI				(5,090.7	)		(4,443.7	)

TJLP
Loans –TJLP		14		(378.1	)		(420.8	)

Net liability position in TJLP				(378.1	)		(420.8	)

LIBOR
Asset position of foreign exchange hedging instruments—LIBOR		31		1,112.1			1,364.4
Loans—LIBOR		14		(1,426.6	)		(1,587.1	)

Net liability position in LIBOR				(314.5	)		(222.7	)

TIIE
Loans—TIIE		14		(21.0	)		(27.1	)

Net liability position in TIIE				(21.0	)		(27.1	)

SELIC
Loans – SELIC		14		(62.1	)		(30.9	)

Net liability position in SELIC				(62.1	)		(30.9	)

Total net liability position exposed to floating interest				(5,866.4	)		(5,145.2	)

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

Sensitivity Analysis of Floating Interest Rate Risk

The table below shows the incremental expenses and income that would be recognized in financial income as of June 30, 2016, due to the effect of floating interest rate changes in different scenarios:


In millions of Brazilian Reais
	Risk		Scenario I			Scenario II			Scenario III
			10%			25%			50%
Exposure of interest rate risk
Interest effect on cash equivalents and financial investments		Increase in CDI		16.7			41.7			83.6
Foreign exchange hedging instruments (assets in CDI) effect		Increase in CDI		0.2			0.4			0.8
Interest effect on debt in CDI		Increase in CDI		(39.2	)		(98.0	)		(196.1	)
Interest rate hedging instruments (liabilities in CDI) effect		Increase in CDI		(14.4	)		(36.1	)		(72.3	)

Incremental expenses				(36.7	)		(92.0	)		(184.0	)

Interest effect on debt in TJLP		Increase in TJLP		(1.4	)		(3.6	)		(7.1	)

Incremental expenses				(1.4	)		(3.6	)		(7.1	)

Foreign exchange hedging instruments (assets in LIBOR) effect		Increase in LIBOR		0.4			1.0			2.0
Interest effect on debt in LIBOR		Increase in LIBOR		(0.5	)		(1.3	)		(2.5	)

Incremental expenses				(0.1	)		(0.3	)		(0.5	)

Interest effect on debt in TIIE		Increase in TIIE		(0.0	)		(0.1	)		(0.2	)

Incremental expenses				(0.0	)		(0.1	)		(0.2	)

Interest effect on debt in SELIC		Increase in SELIC		(0.2	)		(0.6	)		(1.2	)

Incremental expenses				(0.2	)		(0.6	)		(1.2	)

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

Credit Risks

The financial instruments that would expose the Company and its subsidiaries to credit risks of the counterparty are basically represented by cash and bank deposits, financial investments, hedging instruments, and trade receivables.

Credit risk of financial institutions - Such risk results from the inability of financial institutions to comply with their financial obligations to the Company and its subsidiaries due to insolvency. The Company and its subsidiaries regularly conduct a credit review of the institutions with which they hold cash and cash equivalents, financial investments, and hedging instruments through various methodologies that assess liquidity, solvency, leverage, portfolio quality, etc. Cash and cash equivalents, financial investments, and hedging instruments are held only with institutions with a solid credit history, chosen for safety and soundness. The volume of cash and cash equivalents, financial investments, and hedging instruments are subject to maximum limits by each institution and, therefore, require diversification of counterparties.

Government credit risk - The Company’s policy allows investments in government securities from countries classified as investment grade AAA or Aaa by specialized credit rating agencies and in Brazilian government bonds. The volume of such financial investments is subject to maximum limits by each country and, therefore, requires diversification of counterparties.

Customer credit risk - Such risks are managed by each business unit through specific criteria for acceptance of customers and their credit rating and are additionally mitigated by the diversification of sales. No single customer or group accounts for more than 10% of total revenue.

The Company maintained the following allowances for doubtful accounts on trade receivables:


	06/30/2016		12/31/2015
Ipiranga		168,049		151,921
Ultragaz		32,090		28,136
Oxiteno		12,260		12,412
Extrafarma		6,195		5,376
Ultracargo		2,971		2,971

Total		221,565		200,816

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

Liquidity Risk

The Company and its subsidiaries’ main sources of liquidity derive from (i) cash, cash equivalents, and financial investments, (ii) cash generated from operations and (iii) financing. The Company and its subsidiaries believe that these sources are sufficient to satisfy their current funding requirements, which include, but are not limited to, working capital, capital expenditures, amortization of debt, and payment of dividends.

The Company and its subsidiaries periodically examine opportunities for acquisitions and investments. They consider different types of investments, either directly, through joint ventures, or through associated companies, and finance such investments using cash generated from operations, debt financing, through capital increases, or through a combination of these methods.

The Company and its subsidiaries believe to have enough working capital and sources of financing to satisfy their current needs. The gross indebtedness due over the next twelve months totals R$ 1,683.7 million, including estimated interests on loans (for quantitative information, see Note 14). Furthermore, the investment plan for 2016 totals R$ 1,809 million, and until June 30, 2016 the amount of R$ 659 million had been realized. As of June 30, 2016, the Company and its subsidiaries had R$ 3,292.8 million in cash, cash equivalents, and short-term financial investments (for quantitative information, see Note 4).

The table below presents a summary of financial liabilities as of June 30, 2016 to be settled by the Company and its subsidiaries, listed by maturity. The amounts disclosed in this table are the contractual undiscounted cash outflows, and, therefore, these amounts may be different from the amounts disclosed on the balance sheet as of June 30, 2016.


In millions of Brazilian Reais
Financial liabilities	Total		Less than 1 year		Between 1 and 3 years		Between 3 and 5 years		More than 5 years
Loans including future contractual interest⁽¹⁾⁽²⁾		11,161.5		1,683.7		7,482.2		1,555.4		440.2
Currency and interest rate hedging instruments⁽³⁾		324.7		214.3		110.4		—		—
Trade payables		1,018.8		1,018.8		—		—		—

⁽¹⁾

To calculate the estimated interest on loans some macroeconomic assumptions were used, including averaging for the period the following: (i) CDI of 13.0% p.a., (ii) exchange rate of the Real against the U.S. dollar of R$ 3.30 in 2016, R$ 3.54 in 2017, R$ 3.83 in 2018, R$ 4.11 in 2019 and R$ 4.39 in 2020, (iii) TJLP of 7.5% p.a. and (iv) IGP-M of 7.4% in 2016, 5.5% in 2017, 5.0% in 2018, 4.8% in 2019 and 4.8% in 2020 (source: BM&FBOVESPA, Bulletin Focus and financial institutions).

⁽²⁾	Includes estimated interest payments on short-term and long-term loans until the payment date.

⁽³⁾

The currency and interest rate hedging instruments were estimated based on projected U.S dollar futures contracts and the futures curve of DI x Pre contract quoted on BM&FBOVESPA on June 30, 2016 and on the futures curve of LIBOR (ICE—IntercontinentalExchange) on June 30, 2016. In the table above, only the hedging instruments with negative results at the time of settlement were considered.

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

Capital Management

The Company manages its capital structure based on indicators and benchmarks. The key performance indicators related to the capital structure management are the weighted average cost of capital, net debt / EBITDA, interest coverage, and indebtedness / equity ratios. Net debt is composed of cash, cash equivalents, and financial investments (see Note 4) and loans, including debentures (see Note 14). The Company can change its capital structure depending on the economic and financial conditions, in order to optimize its financial leverage and capital management. The Company seeks to improve its return on invested capital by implementing efficient working capital management and a selective investment program.

Selection and Use of Financial Instruments

In selecting financial investments and hedging instruments, an analysis is conducted to estimate rates of return, risks involved, liquidity, calculation methodology for the carrying value and fair value, and a review is conducted of any documentation applicable to the financial instruments. The financial instruments used to manage the financial resources of the Company and its subsidiaries are intended to preserve value and liquidity.

The Policy contemplates the use of derivative financial instruments only to cover identified risks and in amounts consistent with the risk (limited to 100% of the identified risk). The risks identified in the Policy are described in the above sections, and are subject to risk management. In accordance with the Policy, the Company and its subsidiaries can use forward contracts, swaps, options, and futures contracts to manage identified risks. Leveraged derivative instruments are not permitted. Because the use of derivative financial instruments is limited to the coverage of identified risks, the Company and its subsidiaries use the term “hedging instruments” to refer to derivative financial instruments.

As mentioned in the section “Risk Management and Financial Instruments – Governance”, the Committee monitors compliance with the risk standards established by the Policy through a risk map, including the use of hedging instruments, on a monthly basis. In addition, the internal audit department verifies the compliance with the requirements of the Policy.

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

The table below summarizes the position of hedging instruments entered into by the Company and its subsidiaries:


Hedging instruments	Counterparty		Maturity		Notional amount¹						Fair value						Amounts receivable			Amounts payable
					06/30/2016			12/31/2015			06/30/2016			12/31/2015			06/30/2016
											R$ million			R$ million			R$ million			R$ million
a – Exchange rate swaps receivable in U.S. dollars		Bradesco, BTMU, Citibank, Itaú, JP Morgan, Santander, Scotiabank
Receivables in U.S. dollars (LIBOR)				Jul 2016 to Nov 2018		US$ 350.0			US$ 350.0			1,112.1			1,364.4			1,112.1			—
Receivables in U.S. dollars (Fixed)						US$ 366.1			US$ 334.5			1,181.2			1,335.1			1,181.2			—
Payables in CDI interest rate						US$ (716.1	)		US$ (684.5	)		(2,302.2	)		(2,225.1	)		—			2,302.2

Total result						—			—			(8.9	)		474.4			2,293.3			2,302.2

b – Exchange rate swaps payable in U.S. dollars + COUPON		Bradesco, Citibank, Itaú, Santander		Jul 2016 to Oct 2016
Receivables in CDI interest rates						US$ 9.7			US$ 7.9			33.9			30.6			33.9			—
Payables in U.S. dollars (Fixed)						US$ (9.7	)		US$ (7.9	)		(31.2	)		(32.3	)		—			31.2

Total result						—			—			2.7			(1.7	)		33.9			31.2

c – Interest rate swaps in R$		Itaú		Aug 2016
Receivables in fixed interest rate						R$ 10.0			R$ 27.5			10.1			27.4			10.1			—
Payables in CDI interest rate						R$ (10.0	)		R$ (27.5	)		(10.2	)		(27.8	)		—			10.2

Total result						—			—			(0.1	)		(0.4	)		10.1			10.2

Total gross result												(6.3	)		472.3			2,337.3			2,343.6
Income tax												(38.8	)		(86.0	)		(38.8	)		—

Total net result												(45.1	)		386.3			2,298.5			2,343.6

Positive result (see Note 4)												194.1			433.7
Negative result (see Note 14)												(239.2	)		(47.4	)

⁽¹⁾	In million. Currency as indicated.

All transactions mentioned above were properly registered with CETIP S.A.

Hedging instruments existing as of June 30, 2016 are described below, according to their category, risk, and hedging strategy:

a - Hedging against foreign exchange exposure of liabilities in foreign currency—The purpose of these contracts is (i) to offset the effect of the change in exchange rates of debts or firm commitments in U.S. dollars by converting them into debts or firm commitments in Brazilian Reais linked to CDI, (ii) firm commitments in U.S. dollars, changing them into debts or firm commitments in Reais indexed to the CDI and (iii) change a financial investment linked to the CDI and given as a guarantee to a loan in the U.S. dollar into a financial investment linked to the U.S. dollar. As of June 30, 2016, the Company and its subsidiaries had outstanding swap contracts totaling US$ 716.1 million in notional amount with a liability position, on average of 94.9% of CDI, of which US$ 366.1 million, on average, had an asset position at US$ + 1.29% p.a. and US$ 350.0 million had an asset position at US$ + LIBOR + 0.87% p.a. This amount includes US$ 440.0 million related to the fair value of hedging instruments of Ipiranga’ debt (see Notes 14.b and “hedge accounting” below) and US$ 173.2 million related to hedging instruments of cash flow of firm commitment (see “hedge accounting” below).

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

b - Hedging against foreign exchange exposure of operations—The purpose of these contracts is to make the exchange rate of the revenues of subsidiaries Oleoquímica, Oxiteno S.A. and Oxiteno Nordeste equal to the exchange rate of the cost of their main raw materials during their operating cycles. As of June 30, 2016, these swap contracts totaled US$ 9.7 million and, on average, had an asset position at 70.2% of CDI and a liability position at US$ + 0.0% p.a.

c - Hedging against the interest rate fixed in local financing—The purpose of these contracts is to convert the interest rate on financing contracted in Brazilian Reais from fixed into floating. As of June 30, 2016 these swap contracts totaled R$ 10.0 million of notional amount corresponding to principal amount of related debt, and on average had an asset position at 8.0% p.a. and a liability position at 79.9% of CDI.

Hedge Accounting

The Company and its subsidiaries test, throughout the duration of the hedge, the effectiveness of their derivatives, as well as the changes in their fair value. The Company and its subsidiaries designate as fair value hedges certain derivative financial instruments used to offset the variations in interest and exchange rates, which are based on the market value of financing contracted in Brazilian Reais and U.S. dollars.

On June 30, 2016, the notional amount of foreign exchange hedging instruments designated as fair value hedge totaled US$ 440.0 million. In 2016, a loss of R$ 392.1 million related to the result of hedging instruments, a gain of R$ 9.8 million related to the fair value adjustment of debt, and a gain of R$ 291.9 million related to the financial expense of the debt were recognized in the income statements, transforming the average effective cost of the operation into 101.9% of CDI (see Note 14.b.1).

On June 30, 2016, the notional amount of exchange rate hedging instruments of firm commitments designated as cash flow hedges totaled US$ 173.2 million, and a loss of R$ 53.9 million was recognized through the income statement. On June 30, 2016, the unrealized loss of “Other comprehensive income” is R$ 78.7 million.

On June 30, 2016, the notional amount of interest rate hedging instruments totaled R$ 10.0 million, referring to the principal of the pre-fixed loans in Brazilian Reais. In 2016, a gain of R$ 0.1 million related to the result of hedging instruments, a loss of R$ 0.5 million related to the fair value adjustment of debt, and a loss of R$ 0.6 million related to the accrued interest rate of the debt were recognized in the income statement, transforming the average effective cost of the operations into 79.9% of CDI.

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

Gains (losses) on Hedging Instruments

The following tables summarize the value of gains (losses) recognized, which affected the shareholders’ equity as of June 30, 2016 and 2015 of the Company and its subsidiaries:


	R$ million
	06/30/2016
	Profit or loss			Equity
a – Exchange rate swaps receivable in U.S. dollars (i) (ii)		(88.0	)		(78.7	)
b – Exchange rate swaps payable in U.S. dollars (ii)		8.8			—
c – Interest rate swaps in R$ (iii)		(0.4	)		—

Total		(79.6	)		(78.7	)


	R$ million
	06/30/2015
	Profit or loss			Equity
a – Exchange rate swaps receivable in U.S. dollars (i) (ii)		(46.9	)		—
b – Exchange rate swaps payable in U.S. dollars (ii)		1.7			(7.9	)
c – Interest rate swaps in R$ (iii)		1.8			—

Total		(43.4	)		(7.9	)

(i)	Does not consider the effect of exchange rate variation of exchange swaps receivable in U.S. dollars when this effect is offset in the gain or loss of the hedged item (debt/firm commitments).

(ii)	Considers the designation effect of foreign exchange hedging.

(iii)

Considers the designation effect of interest rate hedging in Brazilian Reais.

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

Fair Value of Financial Instruments

The fair values and the carrying values of the financial instruments, including currency and interest rate hedging instruments, as of June 30, 2016 and December 31, 2015, are stated below:


					06/30/2016				12/31/2015
	Category		Note		Carrying value		Fair value		Carrying value		Fair value
Financial assets:
Cash and cash equivalents
Cash and bank deposits		Loans and receivables		4		127,877		127,877		192,016		192,016
Financial investments in local currency		Measured at fair value through profit or loss		4		2,282,591		2,282,591		2,497,903		2,497,903
Financial investments in foreign currency		Measured at fair value through profit or loss		4		92,688		92,688		12,974		12,974
Financial investments
Fixed-income securities and funds in local currency		Available for sale		4		678,640		678,640		790,969		790,969
Fixed-income securities and funds in local currency		Held to maturity		4		7,449		7,449		10,618		10,618
Fixed-income securities and funds in foreign currency		Available for sale		4		33,287		33,287		35,013		35,013
Currency and interest rate hedging instruments		Measured at fair value through profit or loss		4		194,175		194,175		433,669		433,669

Total						3,416,707		3,416,707		3,973,162		3,973,162

Financial liabilities:
Financing		Measured at fair value through profit or loss		14		1,388,776		1,388,776		1,715,405		1,715,405
Financing		Measured at amortized cost		14		4,497,097		4,439,660		4,846,649		4,686,178
Debentures		Measured at amortized cost		14		2,747,579		2,723,739		2,246,215		2,233,313
Finance leases		Measured at amortized cost		14		49,950		49,950		45,894		45,894
Currency and interest rate hedging instruments		Measured at fair value through profit or loss		14		239,238		239,238		47,445		47,445
Subscription warrants – indemnification		Measured at fair value through profit or loss		22		157,133		157,133		112,233		112,233

Total						9,079,773		8,998,496		9,013,841		8,840,468

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

The fair value of financial instruments, including currency and interest hedging instruments, was determined as follows:

•

The fair value of cash and bank deposit balances are identical to their carrying values.

•

Financial investments in investment funds are valued at the value of the fund unit as of the date of the reporting period, which corresponds to their fair value.

•

Financial investments in CDBs (Bank Certificates of Deposit) and similar investments offer daily liquidity through repurchase at the “yield curve” and, therefore, the Company believes their fair value corresponds to their carrying value.

•

The subscription warrants – indemnification were measured based on the share price of Ultrapar (UGPA3) at the reporting date and are adjusted to the Company’s dividend yield, since the exercise is only possible starting in 2020 onwards and they are not entitled to dividends until then. The number of shares of subscription warrants – indemnification is also adjusted according to the changes in the amounts of provision for tax, civil, and labor risks and contingent liabilities related to the period prior to January 31, 2014.

The fair value of other financial investments and financing was determined using calculation methodologies commonly used for mark-to-market reporting, which consist of calculating future cash flows associated with each instrument adopted and adjusting them to present value at the market rates as of June 30, 2016 and December 31, 2015. For some cases where there is no active market for the financial instrument, the Company and its subsidiaries can use quotes provided by the transaction counterparties.

The interpretation of market information on the choice of calculation methodologies for the fair value requires considerable judgment and estimates to obtain a value deemed appropriate to each situation. Consequently, the estimates presented do not necessary indicate the amounts that may be realizable in the current market.

Financial instruments were classified as loans and receivables or financial liabilities measured at amortized cost, except (i) all exchange rate and interest rate hedging instruments, which are measured at fair value through profit or loss, (ii) financial investments classified as measured at fair value through profit or loss, (iii) financial investments that are classified as available for sale, which are measured at fair value through other comprehensive income (see Note 4), (iv) loans and financing measured at fair value through profit or loss (see Note 14), (v) guarantees to customers that have vendor arrangements (see Note 14.j), which are measured at fair value through profit or loss, and (vi) subscription warrants – indemnification, which are measured at fair value through profit or loss (see Note 22). The financial investments classified as held-to-maturity are measured at amortized cost. Cash, banks, and trade receivables are classified as loans and receivables. Trade payables and other payables are classified as financial liabilities measured at amortized cost.

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

Fair Value Hierarchy of Financial Instruments

The financial instruments are classified in the following categories:

(a)	Level 1—prices negotiated (without adjustment) in active markets for identical assets or liabilities;

(b)	Level 2—inputs other than prices negotiated in active markets included in Level 1 and observable for the asset or liability, either directly (as prices) or indirectly (derived from prices); and

(c)	Level 3—inputs for the asset or liability which are not based on observable market variables (unobservable inputs).

The table below shows a summary of the financial assets and financial liabilities measured at fair value in the Company’s and its subsidiaries as of June 30, 2016 and December 31, 2015:


	Category		Note		06/30/2016		Level 1		Level 2		Level 3
Financial assets:
Cash equivalents
Cash and banks		Loans and receivables		4		127,877		127,877		—		—
Financial investments in local currency		Measured at fair value through profit or loss		4		2,282,591		2,282,591		—		—
Financial investments in foreign currency		Measured at fair value through profit or loss		4		92,688		92,688		—		—
Financial investments
Fixed-income securities and funds in local currency		Available for sale		4		678,640		678,640		—		—
Fixed-income securities and funds in local currency		Held to maturity		4		7,449		7,449		—		—
Fixed-income securities and funds in foreign currency		Available for sale		4		33,287		26,031		7,256		—
Currency and interest rate hedging instruments		Measured at fair value through profit or loss		4		194,175		—		194,175		—

Total						3,416,707		3,215,276		201,431		—

Financial liabilities:
Financing		Measured at fair value through profit or loss		14		1,388,776		—		1,388,776		—
Financing		Measured at amortized cost		14		4,439,660		—		4,439,660		—
Debentures		Measured at amortized cost		14		2,723,739		—		2,723,739		—
Finance leases		Measured at amortized cost		14		49,950		—		49,950		—
Currency and interest rate hedging instruments		Measured at fair value through profit or loss		14		239,238		—		239,238		—
Subscription warrants – indemnification ⁽¹⁾		Measured at fair value through profit or loss		22		157,133		—		157,133		—

Total						8,998,496		—		8,998,496		—

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)


	Category		Note		12/31/2015		Level 1		Level 2		Level 3
Financial assets:
Cash equivalents
Cash and banks		Loans and receivables		4		192,016		192,016		—		—
Financial investments in local currency		Measured at fair value through profit or loss		4		2,497,903		2,497,903		—		—
Financial investments in foreign currency		Measured at fair value through profit or loss		4		12,974		12,974		—		—
Financial investments
Fixed-income securities and funds in local currency		Available for sale		4		790,969		790,969		—		—
Fixed-income securities and funds in local currency		Held to maturity		4		10,618		10,618		—		—
Fixed-income securities and funds in foreign currency		Available for sale		4		35,013		25,615		9,398		—
Currency and interest rate hedging instruments		Measured at fair value through profit or loss		4		433,669		—		433,669		—

Total						3,973,162		3,530,095		443,067		—

Financial liabilities:
Financing		Measured at fair value through profit or loss		14		1,715,405		—		1,715,405		—
Financing		Measured at amortized cost		14		4,686,178		—		4,686,178		—
Debentures		Measured at amortized cost		14		2,233,313		—		2,233,313		—
Finance leases		Measured at amortized cost		14		45,894		—		45,894		—
Currency and interest rate hedging instruments		Measured at fair value through profit or loss		14		47,445		—		47,445		—
Subscription warrants – indemnification ⁽¹⁾		Measured at fair value through profit or loss		22		112,233		—		112,233		—

Total						8,840,468		—		8,840,468		—

⁽¹⁾	Refers to subscription warrants issued by the Company in the Extrafarma acquisition. For further information, see Note 22.

Sensitivity Analysis

The Company and its subsidiaries use derivative financial instruments only to hedge against identified risks and in amounts consistent with the risk (limited to 100% of the identified risk). Thus, for purposes of sensitivity analysis of market risks associated with financial instruments, as required by CVM Instruction 475/08, the Company analyzes the hedging instrument and the hedged item together, as shown on the charts below.

For the sensitivity analysis of foreign exchange hedging instruments, management adopted as a likely scenario the Real/U.S. dollar exchange rates at maturity of each swap, projected by U.S dollar futures contracts quoted on BM&FBOVESPA as of June 30, 2016. As a reference, the exchange rate for the last maturity of foreign exchange hedging instruments is R$ 3.93 in the likely scenario. Scenarios II and III were estimated with a 25% and 50% additional appreciation or depreciation of the Brazilian Real against the likely scenario, according to the risk to which the hedged item is exposed.

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

Based on the balances of the hedging instruments and hedged items as of June 30, 2016, the exchange rates were replaced, and the changes between the new balance in Brazilian Reais and the original balance in Brazilian Reais as of June 30, 2016 were calculated in each of the three scenarios. The table below shows the change in the values of the main derivative instruments and their hedged items, considering the changes in the exchange rate in the different scenarios:


	Risk		Scenario I (likely)			Scenario II			Scenario III
Currency swaps receivable in U.S. dollars
(1) U.S. Dollar / Real swaps		Dollar		262,298			904,006			1,545,714
(2) Debts/firm commitments in dollars		appreciation		(262,299	)		(904,037	)		(1,545,775	)

(1)+(2)		Net effect		(1	)		(31	)		(61	)

Currency swaps payable in U.S. dollars
(3) Real / U.S. Dollar swaps		Dollar		(418	)		7,439			15,296
(4) Gross margin of Oxiteno		devaluation		418			(7,439	)		(15,296	)

(3)+(4)		Net effect		—			—			—

For sensitivity analysis of hedging instruments for interest rates in Brazilian Reais, the Company used the futures curve of the DI x Pre contract on BM&FBOVESPA as of June 30, 2016 for each of the swap and debt (hedged item) maturities, to determine the likely scenarios. Scenarios II and III were estimated based on a 25% and 50% deterioration, respectively, of the likely scenario pre-fixed interest rate.

Based on the three scenarios of interest rates in Brazilian Reais, the Company estimated the values of its debt and hedging instruments according to the risk which is being hedged (variations in the pre-fixed interest rates in Brazilian Reais), by projecting them to future value at the contracted rates and bringing them to present value at the interest rates of the estimated scenarios. The results are shown in the table below:


	Risk		Scenario I (likely)		Scenario II			Scenario III
Interest rate swap (in R$)
(1) Fixed rate swap—CDI		Decrease in		—		24			53
(2) Fixed rate financing		Pre-fixed rate		—		(24	)		(53	)

(1)+(2)		Net effect		—		—			—

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

32	Commitments (Consolidated)

a.	*Contracts*

Subsidiary Tequimar has agreements with CODEBA and Complexo Industrial Portuário Governador Eraldo Gueiros, in connection with its port facilities in Aratu and Suape, respectively. Such agreements establish a minimum cargo movement of products, as shown below:


Port	Minimum movement in tons per year		Maturity
Aratu		100,000		2016
Aratu		900,000		2022
Suape		250,000		2027
Suape		400,000		2029

If the annual movement is less than the minimum contractual movement, the subsidiary is liable to pay the difference between the effective movement and the minimum contractual movement, based on the port tariff rates in effect on the date established for payment. As of June 30, 2016, these rates were R$ 6.99 per ton for Aratu and R$ 2.90 per ton for Suape. The subsidiary has met the minimum cargo movement required since the beginning of the contractual agreements.

Subsidiary Oxiteno Nordeste has a supply agreement with Braskem S.A. which establishes a minimum annually consumption level of ethylene, calculated quarterly, and conditions for the supply of ethylene until 2021. The minimum purchase commitment clause provided for a minimum annual consumption of 190 thousand tons in 2016. The minimum purchase commitment and the actual demand accumulated to June 30, 2016 and 2015, expressed in tons of ethylene, are shown below. Should the minimum purchase commitment not be met, the subsidiary would be liable for a fine of 40% of the current ethylene price for the quantity not purchased. The subsidiary met the minimum purchase required in the agreement, according to contractual conditions and tolerance.


	*Minimum purchase commitment ()**				Accumulated demand (actual)
In tons of ethylene	06/30/2016		06/30/2015		06/30/2016		06/30/2015
1^st quarter		47,240		37,743		47,196		44,352
2^nd quarter		47,240		46,596		53,530		51,112

(*)	Adjusted for scheduled shutdowns in Braskem S.A. during the periods.

Subsidiary Oxiteno S.A. has a supply agreement with Braskem S.A., valid until 2023, which establishes and regulates the conditions for supply of ethylene to Oxiteno based on the international market for this product. The minimum purchase is 22,050 tons of ethylene semiannually. The minimum purchase commitment and the actual demand accumulated to June 30, 2016 and 2015, expressed in tons of ethylene, are shown below. Should the minimum purchase commitment not be met, the subsidiary would be liable for a fine of 30% of the current ethylene price for the quantity not purchased. The subsidiary met the minimum purchase required in the agreement, according to contractual conditions and tolerance.

Minimum purchase commitment (*)

Accumulated demand (actual)

In tons of ethylene

06/30/2016

06/30/2015

06/30/2016

06/30/2015

1^st Semester

17,688

20,101

18,423

17,669

(*)	Adjusted for scheduled shutdowns in Braskem S.A. during the periods.

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

b.	*Insurance Coverage in Subsidiaries*

The Company maintains appropriate insurance policies with the objective of covering several risks to which it is exposed, including loss of profits, losses and damage from fire, lightning, explosion of any kind, gale, aircraft crash, electric damage, and other risks, covering the industrial plants and distribution bases and branches of all subsidiaries. The maximum compensation values based on the risk analysis of maximum possible losses of certain locations are shown below:


	Maximum compensation *value ()**
Oxiteno	US$	1,062
Ipiranga	R$	770
Ultracargo	R$	550
Ultragaz	R$	300
Extrafarma	R$	135

(*)	In millions. In accordance with policy conditions.

The General Liability Insurance program covers the Company and its subsidiaries with a maximum aggregate coverage of US$ 400 million against losses caused to third parties as a result of accidents related to commercial and industrial operations and/or distribution and sale of products and services.

The Company maintains liability insurance policies for directors and executive officers (D&O) to indemnify the members of the Board of Directors, fiscal council and executive officers of Ultrapar and its subsidiaries (“Insured”) in the total amount of US$ 50 million, which cover any of the Insured liabilities resulting from wrongful acts, including any act or omission committed or attempted, except if the act, omission or the claim is consequence of gross negligence or willful misconduct.

In addition, group life and personal accident, health and national and international transportation and other insurance policies are also maintained.

The coverage and limit of the insurance policies are based on a careful study of risks and losses conducted by independent insurance advisors. The type of insurance is considered by management to be sufficient to cover potential losses based on the nature of the business conducted by the companies.

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

c.	*Operating Lease Contracts*

Subsidiaries Cia. Ultragaz, Bahiana, Tequimar, Serma, and Oxiteno S.A. have operating lease contracts for the use of IT equipment. These contracts have terms of 36 and 45 months. The subsidiaries have the option to purchase the assets at a price equal to the fair market price on the date of option, and management does not intend to exercise such option. Subsidiaries Cia. Ultragaz and Bahiana have operating lease contracts related to vehicles in their fleet. These contracts have terms of 24 to 60 months and there is no purchase option. The future disbursements (installments), assumed under these contracts, amount approximately to:


	Up to 1 year		Between 1 and 5 years		More than 5 years		Total
06/30/2016		24,320		32,462		—		56,782

The subsidiaries IPP, Extrafarma, and Cia. Ultragaz have operating lease contracts related to land and building of service stations, drugstores, and stores, respectively. The future disbursements and receipts (installments), arising from these contracts, amount approximately to:


		Up to 1 year			Between 1 and 5 years			More than 5 years			Total
06/30/2016	payable		100,872			279,585			145,451			525,908
	receivable		(47,946	)		(143,654	)		(70,880	)		(262,480	)

The expense recognized for the six-month period ended June 30, 2016 for operating leases was R$ 47,967 (R$ 51,756 for the six-month period ended June 30, 2015), net of sublease income.

Ultrapar Participações S.A. and Subsidiaries

Notes to the Individual and Consolidated Interim Financial Information

(In thousands of Brazilian Reais, unless otherwise stated)

33	Ultracargo – Fire Accident in Santos

On April 2, 2015, part of the storage facilities operated by Ultracargo in Santos, in the State of São Paulo, endured a nine-day fire accident surrounding six ethanol and gasoline tanks. The six tanks represented 4% of Ultracargo’s overall capacity in Brazil as of December 31, 2014. There were no casualties and the cause of such accident and its impacts are still being investigated, including the extent of operational losses, damage to assets, potential environmental damages (see Note 20.b.2.2) and other liabilities and reputational harm. The Company maintains insurance policies to cover certain risks to which the subsidiaries are exposed (see Note 32.b).

On April 9, 2015, the Santos municipal government suspended Ultracargo’s activities in that city. Ultracargo’s operations in Santos comprise two separate areas. On April 27, 2015, the municipal government granted Ultracargo the authorization to resume its operations in the area not affected by the accident as published in the Santos Official Gazette (Diário Oficial de Santos). The operations corresponding to 185 thousand cubic meters capacity, or 22.5% of Ultracargo’s overall capacity in Brazil, are still suspended.

The decommissioning plan is in progress, which comprises the removal of equipment and structures of the terminal affected by the fire. This process will allow the conclusion of investigation, as well as allow the start of the work to restore the affected area.

According to its services contracts with clients, Ultracargo has the obligation to hire insurance coverage and any indemnification will be paid by the insurer, according to the respective insurer’s analysis and processing terms for the insurance loss adjustment. In the six-month period ended June 30, 2016, Ultracargo signed an agreement with certain customers to advance the insurance indemnities and accrued the amount of R$ 140,246 in liabilities and recognized a receivables from the insurer in the same amount as an indemnification asset. Until June 30, 2016, Ultracargo paid advances to a customer in the amount of R$ 99,062, remaining a balance of R$ 41,184 in current liabilities.

The balance of R$ 164,330 of indemnification asset classified as current assets, includes R$ 24,083 of loss in inventories of Ipiranga.Such amounts are covered by insurance and were comunicated to the insurer for inclusion in the loss adjustment process, whose conclusion and corresponding indemnification to the clients depends on completion of the Criminalistics Institute assessment, and are not expected to materially affect the results of the Company.

In addition, the Company has lawsuits and extrajudicial claims, for third-party and customers indemnification, related to damages and losses, presented until the date of these interim financial statements. Such lawsuits and claims are entitled to insurance coverage and are being analyzed by the insurers. The amounts of contingent liabilities relating to lawsuits and extrajudicial claims is R$ 100,252 and R$ 57,597, respectively.

Finally, Ultracargo pleaded advances related to expenses with rescue and containment and loss of profit, which were included in the loss adjustment by the insurers, in the amounts of R$ 50,818 and R$ 40,453, respectively. In the first quarter of 2016, Ultracargo received R$ 29,751 from the insurer related to reimbursement of rescue and containment expenses and in the second quarter of 2016, Ultracargo received R$ 30,000 from the insurer related to loss of profit. Both receipts were recognized in the income statement. The balance of contingent assets will be recognized when received or approved by the insurer.

34	Subsequent Event

On August 4, 2016, the Company, through its subsidiary IPP entered into an association with Chevron Brasil Lubrificantes Ltda. (“Chevron”) to create a new company in the lubricants business. Under this agreement, the association will be formed by Ipiranga’s and Chevron’s lubricants operations in Brazil. Ipiranga and Chevron will own 56% and 44%, respectively, of the new company’s capital. This transaction is subject to approval of the competent regulatory authorities, notably the Brazilian antitrust regulation agency—CADE.

LOGO

ULTRAPAR PARTICIPAÇÕES S.A.

MD&A—ANALYSIS OF CONSOLIDATED EARNINGS

Second Quarter 2016

(1)

Selected financial information:


(R$ million)	2Q16			2Q15			1Q16			Variation 2Q16 X 2Q15			Variation 2Q16 X 1Q16			1H16			1H15			Variação 1H16 X 1H15
(R$ million)	2Q16			2Q15			1Q16			Variation 2Q16 X 2Q15			Variation 2Q16 X 1Q16			1H16			1H15			Variação 1H16 X 1H15
Net revenue from sales and services		19.298,2			18.510,7			19.524,3			4	%		-1	%		38.822,5			35.914,3			8	%
Cost of products and services sold		(17.604,9	)		(16.968,0	)		(17.806,1	)		4	%		-1	%		(35.411,0	)		(32.789,6	)		8	%
Gross profit		1.693,3			1.542,7			1.718,2			10	%		-1	%		3.411,6			3.124,8			9	%
Selling, marketing, general and administrative expenses		(1.005,2	)		(923,2	)		(963,0	)		9	%		4	%		(1.968,2	)		(1.795,4	)		10	%
Other operating income, net		40,2			(21,2	)		35,4			N/A			13	%		75,6			0,3			N/A
Gain on disposal of property, plant and equipment and intangibles		(2,1	)		2,4			0,1			N/A			N/A			(2,0	)		24,6			N/A
Operating income		726,2			600,6			790,7			21	%		-8	%		1.516,9			1.354,2			12	%
Financial expenses, net		(222,5	)		(127,2	)		(216,5	)		75	%		3	%		(438,9	)		(308,4	)		42	%
Share of profit of joint ventures and associates		6,3			3,4			(3,3	)		83	%		N/A			3,0			0,5			N/A
Income before income and social contribution taxes		510,1			476,9			571,0			7	%		-11	%		1.081,1			1.046,4			3	%
Income and social contribution taxes – current and deferred		(173,4	)		(167,5	)		(205,3	)		4	%		-16	%		(378,7	)		(366,0	)		3	%
Income and social contribution taxes – tax incentives		30,5			21,7			22,1			41	%		38	%		52,6			37,3			41	%
Net income		367,1			331,1			387,9			11	%		-5	%		755,0			717,7			5	%
Net income attributable to Ultrapar		364,2			328,6			385,2			11	%		-5	%		749,4			713,4			5	%
Net income attributable to non-controlling interests in subsidiaries		3,0			2,5			2,6			18	%		12	%		5,6			4,3			32	%
*EBITDA ^()**		1.007,8			845,8			1.057,6			19	%		-5	%		2.065,4			1.832,3			13	%

Volume – LPG sales – thousand tons		446,7			430,1			407,0			4	%		10	%		853,6			833,3			2	%
Volume – Fuels sales – thousand of cubic meters		5.948,0			6.432,7			5.934,2			-8	%		0	%		11.882,2			12.562,6			-5	%
Volume – Chemicals sales – thousand tons		183,7			192,6			181,5			-5	%		1	%		365,2			367,7			-1	%

(*)

For further information on EBITDA, see note (1) on page 99.

Considerations on the financial and operational information

Standards and criteria adopted in preparing the information

The financial information presented in this document has been prepared according to International Financial Reporting Standards (IFRS). The financial information of Ultrapar corresponds to the company’s consolidated information. The information of Ipiranga, Oxiteno, Ultragaz, Ultracargo and Extrafarma is reported without elimination of intercompany transactions. Therefore, the sum of such information may not correspond to the consolidated information of Ultrapar. In addition, the financial and operational information presented in this document is subject to rounding off and, consequently, the total amounts presented in the tables and charts may differ from the direct sum of the amounts that precede them.

(2)

Performance Analysis:

Ultrapar

Net revenue from sales and services: Ultrapar’s consolidated net sales and services in 2Q16 increased by 4% compared to 2Q15, reaching R$ 19,298 million, due to the revenues growth in Ipiranga, Ultragaz, Ultracargo and Extrafarma. Compared to 1Q16, Ultrapar’s net sales and services decreased by 1%, mainly due to Ipiranga and Oxiteno, which reported lower net revenue in this comparison basis. In 1H16, Ultrapar’s net sales and services increased by 8% compared with 1H15, totaling R$ 38,823 million.

Cost of products and services sold: In 2Q16, Ultrapar’s cost of products and services sold increased by 4% compared to 2Q15, totaling R$ 17,605 million, due to the increased cost of products and services sold in all business units, except Oxiteno that remained stable. Compared with 1Q16, Ultrapar’s cost of products and services sold decreased by 1%, as a result of the decrease in cost of products and services sold in Ipiranga and Oxiteno. In 1H16, Ultrapar’s cost of products and services sold increased by 8% compared with 1H15, totaling R$ 35,411 million.

Gross profit: Ultrapar’s gross profit amounted to R$ 1,693 million in 2Q16, up 10% over 2Q15, as a consequence of the growth in the gross profit in Ipiranga, Ultragaz and Extrafarma. Compared with 1Q16, Ultrapar’s gross profit decreased by 1%, due to the decrease in Oxiteno. In 1H16, Ultrapar’s gross profit increased by 9% compared with 1H15, totaling R$ 3,412 million.

Selling, marketing, general and administrative expenses: Ultrapar’s selling, marketing, general and administrative expenses totaled R$ 1,005 million in 2Q16, an increase of 9% over 2Q15, due to the increase in expenses in all business unit, except Oxiteno and Ultracargo. Compared with 1Q16, Ultrapar’s selling, marketing, general and administrative expenses increased by 4%. In 1H16, Ultrapar’s selling, marketing, general and administrative expenses increased by 10% compared with 1H15, totaling R$ 1,968 million.

Other operating results, net: In 2Q16, “Other operating results, net” amounted to a net expense of R$ 40 million compared to a net income of R$ 21 million in 2Q15 and a net revenue of R$ 35 million in 1Q16. In 2Q16, the amount is explained by (i) a revenue of R$ 30 million gain from insurance advances related to lost profits in 2015 with the fire at Ultracargo’s terminal in Santos and (ii) higher revenues from the strategy of constant innovation in services and convenience in Ipiranga, partially offset by R$ 12 million spending on fire in Santos. In 1H16, “Other operating results, net” totaled net revenue of R$ 76 million.

Depreciation and amortization: Total depreciation and amortization costs and expenses in 2Q16 amounted to R$ 275 million, a 14% increase over 2Q15, as a result of investments made during the last 12 months, especially in the expansion of Ipiranga’s service station network. Compared to 1Q16, total depreciation and amortization costs and expenses increased 2%. In 1H16, total depreciation and amortization costs and expenses amounted to R$ 545 million, a 14% growth over the 1H15.

Operating income: Ultrapar’s operating income amounted to R$ 726 million in 2Q16, up 21% over 2Q15, as a result of the increase in the operating income of Ipiranga and Ultragaz. Compared with 1Q16, Ultrapar’s operating income decreased by 8%, as a result of the decrease in the operating income of Oxiteno. In 1H16, Ultrapar’s operating income amounted to R$ 1,517 million, 12% higher than in 1H15.

Financial result: Ultrapar’s net debt as of June 30, 2016 was R$ 5.5 billion (1.3 times LTM EBITDA), compared to R$ 5.0 billion as of June 2015 (1.4 times LTM EBITDA). Ultrapar reported net financial expenses of R$ 222 million in 2Q16, a R$ 95 million increase compared to 2Q15, due to (i) higher CDI, (ii) the higher net debt, due to the growth of the company, (iii) the effects of the exchange rate fluctuations in the period and (iv) PIS/COFINS taxes levied on financial revenues as from July 2015. Compared to 1Q16, net financial expense increased by R$ 6 million, mainly due to the higher average net debt in 2Q16. In 1H16, Ultrapar reported net financial expense of R$ 439 million, a 42% increase compared to 1H15.

Income and social contribution taxes / Tax incentives: Ultrapar reported income tax and social contribution expenses, net of benefit of tax holidays of R$ 143 million in 2Q16, a 2% decrease compared to 2Q15, due to the increased tax incentives that Ultrapar has in its Northeastern operations. Compared to 1Q16, income tax and social contribution expenses, net of benefit of tax holidays decreased by 22%. In 1H16, Ultrapar reported income tax and social contribution expenses, net of benefit of tax holidays of R$ 326 million, 1% above that in 1H15.

Net income: Net income in 2Q16 amounted to R$ 367 million, an 11% increase compared to 2Q15, due to the EBITDA growth, partially offset by higher net financial expenses and depreciation and amortization, due to higher CDI and net debt and expansion investments. Compared to 1Q16, net income decreased by 5%, in line with the EBITDA decrease. In 1H16, Ultrapar reported net income of R$ 755 million, 5% higher over 1H15.

EBITDA: Ultrapar’s consolidated EBITDA amounted to R$ 1,008 million in 2Q16, a 19% growth over 2Q15. Compared to 1Q16, Ultrapar’s EBITDA decreased by 5%, mainly due to decrease in Oxiteno’s EBITDA. In 1H16, Ultrapar’s EBITDA totaled R$ 2,065 million, up 13% compared to 1H15.


R$ million	2Q16		2Q15			1Q16		Variation 2Q16 X 1H15		Variation 2Q16 X 1Q16		1H16		1H15			Variation 1H16 X 1H15
Ultrapar		1.007,8		845,8			1.057,6		19%		-5%		2.065,4		1.832,3			13%
Ipiranga		717,9		575,7			712,3		25%		1%		1.430,2		1.290,2			11%
Oxiteno		116,8		203,0			198,3		-42%		-41%		315,2		347,6			-9%
Ultragaz		108,4		72,8			108,5		49%		0%		216,9		145,1			49%
Ultracargo		41,8		(48,8	)		32,6		N/A		28%		74,4		(1,1	)		N/A
Extrafarma		12,3		8,9			5,2		37%		N/A		17,5		14,1			24%

(1)

The EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) presented in this document represents the net income before (i) income and social contribution taxes, (ii) net financial expense (income) and (iii) depreciation and amortization, in accordance with ICVM 527/12. The purpose of including EBITDA information is to provide a measure used by the management for internal assessment of our operating results, and because a portion of our employee profit sharing plan is linked directly or indirectly to EBITDA performance. It is also a financial indicator widely used by investors and analysts to measure our ability to generate cash from operations and our operating performance. We also calculate EBITDA in connection with covenants related to some of our financing, as described in Note 14 to our consolidated financial statements. We believe EBITDA allows a better understanding not only of our financial performance but also of our capacity of meeting the payment of interest and principal from our debt and of obtaining resources for our investments and working capital. Our definition of EBITDA may differ from, and, therefore, may not be comparable with similarly titled measures used by other companies, thereby limiting its usefulness as a comparative measure. Because EBITDA excludes net financial expense (income), income and social contribution taxes and depreciation and amortization, it provides an indicator of general economic performance that is not affected by debt restructurings, fluctuations in interest rates or changes in income and social contribution taxes, depreciation and amortization. EBITDA is not a measure of financial performance under accounting practices adopted in Brazil or IFRS, and it should not be considered in isolation, or as a substitute for net income, as a measure of operating performance, as a substitute for cash flows from operations or as a measure of liquidity. EBITDA has material limitations that impair its value as a measure of a company’s overall profitability since it does not address certain ongoing costs of our business that could significantly affect profitability such as financial expense (income), income and social contribution taxes and depreciation and amortization.

The reconciliation of the EBITDA to the net income of the period is presented below:


R$ million	2Q16		2Q15		1Q16		1H16		1H15
Net income		367,1		331,1		387,9		755,0		717,7
(+) Income tax and social contribution		143,0		145,8		183,1		326,1		328,7
(+) Net financial expenses		222,5		127,2		216,5		438,9		308,4
(+) Depreciation and amortization		275,2		241,7		270,1		545,4		477,6
EBITDA		1.007,8		845,8		1.057,6		2.065,4		1.832,3

The performance analysis for each segment is presented below:

Ipiranga

Operational performance: Ipiranga’s sales volume totaled 5,948 thousand cubic meters in 2Q16, 8% below 2Q15 volume. Fuel sales volume for light vehicles (Otto cycle) decreased by 11% compared to 2Q15, despite the estimated growth of 2% in the vehicle fleet, reflecting the deterioration of unemployment rates and the increase in the cost of fuels’ share of income. Diesel volume decreased by 5% year-over-year, due to the economy weak performance. Despite 2Q16 being seasonally stronger, it remained stable compared to 1Q16 due to the effects of the worsening economic situation. In 1H16, Ipiranga accumulated sales volume of 11,882 thousand cubic meters, down 5% from 1H15.

Net revenue from sales and services: Ipiranga’s net sales and services reached R$ 16,588 million in 2Q16, up 4% over 2Q15, despite the lower volume, mainly as a result of (i) the rise in diesel and gasoline costs in September 2015 by Petrobras and, consequently, higher ethanol costs, (ii) lower ethanol sales volume in sales mix in 2Q16 and (iii) the strategy of constant innovation in services and convenience in the service station, generating greater customer satisfaction and loyalty. Compared to 1Q16, net sales and services decreased by 2%, mainly due to the reduction in unitary cost of ethanol in 2Q16. In 1H16, Ipiranga’s net sales and services amounted to R$ 33,458 million, up 8% over 1H15.

Cost of products sold: Ipiranga’s cost of goods sold totaled R$ 15,504 million in 2Q16, up 3% compared to 2Q15, mainly due to the rise in diesel and gasoline costs in September 2015 and, consequently, higher ethanol costs, partially offset by lower sales volume. The cost of goods sold decreased by 2% compared to 1Q16, mainly due to the reduction in unitary cost of ethanol. In 1H16, Ipiranga’s cost of goods sold totaled R$ 31,317 million, up 7% over 1H15.

Selling, marketing, general and administrative expenses: Ipiranga’s sales, general and administrative expenses amounted to R$ 558 million in 2Q16, a 11% increase over 2Q15, resulting from (i) the effects of inflation on expenses, (ii) innovation and expansion projects and studies and (iii) the expansion of Ipiranga’s resellers network, partially offset by lower freight expenses, due to lower sales volume. Compared to 1Q16, sales, general and administrative expenses increased by 4%, mainly due to increased expenses with studies and projects in 2Q16, partially offset by lower marketing expenses, a typical reduction between first and second quarters due to the resellers annual convention in February. In 1H16, Ipiranga’s sales, general and administrative expenses totaled R$ 1,098 million, up 10% over 1H15, consistent with the inflation.

EBITDA: Ipiranga’s EBITDA reached R$ 718 million in 2Q16, a 25% growth compared to 2Q15, due to the strategy of constant innovation in services and convenience, generating greater customer satisfaction and loyalty and the movements in the domestic and foreign markets of fuels, despite lower sales volume. Compared to 1Q16, Ipiranga’s EBITDA increased by 1% due to the seasonality between periods. In 1H16, Ipiranga’s EBITDA totaled R$ 1,430 million, up 11% over 1H15.

Oxiteno

Operational performance: Oxiteno’s sales volume totaled 184 thousand tons, a 5% (9 thousand tons) decrease compared to 2Q15. Sales volume of specialty chemicals was 7% lower, mainly as a result of the strong slowdown of the Brazilian economy. Commodities sales, on the other hand, increased by 5%, partially offsetting lower sales volume in specialty chemicals. Compared with 1Q16, sales volume grew by 1% (2 thousand tons), due to increased sales of commodities. Oxiteno’s sales volume in 1H16 totaled 365 thousand tons, down 1% from 1H15.

Net revenue from sales and services: Oxiteno’s net sales and services totaled R$ 909 million in 2Q16, a 10% decrease compared to 2Q15, due to (i) lower sales volume, (ii) larger share of commodities in sales mix and (iii) lower average prices in US Dollars, as a result of a decrease in raw materials costs throughout 2015. These effects were partially offset by the 14% weaker Real against the US Dollar. Compared to 1Q16, net sales and services decreased by 9%, despite the slightly higher sales volume, mainly due to a 10% stronger Real against the US Dollar. In 1H16, accumulated net sales and services totaled R$ 1,913 million, up 3% over 1H15.

Cost of products sold: Oxiteno’s cost of goods sold in 2Q16 totaled R$ 683 million, remaining stable compared to 2Q15, despite the lower sales volume and unitary variable costs in US dollar, due to (i) maintenance costs resulting from scheduled stoppages at the Mauá and Camaçari plants and (ii) a 14% weaker Real against the US Dollar. Compared to 1Q16, cost of goods sold decreased by 2% due to a 10% stronger Real against the US Dollar, partially offset by higher sales volume and the increase in prices of the main raw materials. In 1H16, Ipiranga’s cost of goods sold totaled R$ 1,379 million, up 7% over 1H15.

Selling, marketing, general and administrative expenses: Oxiteno’s sales, general and administrative expenses amounted to R$ 149 million in 2Q16, down 8% from 2Q15, due to lower variable compensation and domestic freight expenses, as a result of lower sales volume. Compared to 1Q16, sales, general and administrative expenses increased by 1% mainly due to higher sales volume. In 1H16, sales, general and administrative expenses totaled R$ 297 million, down 2% from 1H15.

EBITDA: EBITDA totaled R$ 117 million in 2Q16, down 42% from 2Q15, mainly due to lower volume of specialties and exchange rates and costs of raw materials moving in opposite directions, which were favorable in 1H15 and unfavorable in 1H16, despite R$ 0.44/US$ weaker average exchange rate in 2Q16 compared to 2Q15. Compared to 1Q16, EBITDA decreased by 41% due to a 10% (or R$ 0.40/US$) stronger Real against the US Dollar, despite higher sales volume. In 1H16, Oxiteno’s EBITDA totaled R$ 315 million, down 9% from 1H15.

Ultragaz

Operational performance: Ultragaz reached sales volume of 447 thousand tons in 2Q16, a 4% increase over 2Q15, despite the slowdown of the economy. The bottled segment showed a 1% growth compared to 2Q15, due to commercial initiatives to add new resellers. In the bulk segment, sales volume grew by 10% compared to 2Q15, as a result of investments made to capture new industrial customers and small- and medium-sized companies, despite the effects of the slowdown of the economy. Compared with 1Q16, sales volume increased by 10%, mainly driven by seasonality between periods and higher consumption by new customers. In the six-month period, Ultragaz accumulated sales volume of 854 thousand tons, up 2% over 1H15.

Net revenue from sales and services: Ultragaz’s net sales and services was R$ 1,343 million in 2Q16, a 20% increase compared to 2Q15, due to (i) higher sales volume, (ii) the increase in the cost of LPG by Petrobras in September and December 2015, (iii) increased share of the bulk segment in sales mix and (iv) the differentiation strategy based on innovation. As compared to 1Q16, net sales and services increased by 9%, mainly due to the sales volume growth. In 1H16, Ultragaz’s net sales and services amounted to R$ 2,576 million, up 19% over 1H15.

Cost of products sold: Ultragaz’s cost of goods sold amounted to R$ 1,124 million in 2Q16, a 18% increase compared to 2Q15, as a result of (i) the increase in the cost of LPG, (ii) higher sales volume, (iii) higher unitary freight, due to the increased costs with more distant routes, and (iv) higher personnel expenses, due to the inflation. Compared with 1Q16, the cost of goods sold increased by 10%, mainly due to higher sales volume and unitary freight costs. In 1H16, Ultragaz’s cost of goods sold totaled R$ 2,149 million, up 17% over 1H15.

Selling, marketing, general and administrative expenses: Ultragaz’s sales, general and administrative expenses totaled R$ 149 million in 2Q16, up 14% over 2Q15, as a result of the effects of inflation on expenses and studies and projects, partially offset by lower marketing expenses, due to the Ultragaz brand relaunch campaign in 2Q15. Compared to 1Q16, sales, general and administrative expenses increased by 6% mainly due to higher expenses with studies and projects. In 1H16, Ultragaz’s sales, general and administrative expenses totaled R$ 290 million, up 18% over 1H15.

EBITDA: Ultragaz’s EBITDA reached R$ 108 million in 2Q16, up 49% over 2Q15, mainly due to higher sales volume, as a result of commercial initiatives to capture new customers and resellers, and the differentiation strategy based on innovation. Compared to 1Q16, EBITDA remained stable, due to higher sales volume offset by increased costs and expenses in 2Q16. In 1H16, Ultragaz’s EBITDA totaled R$ 217 million, 49% growth over that in 1H15.

Ultracargo

Operational performance: In 2Q16, Ultracargo’s total average storage increased by 9% compared to 2Q15, due to the total suspension of Santos terminal in April 2015, which remained partially suspended in 2Q16, and to increased fuel handling. Excluding Santos operations, other Ultracargo’s terminals reported a 5% increase compared to 2Q15, due to increased fuel handling, despite the lower handling of chemicals. Compared to 1Q16, the average storage of Ultracargo’s terminals increased by 1% due to increased fuel handling. In the first semester of 2016, Ultracargo’s average storage decreased by 3% compared with 1H15.

Net revenue from sales and services: Ultracargo’s net sales and services totaled R$ 85 million in 2Q16, a 16% increase compared to 2Q15, due to the growth in average storage and tariff adjustments. Compared to 1Q16, net sales and services increased by 5%, mainly due to the higher handling of fuels. Excluding Santos operations, other Ultracargo’s terminals increased net sales and services by 11% and 7% compared to 2Q15 and 1Q16, respectively. In 1H16, Ultracargo’s net sales and services totaled R$ 166 million, remaining stable compared to 1H15.

Cost of services provided: Ultracargo’s cost of services provided in 2Q16 amounted to R$ 50 million, a 40% increase compared to 2Q15, due to the effects of inflation on personnel expenses, higher maintenance costs in terminals and to labor and clients indemnification expenses. In addition, as from January 2016, some expenses were considered as costs, representing R$ 3 million in 2Q16. Compared to 1Q16, cost of services provided increased by 4%, due to higher expenses with labor and clients indemnification. In 1H16, Ultracargo’s cost of services provided totaled R$ 97 million, up 38% over 1H15.

Selling, marketing, general and administrative expenses: Ultracargo’s sales, general and administrative expenses totaled R$ 23 million in 2Q16, a 3% decrease compared to 2Q15, mainly due to expenses that were considered as costs since January 2016, as mentioned in costs explanation, despite higher maintenance expenses. Compared to 1Q16, sales, general and administrative expenses increased by 15%, mainly due to higher personnel expenses and maintenance. In 1H16, sales, general and administrative expenses totaled R$ 42 million, down 7% from 1H15.

Other operating results: In 2Q16, “Other operating results” reported net revenue of R$ 18 million compared to net expense of R$ 74 million in 2Q15 and net revenue of R$ 8 million in 1Q16. In 2Q16, the amount includes basically a R$ 30 million gain resulting from insurance advances due to the accident, partially offset by R$ 12 million fire-related expenses.

EBITDA: Ultracargo’s total EBITDA reached R$ 42 million in 2Q16, a R$ 91 million increase compared to 2Q15, which was negative by R$ 49 million, due to lower fire-related expenses, since a significant part of these expenses occurred in 2Q15, and insurance advances amounting to R$ 30 million in 2Q16. In the same comparison basis, ex-Santos EBITDA remained stable. Compared to 1Q16, there was an increase of 28% due to lower fire-related expenses. Excluding Santos operations, other Ultracargo’s terminals EBITDA remained stable. In 1H16, Ultracargo’s EBITDA was R$ 74 million, a R$ 76 million increase compared to 1H15.

Extrafarma

Operational performance: Extrafarma ended 2Q16 with 280 drugstores, an increase of 46 drugstores (20%) compared to 2Q15. During 2Q16, 20 new drugstores were opened, and one was closed. By the end of 2Q16, 40% of the drugstores were under 3 years of operation, compared to 32% in 2Q15.

Gross revenues: Extrafarma’s gross revenues totaled R$ 409 million in 2Q16, a 14% increase compared to 2Q15, due to 24% higher retail sales, excluding mobile phone sales, as a result of the increased average number of stores and the 18% growth in same store sales ex-mobile phones, to which contributed the initiatives to raise the management standards in the retail pharmacy network and the annual adjustment in the prices of medicines, set by the Chamber for the Regulation of the Medical Pharmaceuticals Market (CMED). Retail revenues growth excluding mobile phones was partially offset by the worsening economic scenario, resulting in a 38% decrease in mobile phone sales. Compared to 1Q16, Extrafarma’s gross revenues increased by 10%, mainly derived from the seasonality between periods and to the annual adjustment in the prices of medicines, set by the CMED on April 1, 2016. In 1H16, Extrafarma’s gross revenues totaled R$ 781 million, up 12% over 1H15.

Cost of products sold and gross profit: Extrafarma’s cost of goods sold totaled R$ 258 million in 2Q16, up 11% over 2Q15, mainly as a result of increased sales and the annual adjustment in the prices of medicines. Extrafarma’s gross profit reached R$ 129 million, up 23% over 2Q15, due to the growth in retail revenues, ex-mobile phones sales, as well as procurement strategies to anticipate above mentioned medicine prices adjustments. Compared to 1Q16, the cost of goods sold increased by 8% in 2Q16 and gross profit increased by 15%, due to the same factors mentioned above. In 1H16, Extrafarma’s cost of goods sold totaled R$ 496 million, up 9% over 1H15, while gross profit increased by 19%, amounting R$ 241 million.

Selling, marketing, general and administrative expenses: Extrafarma’s sales, general and administrative expenses totaled R$ 127 million in 2Q16, a 23% increase compared to 2Q15, or 20% excluding depreciation and amortization expenses. This growth results from a 20% increase in the average number of drugstores and the effects of inflation on personnel and rent expenses, partially offset by the initiatives to raise the management standards in the retail pharmacy network. Compared to 1Q16, Extrafarma’s sales, general and administrative expenses increased by 9%, due to the higher number of stores and seasonally higher revenues. In 1H16, Extrafarma’s sales, general and administrative expenses totaled R$ 243 million, up 22% over 1H15.

EBITDA: Extrafarma’s EBITDA totaled R$ 12 million in 2Q16, a 37% growth compared to 2Q15, mainly due to 24% higher retail sales, excluding mobile phone sales, and to initiatives to raise the management standards in the retail pharmacy network, partially offset by the higher share of maturing stores and the deterioration in the economy, which lead to a 38% drop in mobile phone sales. Compared to 1Q16, Extrafarma’s EBITDA increased by R$ 7 million, due to the higher gross revenue, as a result of seasonality and the annual adjustment in the prices of medicines, set by the CMED. In 1H16, Extrafarma’s EBITDA totaled R$ 17 million, a 24% growth over 1H15.

We hereby inform that in accordance with the requirements of CVM Resolution 381/03, our independent auditors Deloitte Touche Tohmatsu Auditores Independentes have not performed during these six months of 2016 any service other than the external audit of the financial statements for the year ended on December 31, 20154 and the review of interim financial information of Ultrapar and subsidiaries for the quarter ended on June 30, 2016.

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São Paulo, August 10, 2016 – Ultrapar Participações S.A. (BM&FBOVESPA: UGPA3 / NYSE: UGP), a multi-business company engaged in specialized distribution and retail (Ipiranga / Ultragaz / Extrafarma), specialty chemicals (Oxiteno) and storage for liquid bulk (Ultracargo), hereby reports its results for the second quarter of 2016.

Results conference call

Brazilian conference call

August 12, 2016

10:00 a.m. (US EST)

São Paulo – SP

Telephone for connection: +55 11 2188 0155

Code: Ultrapar

International conference call

August 12, 2016

11:30 a.m. (US EST)

Participants in Brazil: 0800 891 0015

Participants in the USA: +1 844 836 8738

International participants: +1 412 317 5430

Code: Ultrapar

IR Contact

E-mail: invest@ultra.com.br

Telephone: + 55 11 3177 7014

Website: www.ultra.com.br

Ultrapar Participações S.A.

UGPA3 = R$ 71.11/share (06/30/16)

UGP = US$ 22.01/ADR (06/30/16)

Main highlights in 2Q16

ü ULTRAPAR’S NET REVENUES TOTAL R$ 19 BILLION IN 2Q16, A 4% GROWTH OVER 2Q15.

ü ULTRAPAR’S EBITDA REACHES R$ 1 BILLION IN 2Q16, A 19% GROWTH OVER 2Q15.

ü ULTRAPAR’S NET EARNINGS REACH R$ 367 MILLION IN 2Q16, AN 11% GROWTH OVER 2Q15.

ü DIVIDEND DISTRIBUTION OF R$ 435 MILLION FOR 1H16 APPROVED, WITH A 58% PAYOUT RATIO.

ü ULTRAPAR ANNOUNCES ACQUISITION OF THE FUEL DISTRIBUTOR ALE, WITH INVESTMENTS OF R$ 2,168 MILLION, CONTINUING ITS EXPANSION STRATEGY.

ü ULTRAPAR ENTERS INTO A JOINT VENTURE AGREEMENT WITH CHEVRON TO CREATE A NEW COMPANY IN THE LUBRICANTS BUSINESS.

“2Q16 marks an important achievement for Ultra. We reached our 40^th consecutive quarter of year-over-year growth in EBITDA. This 10-year period of growth is a proof of the resilience of our businesses and our teams’ promptness to overcome challenges and take advantage of opportunities, both during years of economic expansion and deceleration in Brazil. Our confidence in our business model was reaffirmed in two strategic moves we recently announced. In June we entered into an agreement to acquire Ale’s network, and last week we announced the partnership with Chevron in the lubricants market. Ultra has always invested in its businesses, in its people, in the relationship with its stakeholders and in the country. We have built a differentiated position in our markets to reap the benefits of the economic recovery, and we will continue to pursue ways to grow in a responsible and sustainable manner.”

Thilo Mannhardt – CEO

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Considerations on the financial and operational information

EBITDA — Earnings Before Interest, Taxes, Depreciation and Amortization, and EBIT— Earnings Before Interest and Taxes, are presented in accordance with CVM Instruction No. 527, issued by CVM on October 4, 2012. The calculation of EBITDA starting from net earnings is presented below:


R$ million	2Q16		2Q15		1Q16		D (%) *2Q16v2Q15*			D (%) *2Q16v1Q16*			1H16		1H15		D (%) *1H16v1H15*
Net earnings		367.1		331.1		387.9		11	%		(5	%)		755.0		717.7		5	%
(+) Income and social contribution taxes		143.0		145.8		183.1								326.1		328.7
(+) Financial expenses (income), net		222.5		127.2		216.5								438.9		308.4
(+) Depreciation and amortization		275.2		241.7		270.1								545.4		477.6
EBITDA		1,007.8		845.8		1,057.6		19	%		(5	%)		2,065.4		1,832.3		13	%

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Summary of 2^nd quarter 2016


Ultrapar – Consolidated data	2Q16		2Q15		1Q16		D (%) *2Q16v2Q15*			D (%) *2Q16v1Q16*			1H16		1H15		D (%) *1H16v1H15*
Net sales and services		19,298		18,511		19,524		4	%		(1	%)		38,823		35,914		8	%
Gross profit		1,693		1,543		1,718		10	%		(1	%)		3,412		3,125		9	%
Operating profit		726		601		791		21	%		(8	%)		1,517		1,354		12	%
EBITDA		1,008		846		1,058		19	%		(5	%)		2,065		1,832		13	%
Net earnings¹		367		331		388		11	%		(5	%)		755		718		5	%
Earnings attributable to Ultrapar per share²		0.67		0.60		0.71		12	%		(5	%)		1.38		1.31		6	%
Amounts in R$ million (except for EPS)

¹	Under IFRS, consolidated net earnings include net earnings attributable to non-controlling shareholders of the controlled companies.

²	Calculated based on the weighted average number of shares over the period, net of shares held in treasury.


Ipiranga – Operational data	2Q16		2Q15		1Q16		D (%) *2Q16v2Q15*			D (%) *2Q16v1Q16*			1H16		1H15		D (%) *1H16v1H15*
Total volume (000 m³)		5,948		6,433		5,934		(8	%)		0	%		11,882		12,563		(5	%)
Diesel		3,144		3,300		3,004		(5	%)		5	%		6,147		6,343		(3	%)
Gasoline, ethanol and NGV		2,710		3,035		2,846		(11	%)		(5	%)		5,555		6,028		(8	%)
Other³		95		98		85		(3	%)		12	%		180		191		(6	%)

³	Fuel oils, arla 32, kerosene, lubricants and greases.


Oxiteno – Operational data	2Q16		2Q15		1Q16		D (%) *2Q16v2Q15*			D (%) *2Q16v1Q16*			1H16		1H15		D (%) *1H16v1H15*
Total volume (000 tons)		184		193		182		(5	%)		1	%		365		368		(1	%)
Product mix
Specialty chemicals		147		157		147		(7	%)		(0	%)		293		312		(6	%)
Glycols		37		35		35		5	%		6	%		72		55		30	%
Geographical mix
Sales in Brazil		133		138		128		(3	%)		4	%		261		265		(2	%)
Sales outside Brazil		51		55		54		(7	%)		(6	%)		105		102		2	%


Ultragaz – Operational data	2Q16		2Q15		1Q16		D (%) *2Q16v2Q15*			D (%) *2Q16v1Q16*			1H16		1H15		D (%) *1H16v1H15*
Total volume (000 tons)		447		430		407		4	%		10	%		854		833		2	%
Bottled		301		297		277		1	%		9	%		578		570		1	%
Bulk		146		133		130		10	%		12	%		275		263		5	%

Ultracargo – Operational data

2Q16

2Q15

1Q16

D (%)

2Q16v2Q15

D (%)

2Q16v1Q16

1H16

1H15

D (%)

1H16v1H15

Effective storage⁴ (000 m³)

662

609

658

660

684

⁴	Monthly average.


Extrafarma – Operational data	2Q16		2Q15		1Q16		D (%) *2Q16v2Q15*			D (%) *2Q16v1Q16*			1H16		1H15		D (%) *1H16v1H15*
Gross revenues (R$ million)		409		359		372		14	%		10	%		781		697		12	%
Number of drugstores (end of period)		280		234		261		20	%		7	%		280		234		20	%


Macroeconomic indicators	2Q16		2Q15		1Q16		D (%) *2Q16v2Q15*		D (%) *2Q16v1Q16*			1H16		1H15		D (%) *1H16v1H15*
Average exchange rate (R$/US$)		3.51		3.07		3.91		14%		(10%	)		3.71		2.97		25%
Brazilian interbank interest rate (CDI)		3.4%		3.0%		3.3%							6.8%		5.9%
Inflation in the period (IPCA)		1.7%		2.3%		2.6%							4.4%		6.2%

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Highlights

Ultrapar announces acquisition of ALE network – On June 12, 2016, Ultrapar announced the acquisition, through its subsidiary Ipiranga, of 100% of the fuel distributor ALE and the assets integrating its operations. The acquisition was approved by Ultrapar’s Extraordinary General Meeting on August 3 and is subject to approval by the Brazilian Antitrust Authority (“Conselho Administrativo de Defesa Econômica” – CADE). ALE markets fuels through a network of approximately 2 thousand service stations, supported by a logistics infrastructure with 10 logistics facilities. The acquisition will provide greater efficiency and competitiveness in the market, benefiting consumers and resellers, increasing the offer of convenience and differentiation in the service stations, and geographic complementarity with Ipiranga, particularly in the Northeastern region, where Ipiranga has smaller market share and is focusing its investments. For further information, see Material Notice at www.ultra.com.br.

ü	Ultrapar announces agreement with Chevron – On August 4, 2016, Ultrapar Participações S.A. entered into an agreement with Chevron to create a new company in the lubricants market in Brazil.

Dividend distribution of R$ 435 million approved – The Board of Directors of Ultrapar approved today a dividend payment of R$ 435 million, equivalent to R$ 0.80 per share, to be paid from August 26, 2016 onwards. This amount represents an annualized dividend yield of 2% over Ultrapar’s average share price during the first half of 2016 and a 58% payout ratio.

Ultrapar and its business received important awards – The 43^rd edition of “Maiores e Melhores” annual publication of Exame magazine recognized two of Ultrapar’s businesses as the best in their industries. Ipiranga was elected for the sixth time as the best company in the Wholesale segment and Oxiteno won the top place in the Chemical and Petrochemical sector. Ultragaz, which ranked fourth in 2014, achieved the third place in the Retail sector. In another award, Ultrapar ranked third in the “Prêmio Broadcast Empresas”, held by Agência Estado, which selected ten companies that delivered positive returns to their investors and reported higher profitability among publicly held companies in 2015.

Update about the fire in a terminal operated by Ultracargo in Santos – The second stage of the decommissioning plan is underway, which consists in removing the equipment and structures from the part of the terminal affected by the fire in April 2015 in Santos. With regard to the items that affected results in 2Q16, the company received insurance advances amounting to R$ 30 million. For information about the effects on balance sheet, see Note 33 of the quarterly financial statements (ITR) for June 30, 2016.

Extrafarma launches its new brand – The official launch of Extrafarma’s new brand, with the new logo, colors and the “Pra você viver melhor” (For a better living) brand campaign, took place in June. Extrafarma raised its management standards in the retail pharmacy network and its store model, with a new architecture and more attractive visual communication, providing greater satisfaction, convenience and a better shopping experience to its customers. The new brand, which refers to two people hugging each other, strengthens the attributes trust and proximity in the relationship with customers, completing the new proposed model. New drugstores are already being opened in this concept and the existing ones will be refurbished over time, adapting to the new model.

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Executive summary of the results

During 2Q16, the Brazilian macroeconomic environment continued its downward trend, with the worsening of unemployment rates, income and consumption levels and unstable political environment. The unemployment rate increased from 8.3% in 2Q15 to 11.3% in 2Q16, while household income decreased by 3.9% in real terms in the same period. Despite the additional worsening in the scenario, inflation rates are gradually decreasing and consumer confidence indexes improved slightly. Base interest rate in Brazil has been maintained at 14.25% since July 2015. The average exchange rate R$/US$ increased from R$ 3.07/US$ in 2Q15 to R$ 3.51/US$ in 2Q16, a 14% increase. However, the foreign exchange rates moved in opposite directions, showing Real depreciation in 1H15 and appreciation in 1H16. Compared to 1Q16, the average R$/US$ rate decreased by R$ 0.40/US$, from R$ 3.91/US$ to R$ 3.51/US$. The average oil price (Brent) in 2Q16 was US$ 46/barrel, a drop when compared to the average of US$ 62/barrel in the 2Q15 and an increase compared to the average price of US$ 34/barrel in 1Q16. The economic activity index, measured by the Central Bank of Brazil, fell by 5.3% compared to the previous year, reflecting the recession of the Brazilian economy. In the retail pharmacy sector in the Northern and Northeastern regions, according to data from members of Abrafarma, sales increased by 7%.

At Ipiranga, sales volume decreased by 8% compared to 2Q15. Fuel sales volume for light vehicles (Otto cycle) decreased by 11% compared to 2Q15, despite the estimated growth of 2% in the vehicle fleet, reflecting the deterioration of unemployment rates, and the increase in the cost of fuels’ share of income. Diesel volume decreased by 5% year-over-year, following the weak performance of the economy. Ipiranga’s EBITDA reached R$ 718 million in 2Q16, a 25% growth compared to 2Q15, due to the strategy of constant innovation in services and convenience and the movements in the domestic and foreign markets of fuels, despite lower sales volume.

Oxiteno’s sales volume totaled 184 thousand tons, a 5% (9 thousand tons) decrease compared to 2Q15. Sales volume of specialty chemicals was 7% lower as a result of the strong slowdown of the Brazilian economy and lower volumes in the international markets. Growth in commodities sales partially offset the reduction in sales volume in specialty chemicals. EBITDA totaled R$ 117 million in 2Q16, down 42% from 2Q15, mainly due to lower volume of specialties and the effects of exchange rates and costs of raw materials moving in opposite directions, which were favorable in 1H15 and unfavorable in 1H16, despite the R$ 0.44/US$ weaker Real in 2Q16 versus 2Q15.

Ultragaz reached sales volume of 447 thousand tons in 2Q16, a 4% increase over 2Q15, despite the slowdown of the economy. The bottled segment showed a 1% growth compared to 2Q15, due to commercial initiatives to add new resellers. In the bulk segment, sales volume grew by 10% compared to 2Q15, as a result of investments made to capture new customers. Ultragaz’s EBITDA reached R$ 108 million in 2Q16, up 49% over 2Q15, mainly due to higher sales volume, as a result of commercial initiatives to capture new customers and resellers, and the strategy of differentiation and innovation.

In 2Q16, Ultracargo’s total average storage increased by 9% compared to 2Q15, due to the total suspension of Santos terminal in April 2015, which remained partially suspended in 2Q16, and increased fuel handling. Excluding Santos operations, other Ultracargo’s terminals reported a 5% increase compared to 2Q15, due to increased fuel handling, despite the lower handling of chemicals. Ultracargo’s total EBITDA reached R$ 42 million in 2Q16, a R$ 91 million increase compared to 2Q15, which was negative by R$ 49 million, due to lower fire-related expenses, since a significant part of these expenses occurred in 2Q15, and insurance advances amounting to R$ 30 million in 2Q16. In the same comparison, ex-Santos EBITDA remained stable.

Extrafarma ended 2Q16 with 280 drugstores, an increase of 46 drugstores (20%) compared to 2Q15. During 2Q16, 20 new drugstores were opened. By the end of 2Q16, 40% of the drugstores were under three years of operation, compared to 32% in 2Q15. Extrafarma’s EBITDA totaled R$ 12 million in 2Q16, 37% growth compared to 2Q15, mainly due to the increase in ex-mobile phones gross revenues (24%) and to initiatives to raise management standards in the retail pharmacy network, partially offset by the economy slowdown effects , which led to 38% decrease in mobile phone sales, and higher share of new stores still maturing.

The performance of Ultrapar’s businesses resulted in a consolidated EBITDA of R$ 1,008 million in 2Q16, up 19% over 2Q15. Ultrapar’s net earnings was R$ 367 million in 2Q16, 11% growth over 2Q15, impacted by higher net financial expenses, resulting from higher interest rates and net debt, and higher depreciation and amortization, resulting from investments made in expansions.

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Ipiranga

Operational performance – Ipiranga’s sales volume totaled 5,948 thousand cubic meters in 2Q16, 8% below 2Q15 volume. Fuel sales volume for light vehicles (Otto cycle) decreased by 11% compared to 2Q15, despite the estimated growth of 2% in the vehicle fleet, reflecting the deterioration of unemployment rates and the increase in the cost of fuels’ share of income. Diesel volume decreased by 5% year-over-year, due to the economy weak performance. Despite 2Q16 being seasonally stronger, it remained stable compared to 1Q16 due to the effects of the worsening economic situation. In 1H16, Ipiranga accumulated sales volume of 11,882 thousand cubic meters, down 5% from 1H15.

Ipiranga – Sales volume (000 m³)

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Net sales and services – Ipiranga’s net sales and services reached R$ 16,588 million in 2Q16, up 4% over 2Q15, despite the lower volume, mainly as a result of (i) the rise in diesel and gasoline costs in September 2015 by Petrobras and, consequently, higher ethanol costs, (ii) lower ethanol sales volume in sales mix in 2Q16 and (iii) the strategy of constant innovation in services and convenience in the service station, generating greater customer satisfaction and loyalty. Compared to 1Q16, net sales and services decreased by 2%, mainly due to the reduction in unitary cost of ethanol in 2Q16. In 1H16, Ipiranga’s net sales and services amounted to R$ 33,458 million, up 8% over 1H15.

Cost of goods sold – Ipiranga’s cost of goods sold totaled R$ 15,504 million in 2Q16, up 3% compared to 2Q15, mainly due to the rise in diesel and gasoline costs in September 2015 and, consequently, higher ethanol costs, partially offset by lower sales volume. The cost of goods sold decreased by 2% compared to 1Q16, mainly due to the reduction in unitary cost of ethanol. In 1H16, Ipiranga’s cost of goods sold totaled R$ 31,317 million, up 7% over 1H15.

Sales, general and administrative expenses – Ipiranga’s sales, general and administrative expenses amounted to R$ 558 million in 2Q16, a 11% increase over 2Q15, resulting from (i) the effects of inflation on expenses, (ii) innovation and expansion projects and studies and (iii) the expansion of Ipiranga’s resellers network, partially offset by lower freight expenses, due to lower sales volume. Compared to 1Q16, sales, general and administrative expenses increased by 4%, mainly due to increased expenses with studies and projects in 2Q16, partially offset by lower marketing expenses, a typical reduction between first and second quarters due to the resellers annual convention in February. In 1H16, Ipiranga’s sales, general and administrative expenses totaled R$ 1,098 million, up 10% over 1H15, consistent with the inflation.

EBITDA – Ipiranga’s EBITDA reached R$ 718 million in 2Q16, a 25% growth compared to 2Q15, due to the strategy of constant innovation in services and convenience, generating greater customer satisfaction and loyalty and the movements in the domestic and foreign markets of fuels, despite lower sales volume. Compared to 1Q16, Ipiranga’s EBITDA increased by 1% due to the seasonality between periods. In 1H16, Ipiranga’s EBITDA totaled R$ 1,430 million, up 11% over 1H15.

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Oxiteno

Operational performance – Oxiteno’s sales volume totaled 184 thousand tons, a 5% (9 thousand tons) decrease compared to 2Q15. Sales volume of specialty chemicals was 7% lower, mainly as a result of the strong slowdown of the Brazilian economy. Commodities sales, on the other hand, increased by 5%, partially offsetting lower sales volume in specialty chemicals. Compared with 1Q16, sales volume grew by 1% (2 thousand tons), due to increased sales of commodities. Oxiteno’s sales volume in 1H16 totaled 365 thousand tons, down 1% from 1H15.

Oxiteno – Sales volume (000 tons)

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Net sales and services – Oxiteno’s net sales and services totaled R$ 909 million in 2Q16, a 10% decrease compared to 2Q15, due to (i) lower sales volume, (ii) larger share of commodities in sales mix and (iii) lower average prices in US Dollars, as a result of a decrease in raw materials costs throughout 2015. These effects were partially offset by the 14% weaker Real against the US Dollar. Compared to 1Q16, net sales and services decreased by 9%, despite the slightly higher sales volume, mainly due to a 10% stronger Real against the US Dollar. In 1H16, accumulated net sales and services totaled R$ 1,913 million, up 3% over 1H15.

Cost of goods sold – Oxiteno’s cost of goods sold in 2Q16 totaled R$ 683 million, remaining stable compared to 2Q15, despite the lower sales volume and unitary variable costs in US dollar, due to (i) maintenance costs resulting from scheduled stoppages at the Mauá and Camaçari plants and (ii) a 14% weaker Real against the US Dollar. Compared to 1Q16, cost of goods sold decreased by 2% due to a 10% stronger Real against the US Dollar, partially offset by higher sales volume and the increase in prices of the main raw materials. In 1H16, Ipiranga’s cost of goods sold totaled R$ 1,379 million, up 7% over 1H15.

Sales, general and administrative expenses – Oxiteno’s sales, general and administrative expenses amounted to R$ 149 million in 2Q16, down 8% from 2Q15, due to lower variable compensation and domestic freight expenses, as a result of lower sales volume. Compared to 1Q16, sales, general and administrative expenses increased by 1% mainly due to higher sales volume. In 1H16, sales, general and administrative expenses totaled R$ 297 million, down 2% from 1H15.

EBITDA – EBITDA totaled R$ 117 million in 2Q16, down 42% from 2Q15, mainly due to lower volume of specialties and exchange rates and costs of raw materials moving in opposite directions, which were favorable in 1H15 and unfavorable in 1H16, despite R$ 0.44/US$ weaker average exchange rate in 2Q16 compared to 2Q15. Compared to 1Q16, EBITDA decreased by 41% due to a 10% (or R$ 0.40/US$) stronger Real against the US Dollar, despite higher sales volume. In 1H16, Oxiteno’s EBITDA totaled R$ 315 million, down 9% from 1H15.

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Ultragaz

Operational performance – Ultragaz reached sales volume of 447 thousand tons in 2Q16, a 4% increase over 2Q15, despite the slowdown of the economy. The bottled segment showed a 1% growth compared to 2Q15, due to commercial initiatives to add new resellers. In the bulk segment, sales volume grew by 10% compared to 2Q15, as a result of investments made to capture new industrial customers and small- and medium-sized companies, despite the effects of the slowdown of the economy. Compared with 1Q16, sales volume increased by 10%, mainly driven by seasonality between periods and higher consumption by new customers. In the six-month period, Ultragaz accumulated sales volume of 854 thousand tons, up 2% over 1H15.

Ultragaz – Sales volume (000 tons)

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Net sales and services – Ultragaz’s net sales and services was R$ 1,343 million in 2Q16, a 20% increase compared to 2Q15, due to (i) higher sales volume, (ii) the increase in the cost of LPG by Petrobras in September and December 2015, (iii) increased share of the bulk segment in sales mix and (iv) the differentiation strategy based on innovation. As compared to 1Q16, net sales and services increased by 9%, mainly due to the sales volume growth. In 1H16, Ultragaz’s net sales and services amounted to R$ 2,576 million, up 19% over 1H15.

Cost of goods sold – Ultragaz’s cost of goods sold amounted to R$ 1,124 million in 2Q16, a 18% increase compared to 2Q15, as a result of (i) the increase in the cost of LPG, (ii) higher sales volume, (iii) higher unitary freight, due to the increased costs with more distant routes, and (iv) higher personnel expenses, due to the inflation. Compared with 1Q16, the cost of goods sold increased by 10%, mainly due to higher sales volume and unitary freight costs. In 1H16, Ultragaz’s cost of goods sold totaled R$ 2,149 million, up 17% over 1H15.

Sales, general and administrative expenses – Ultragaz’s sales, general and administrative expenses totaled R$ 149 million in 2Q16, up 14% over 2Q15, as a result of the effects of inflation on expenses and studies and projects, partially offset by lower marketing expenses, due to the Ultragaz brand relaunch campaign in 2Q15. Compared to 1Q16, sales, general and administrative expenses increased by 6% mainly due to higher expenses with studies and projects. In 1H16, Ultragaz’s sales, general and administrative expenses totaled R$ 290 million, up 18% over 1H15.

EBITDA – Ultragaz’s EBITDA reached R$ 108 million in 2Q16, up 49% over 2Q15, mainly due to higher sales volume, as a result of commercial initiatives to capture new customers and resellers, and the differentiation strategy based on innovation. Compared to 1Q16, EBITDA remained stable, due to higher sales volume offset by increased costs and expenses in 2Q16. In 1H16, Ultragaz’s EBITDA totaled R$ 217 million, 49% growth over that in 1H15.

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Ultracargo

Operational performance – In 2Q16, Ultracargo’s total average storage increased by 9% compared to 2Q15, due to the total suspension of Santos terminal in April 2015, which remained partially suspended in 2Q16, and to increased fuel handling. Excluding Santos operations, other Ultracargo’s terminals reported a 5% increase compared to 2Q15, due to increased fuel handling, despite the lower handling of chemicals. Compared to 1Q16, the average storage of Ultracargo’s terminals increased by 1% due to increased fuel handling. In the first semester of 2016, Ultracargo’s average storage decreased by 3% compared with 1H15.

Ultracargo – Average storage (000 m³)

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Net sales and services – Ultracargo’s net sales and services totaled R$ 85 million in 2Q16, a 16% increase compared to 2Q15, due to the growth in average storage and tariff adjustments. Compared to 1Q16, net sales and services increased by 5%, mainly due to the higher handling of fuels. Excluding Santos operations, other Ultracargo’s terminals increased net sales and services by 11% and 7% compared to 2Q15 and 1Q16, respectively. In 1H16, Ultracargo’s net sales and services totaled R$ 166 million, remaining stable compared to 1H15.

Cost of services provided – Ultracargo’s cost of services provided in 2Q16 amounted to R$ 50 million, a 40% increase compared to 2Q15, due to the effects of inflation on personnel expenses, higher maintenance costs in terminals and to labor and clients indemnification expenses. In addition, as from January 2016, some expenses were considered as costs, representing R$ 3 million in 2Q16. Compared to 1Q16, cost of services provided increased by 4%, due to higher expenses with labor and clients indemnification. In 1H16, Ultracargo’s cost of services provided totaled R$ 97 million, up 38% over 1H15.

Sales, general and administrative expenses – Ultracargo’s sales, general and administrative expenses totaled R$ 23 million in 2Q16, a 3% decrease compared to 2Q15, mainly due to expenses that were considered as costs since January 2016, as mentioned in costs explanation, despite higher maintenance expenses. Compared to 1Q16, sales, general and administrative expenses increased by 15%, mainly due to higher personnel expenses and maintenance. In 1H16, sales, general and administrative expenses totaled R$ 42 million, down 7% from 1H15.

Other operating results – In 2Q16, “Other operating results” reported net revenue of R$ 18 million compared to net expense of R$ 74 million in 2Q15 and net revenue of R$ 8 million in 1Q16. In 2Q16, the amount includes basically a R$ 30 million gain resulting from insurance advances due to the accident, partially offset by R$ 12 million fire-related expenses.

EBITDA – Ultracargo’s total EBITDA reached R$ 42 million in 2Q16, a R$ 91 million increase compared to 2Q15, which was negative by R$ 49 million, due to lower fire-related expenses, since a significant part of these expenses occurred in 2Q15, and insurance advances amounting to R$ 30 million in 2Q16. In the same comparison basis, ex-Santos EBITDA remained stable. Compared to 1Q16, there was an increase of 28% due to lower fire-related expenses. Excluding Santos operations, other Ultracargo’s terminals EBITDA remained stable. In 1H16, Ultracargo’s EBITDA was R$ 74 million, a R$ 76 million increase compared to 1H15.

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Extrafarma

Operational Performance – Extrafarma ended 2Q16 with 280 drugstores, an increase of 46 drugstores (20%) compared to 2Q15. During 2Q16, 20 new drugstores were opened, and one was closed. By the end of 2Q16, 40% of the drugstores were under 3 years of operation, compared to 32% in 2Q15.

Extrafarma – Number and maturation profile of drugstores

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Gross revenues – Extrafarma’s gross revenues totaled R$ 409 million in 2Q16, a 14% increase compared to 2Q15, due to 24% higher retail sales, excluding mobile phone sales, as a result of the increased average number of stores and the 18% growth in same store sales ex-mobile phones, to which contributed the initiatives to raise the management standards in the retail pharmacy network and the annual adjustment in the prices of medicines, set by the Chamber for the Regulation of the Medical Pharmaceuticals Market (CMED). Retail revenues growth excluding mobile phones was partially offset by the worsening economic scenario, resulting in a 38% decrease in mobile phone sales. Compared to 1Q16, Extrafarma’s gross revenues increased by 10%, mainly derived from the seasonality between periods and to the annual adjustment in the prices of medicines, set by the CMED on April 1, 2016. In 1H16, Extrafarma’s gross revenues totaled R$ 781 million, up 12% over 1H15.

Cost of goods sold and gross profit – Extrafarma’s cost of goods sold totaled R$ 258 million in 2Q16, up 11% over 2Q15, mainly as a result of increased sales and the annual adjustment in the prices of medicines. Extrafarma’s gross profit reached R$ 129 million, up 23% over 2Q15, due to the growth in retail revenues, ex-mobile phones sales, as well as procurement strategies to anticipate above mentioned medicine prices adjustments. Compared to 1Q16, the cost of goods sold increased by 8% in 2Q16 and gross profit increased by 15%, due to the same factors mentioned above. In 1H16, Extrafarma’s cost of goods sold totaled R$ 496 million, up 9% over 1H15, while gross profit increased by 19%, amounting R$ 241 million.

Sales, general and administrative expenses – Extrafarma’s sales, general and administrative expenses totaled R$ 127 million in 2Q16, a 23% increase compared to 2Q15, or 20% excluding depreciation and amortization expenses. This growth results from a 20% increase in the average number of drugstores and the effects of inflation on personnel and rent expenses, partially offset by the initiatives to raise the management standards in the retail pharmacy network. Compared to 1Q16, Extrafarma’s sales, general and administrative expenses increased by 9%, due to the higher number of stores and seasonally higher revenues. In 1H16, Extrafarma’s sales, general and administrative expenses totaled R$ 243 million, up 22% over 1H15.

EBITDA – Extrafarma’s EBITDA totaled R$ 12 million in 2Q16, a 37% growth compared to 2Q15, mainly due to 24% higher retail sales, excluding mobile phone sales, and to initiatives to raise the management standards in the retail pharmacy network, partially offset by the higher share of maturing stores and the deterioration in the economy, which lead to a 38% drop in mobile phone sales. Compared to 1Q16, Extrafarma’s EBITDA increased by R$ 7 million, due to the higher gross revenue, as a result of seasonality and the annual adjustment in the prices of medicines, set by the CMED. In 1H16, Extrafarma’s EBITDA totaled R$ 17 million, a 24% growth over 1H15.

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Ultrapar

Net sales and services – Ultrapar’s consolidated net sales and services in 2Q16 increased by 4% compared to 2Q15, reaching R$ 19,298 million, due to the revenues growth in Ipiranga, Ultragaz, Ultracargo and Extrafarma. Compared to 1Q16, Ultrapar’s net sales and services decreased by 1%, mainly due to Ipiranga and Oxiteno, which reported lower net revenue in this comparison. In 1H16, Ultrapar’s net sales and services increased by 8% compared with 1H15, totaling R$ 38,823 million.

EBITDA – Ultrapar’s consolidated EBITDA amounted to R$ 1,008 million in 2Q16, 19% growth over 2Q15. Compared to 1Q16, Ultrapar’s EBITDA decreased by 5%, mainly due to decrease in Oxiteno’s EBITDA. In 1H16, Ultrapar’s EBITDA totaled R$ 2,065 million, up 13% compared to 1H15.

EBITDA (R$ million)

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Depreciation and amortization – Total depreciation and amortization costs and expenses in 2Q16 amounted to R$ 275 million, a 14% increase over 2Q15, as a result of investments made during the last 12 months, especially in the expansion of Ipiranga’s service station network. Compared to 1Q16, total depreciation and amortization costs and expenses increased 2%. In 1H16, total depreciation and amortization costs and expenses amounted to R$ 545 million, a 14% growth over the 1H15.

Financial results – Ultrapar’s net debt as of June 30, 2016 was R$ 5.5 billion (1.3 times LTM EBITDA), compared to R$ 5.0 billion as of June 2015 (1.4 times LTM EBITDA). Ultrapar reported net financial expenses of R$ 222 million in 2Q16, a R$ 95 million increase compared to 2Q15 due to (i) higher interest rates, (ii) the higher net debt, due to the growth of the company, (iii) the effects of the exchange rate fluctuations in the period and (iv) PIS/COFINS taxes levied on financial revenues as from July 2015. Compared to 1Q16, net financial expense increased by R$ 6 million, mainly due to the higher average net debt during 2Q16. In 1H16, Ultrapar reported net financial expense of R$ 439 million, a 42% increase compared to 1H15.

Net earnings – Net earnings in 2Q16 amounted to R$ 367 million, an 11% increase compared to 2Q15, due to the EBITDA growth, despite higher net financial expenses and depreciation and amortization, due to higher interest income, net debt and expansion investments. Compared to 1Q16, net earnings decreased by 5%, in line with the EBITDA decrease. In 1H16, Ultrapar reported net earnings of R$ 755 million, 5% higher over 1H15.

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Investments

Investments – Total investments, net of disposals and repayments, amounted to R$ 366 million in 2Q16, allocated as follows:

•

At Ipiranga, R$ 201 million were invested mainly in the expansion and maintenance of the service stations network and franchises.

•

At Oxiteno, R$ 55 million were invested mainly in the maintenance of its production units and investments in the ethoxylation plant in the United States.

•

At Ultragaz, R$ 64 million were invested mainly in new clients in the bulk segment and acquisition of LPG bottles.

•

Ultracargo invested R$ 15 million mainly towards maintenance of terminals and in the modernization of safety systems of its terminals.

•

At Extrafarma, R$ 29 million were invested mainly in the opening of new drugstores and renovation of existing drugstores.


*R$ million*	2Q16	2016	Total investments, net of disposals and repayments (R$ million)
Additions to fixed and intangible assets
Ipiranga	173	311
Oxiteno	55	102
Ultragaz	64	144
Ultracargo	15	21
Extrafarma	29	47
Total – additions to fixed and intangible assets¹	338	623
Financing to clients² – Ipiranga	28	36
Acquisition (disposal) of equity interest	20	26
Total investments, net of disposals and repayments	386	684

¹	Includes the consolidation of corporate IT services

²	Financing to clients is included as working capital in the Cash Flow Statement

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Ultrapar in capital markets

Ultrapar’s average daily trading volume in 2Q16 was R$ 130 million, 3% lower than the daily average of R$ 134 million in 2Q15, considering the combined trading volumes on the BM&FBOVESPA and the ADRs market. Ultrapar’s share price ended the quarter quoted at R$ 71.11/share on the BM&FBOVESPA, with an appreciation of 2% in the quarter, while the Ibovespa index rose by 3% in the same period. In the ADRs market, Ultrapar’s shares appreciated by 5% in 2Q16, while the Dow Jones index appreciated 2% in the same period. Ultrapar ended 2Q16 with a market value of R$ 40 billion, up 8% over 2Q15.

Performance of UGPA3 vs. Ibovespa—2Q16

(Base 100)

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Average daily trading volume (R$ million)		Market value (R$ billion)

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Outlook

In a political and economic unstable scenario, once again Ultrapar brings positive quarterly results, resultant from its resilient multi-business model, based on differentiation initiatives and convenience to its customers. The acquisition of the ALE fuel distribution network and the strategic partnership with Chevron sign the investment strategy and continuous improvement in order to generate long-term benefits. At Ipiranga, consistent investments to expand its service stations network and its related logistics infrastructure, focused on North, Northeast and Midwest regions of Brazil will continue to leverage the benefits from the growth of the vehicle fleet in Brazil, although at a slower pace, and the reduction of gray market. Additionally, the company will continue implementing differentiation initiatives, based on the increasing offer of products, services and convenience, to further increase customer loyalty and expand the number of clients, who are offered higher value-added products and services, while the reseller is provided with an additional source of revenue and differentiated positioning, thus maximizing the profitability of the whole value chain. Oxiteno will continue investing on innovation, with the development of new products and in partnership with its clients, also continuing the international expansion with investments in the ethoxylation plant in the United States. Ultragaz will continue to reap the benefits from the investments in capturing new customers, the constant search for differentiation and on managing costs and expenses constantly, which will contribute to the earnings progression. Ultracargo, on its turn, will continue focused on the management of the impacts from the accident in Santos, without ceasing to assess new business opportunities from the growing demand for liquid bulk storage in Brazil. At Extrafarma, we will continue a more accelerated expansion of the company and focused on raising the management standards in the retail market. Our strategy and investments places us differently for the future recovery of the Brazilian economy.

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Forthcoming events

Conference call / Webcast: August 12, 2016

Ultrapar will be holding a conference call for analysts on August 12, 2016 to comment on the company’s performance in the second quarter of 2016 and outlook. The presentation will be available for download on the company’s website 30 minutes prior to the conference call.

Brazilian: 10:00 a.m. (US EST)

Telephone for connection: +55 11 2188 0155

Code: Ultrapar

International: 11:30 a.m. (US EST)

Participants in the US: 1 844 836-8738

Participants in Brazil: 0800 891 0015

Participants in other countries: +1 412 317-5430

Code: Ultrapar

WEBCAST live via Internet at www.ultra.com.br. Please connect 15 minutes in advance.

This document may contain forecasts of future events. Such predictions merely reflect the expectations of the Company’s management. Words such as: “believe”, “expect”, “plan”, “strategy”, “prospects”, “envisage”, “estimate”, “forecast”, “anticipate”, “may” and other words with similar meaning are intended as preliminary declarations regarding expectations and future forecasts. Such declarations are subject to risks and uncertainties, anticipated by the Company or otherwise, which could mean that the reported results turn out to be significantly different from those forecasts. Therefore, the reader should not base investment decisions solely on these estimates.

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Operational and market information


Financial focus	2Q16	2Q15	1Q16	1H16	1H15
EBITDA margin Ultrapar	5.2%	4.6%	5.4%	5.3%	5.1%
Net margin Ultrapar	1.9%	1.8%	2.0%	1.9%	2.0%
Focus on human resources	2Q16	2Q15	1Q16	1H16	1H15
Number of employees – Ultrapar	14,933	14,307	14,735	14,933	14,307
Number of employees – Ultragaz	3,621	3,628	3,616	3,621	3,628
Number of employees – Ipiranga	2,920	2,789	2,890	2,920	2,789
Number of employees – Oxiteno	1,864	1,799	1,840	1,864	1,799
Number of employees – Ultracargo	614	605	614	614	605
Number of employees – Extrafarma	5,451	5,032	5,314	5,451	5,032
Focus on capital markets	2Q16	2Q15	1Q16	1H16	1H15
Number of shares (000)	556,405	556,405	556,405	556,405	556,405
Market capitalization¹ – R$ million	39,312	38,206	34,184	36,613	34,706
BM&FBOVESPA	2Q16	2Q15	1Q16	1H16	1H15
Average daily volume (shares)	1,305,471	1,503,695	1,563,085	1,431,137	1,594,057
Average daily volume (R$ 000)	92,258	103,328	96,282	94,221	99,483
Average share price (R$/share)	70.7	68.7	61.6	65.8	62.4
ADRs	2Q16	2Q15	1Q16	1H16	1H15
Quantity of ADRs² (000 ADRs)	30,204	30,604	30,234	30,204	30,604
Average daily volume (ADRs)	532,337	441,078	580,529	555,855	445,445
Average daily volume (US$ 000)	10,758	9,829	9,121	9,960	9,295
Average share price (US$/ADR)	20.2	22.3	15.7	17.9	20.9
Total	2Q16	2Q15	1Q16	1H16	1H15
Average daily volume (shares)	1,837,808	1,944,773	2,143,614	1,986,991	2,039,501
Average daily volume (R$ 000)	129,848	133,541	131,701	130,751	127,215

¹	Calculated based on the weighted average price in the period.

²	1 ADR = 1 common share.

All financial information is presented according to the accounting principles laid down in the Brazilian Corporate Law. All figures are expressed in Brazilian Reais, except for Oxiteno’s margins on page 21, which are expressed in US Dollars and were obtained using the average exchange rate (commercial US Dollar rate) for the corresponding periods.

For additional information, please contact:

Investor Relations—Ultrapar Participações S.A.

+55 11 3177 7014

invest@ultra.com.br

http://www.ultra.com.br

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ULTRAPAR

CONSOLIDATED BALANCE SHEET

In millions of Reais


	QUARTERS ENDED IN
	JUN			JUN			MAR
	2016			2015			2016
ASSETS
Cash, cash equivalents and financial investments		3,292.8			3,258.7			2,672.6
Trade accounts receivable		3,153.1			2,863.6			3,124.0
Inventories		2,432.0			2,367.9			2,710.8
Taxes		498.3			635.9			517.9
Other		353.5			192.2			361.8

Total Current Assets		9,729.6			9,318.2			9,387.0

Investments		118.0			99.7			98.7
Property, plant and equipment and intangibles		8,709.1			8,328.3			8,704.4
Financial investments		123.9			226.0			254.7
Trade accounts receivable		188.6			145.3			161.9
Deferred income tax		564.2			514.7			505.2
Escrow deposits		758.6			719.8			751.0
Other		320.9			189.7			305.4

Total Non-Current Assets		10,783.3			10,223.4			10,781.4

TOTAL ASSETS		20,512.9			19,541.7			20,168.4

LIABILITIES
Loans, financing and debentures		1,210.8			2,002.8			2,495.8
Suppliers		1,018.8			958.3			1,088.9
Payroll and related charges		302.5			297.9			277.9
Taxes		273.8			289.1			269.9
Other		237.4			191.7			284.7

Total Current Liabilities		3,043.3			3,739.8			4,417.2

Loans, financing and debentures		7,711.8			6,465.5			6,333.6
Judicial provisions		700.3			645.0			686.5
Post-retirement benefits		116.1			116.7			114.1
Other		534.4			469.1			511.3

Total Non-Current Liabilities		9,062.6			7,696.2			7,645.5

TOTAL LIABILITIES		12,105.9			11,436.0			12,062.7

STOCKHOLDERS’ EQUITY
Capital		3,838.7			3,838.7			3,838.7
Reserves		4,359.5			3,722.0			4,359.6
Treasury shares		(483.9	)		(270.4	)		(483.9	)
Others		664.3			789.0			359.7
Non-controlling interest		28.4			26.4			31.7

Total shareholders’ equity		8,407.0			8,105.7			8,105.7

TOTAL LIAB. AND STOCKHOLDERS’ EQUITY		20,512.9			19,541.7			20,168.4

Cash and financial investments		3,416.7			3,484.7			2,927.3
Debt		(8,922.6	)		(8,468.3	)		(8,829.4	)

Net cash (debt)		(5,505.9	)		(4,983.6	)		(5,902.1	)

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ULTRAPAR

CONSOLIDATED INCOME STATEMENT

In millions of Reais (except per share data)


	QUARTERS ENDED IN									ACCUMULATED
	JUN			JUN			MAR			JUN			JUN
	2016			2015			2016			2016			2015
Net sales and services		19,298.2			18,510.7			19,524.3			38,822.5			35,914.3
Cost of sales and services		(17,604.9	)		(16,968.0	)		(17,806.1	)		(35,411.0	)		(32,789.6	)

Gross profit		1,693.3			1,542.7			1,718.2			3,411.6			3,124.8
Operating expenses
Selling		(648.9	)		(613.6	)		(641.2	)		(1,290.1	)		(1,197.8	)
General and administrative		(356.3	)		(309.6	)		(321.8	)		(678.1	)		(597.6	)
Other operating income (expenses), net		40.2			(21.2	)		35.4			75.6			0.3
Income from sale of assets		(2.1	)		2.4			0.1			(2.0	)		24.6

Operating income		726.2			600.6			790.7			1,516.9			1,354.2
Financial results
Financial income		105.8			99.7			115.1			220.9			203.2
Financial expenses		(328.3	)		(226.9	)		(331.6	)		(659.8	)		(511.6	)
Equity in earnings (losses) of affiliates		6.3			3.4			(3.3	)		3.0			0.5

Income before income and social contribution taxes		510.1			476.9			571.0			1,081.1			1,046.4

Provision for income and social contribution taxes
Current		(228.0	)		(223.9	)		(227.4	)		(455.3	)		(384.8	)
Deferred		54.5			56.4			22.1			76.6			18.8
Benefit of tax holidays		30.5			21.7			22.1			52.6			37.3

Net Income		367.1			331.1			387.9			755.0			717.7

Net income attributable to:
Shareholders of Ultrapar		364.2			328.6			385.2			749.4			713.4
Non-controlling shareholders of the subsidiaries		3.0			2.5			2.6			5.6			4.3
EBITDA		1,007.8			845.8			1,057.6			2,065.4			1,832.3
Depreciation and amortization		275.2			241.7			270.1			545.4			477.6
Total investments, net of disposals and repayments		386.2			328.5			298.1			684.3			486.9
RATIOS
Earnings per share - R$		0.67			0.60			0.71			1.38			1.31
Net debt / Stockholders’ equity		0.65			0.61			0.73			0.65			0.61
Net debt / LTM EBITDA		1.32			1.41			1.47			1.32			1.41
Net interest expense / EBITDA		0.22			0.15			0.20			0.21			0.17
Gross margin		8.8%			8.3%			8.8%			8.8%			8.7%
Operating margin		3.8%			3.2%			4.0%			3.9%			3.8%
EBITDA margin		5.2%			4.6%			5.4%			5.3%			5.1%

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ULTRAPAR

CONSOLIDATED CASH FLOW STATEMENT

In millions of Reais


	JAN - JUN
	2016			2015
Cash Flow s from (used in) operating activities		668.2			775.1
Net income		755.0			717.7
Depreciation and amortization		545.4			477.6
Working capital		(329.2	)		(893.7	)
Financial expenses (A)		135.1			725.1
Deferred income and social contribution taxes		(76.6	)		(18.8	)
Income from sale of assets		2.0			(24.6	)
Cash paid for income and social contribution taxes		(322.3	)		(244.2	)
Other (B)		(41.1	)		36.1
Cash Flow s from (used in) investing activities		(648.4	)		(500.2	)
Additions to fixed and intangible assets, net of disposals		(622.6	)		(480.1	)
Acquisition and sale of equity investments		(25.8	)		(20.1	)
Cash Flow s from (used in) financing activities		(576.2	)		(1,190.3	)
Debt raising		948.4			1,445.2
Amortization of debt / Payment of financial lease		(413.6	)		(1,485.0	)
Interest paid		(669.9	)		(585.9	)
Shares acquired by the Company kept in treasury		—			(168.2	)
Dividends paid (C)		(441.1	)		(396.3	)
Net increase (decrease) in cash and cash equivalents		(556.5	)		(915.5	)
Cash and cash equivalents at the beginning of the period (D)		3,973.2			4,400.1

Cash and cash equivalents at the end of the pe riod (D)		3,416.7			3,484.7

(A)	Comprised of interest and exchange rate and inflationary variation expenses on loans and financing. Does not include revenues from interest and exchange rate and inflationary variation on cash equivalents.

(B)	Comprised mainly of noncurrent assets and liabilities variations net.

(C)	Includes dividends paid by Ultrapar and its subsidiaries to third parties.

(D)	Includes long term financial investments.

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IPIRANGA

CONSOLIDATED INVESTED CAPITAL

In millions of Reais


	QUARTERS ENDED IN
	JUN		JUN		MAR
	2016		2015		2016
OPERATING ASSETS
Trade accounts receivable		2,232.6		2,036.6		2,206.2
Trade accounts receivable - noncurrent portion		154.1		117.2		135.5
Inventories		1,377.1		1,498.3		1,684.7
Taxes		253.4		296.4		245.1
Other		364.7		288.9		371.0
Property, plant and equipment, intangibles and investments		3,959.7		3,705.1		3,963.0
TOTAL OPERATING ASSETS		8,341.6		7,942.4		8,605.5

OPERATING LIABILITIES
Suppliers		686.6		647.7		707.4
Payroll and related charges		89.3		79.3		76.3
Post-retirement benefits		98.5		103.0		96.8
Taxes		99.0		90.1		96.6
Judicial provisions		103.4		111.2		96.8
Other accounts payable		204.4		176.7		181.1
TOTAL OPERATING LIABILITIES		1,281.2		1,208.0		1,255.0

IPIRANGA

CONSOLIDATED INCOME STATEMENT

In millions of Reais


	QUARTERS ENDED IN									ACCUMULATED
	JUN			JUN			MAR			JUN			JUN
	2016			2015			2016			2016			2015
Net sales		16,588.2			15,975.4			16,869.3			33,457.6			31,093.7
Cost of sales and services		(15,504.3	)		(15,072.9	)		(15,812.4	)		(31,316.7	)		(29,169.7	)
Gross profit		1,084.0			902.5			1,056.9			2,140.9			1,924.0
Operating expenses
Selling		(378.0	)		(349.8	)		(382.0	)		(760.1	)		(702.5	)
General and administrative		(180.4	)		(152.0	)		(157.4	)		(337.8	)		(295.7	)
Other operating income (expenses), net		20.7			22.2			26.1			46.9			42.4
Income from sale of assets		(1.4	)		2.7			(0.8	)		(2.2	)		26.5
Operating income		544.8			425.6			542.8			1,087.6			994.8
Equity in earnings (losses) of affiliates		0.3			0.8			0.3			0.6			1.1
EBITDA		717.9			575.7			712.3			1,430.2			1,290.2
Depreciation and amortization		172.7			149.2			169.3			342.0			294.4
RATIOS
Gross margin (R$/m3)		182			140			178			180			153
Operating margin (R$/m3)		92			66			91			92			79
EBITDA margin (R$/m3)		121			89			120			120			103
EBITDA margin (%)		4.3%			3.6%			4.2%			4.3%			4.1%

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OXITENO

CONSOLIDATED INVESTED CAPITAL

In millions of Reais


	QUARTERS ENDED IN
	JUN		JUN		MAR
	2016		2015		2016
OPERATING ASSETS
Trade accounts receivable		497.5		479.1		535.3
Inventories		637.9		579.8		596.6
Taxes		83.5		106.1		83.9
Other		134.2		120.3		139.3
Property, plant and equipment, intangibles and investments		1,677.2		1,695.6		1,713.6
TOTAL OPERATING ASSETS		3,030.3		2,980.9		3,068.6

OPERATING LIABILITIES
Suppliers		140.5		156.0		164.5
Payroll and related charges		65.8		85.1		72.2
Taxes		39.5		39.0		41.1
Judicial provisions		107.5		98.0		106.0
Other accounts payable		33.9		25.3		33.4
TOTAL OPERATING LIABILITIES		387.1		403.3		417.2

OXITENO

CONSOLIDATED INCOME STATEMENT

In millions of Reais


	QUARTERS ENDED IN									ACCUMULATED
	JUN			JUN			MAR			JUN			JUN
	2016			2015			2016			2016			2015
Net sales		908.9			1,011.7			1,004.0			1,913.0			1,864.4
Cost of goods sold
Variable		(560.2	)		(564.3	)		(580.4	)		(1,140.6	)		(1,050.9	)
Fixed		(87.4	)		(86.7	)		(81.8	)		(169.3	)		(170.9	)
Depreciation and amortization		(35.3	)		(32.4	)		(34.0	)		(69.3	)		(63.8	)
Gross profit		226.0			328.3			307.7			533.8			578.8
Operating expenses
Selling		(67.6	)		(84.2	)		(69.6	)		(137.2	)		(155.8	)
General and administrative		(81.9	)		(78.4	)		(78.4	)		(160.2	)		(147.0	)
Other operating income (expenses), net		1.2			(1.2	)		0.3			1.4			(1.3	)
Income from sale of assets		0.2			0.1			0.2			0.3			0.3
Operating income		77.9			164.5			160.2			238.1			275.1
Equity in earnings (losses) of affiliates		0.2			2.6			0.4			0.6			1.6
EBITDA		116.8			203.0			198.3			315.2			347.6
Depreciation and amortization		38.8			35.9			37.7			76.5			70.8
RATIOS
Gross margin (R$/ton)		1,230			1,705			1,695			1,462			1,574
Gross margin (US$/ton)		351			555			434			394			530
Operating margin (R$/ton)		424			854			883			652			748
Operating margin (US$/ton)		121			278			226			176			252
EBITDA margin (R$/ton)		636			1,054			1,092			863			945
EBITDA margin (US$/ton)		181			343			279			233			319

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ULTRAGAZ

CONSOLIDATED INVESTED CAPITAL

In millions of Reais


	QUARTERS ENDED IN
	JUN		JUN		MAR
	2016		2015		2016
OPERATING ASSETS
Trade accounts receivable		258.5		204.2		234.0
Trade accounts receivable - noncurrent portion		34.1		27.8		26.1
Inventories		75.7		61.7		82.9
Taxes		61.4		49.1		55.8
Escrow deposits		201.9		193.0		202.3
Other		53.8		51.0		51.0
Property, plant and equipment, intangibles and investments		925.7		832.0		902.2
TOTAL OPERATING ASSETS		1,611.2		1,418.6		1,554.3

OPERATING LIABILITIES
Suppliers		52.3		37.6		49.0
Payroll and related charges		95.1		84.8		78.5
Taxes		8.4		6.8		7.0
Judicial provisions		102.2		93.7		101.4
Other accounts payable		34.4		30.1		33.0
TOTAL OPERATING LIABILITIES		292.4		252.9		269.0

ULTRAGAZ

CONSOLIDATED INCOME STATEMENT

In millions of Reais


	QUARTERS ENDED IN									ACCUMULATED
	JUN			JUN			MAR			JUN			JUN
	2016			2015			2016			2016			2015
Net sales		1,343.0			1,122.0			1,232.6			2,575.6			2,159.9
Cost of sales and services		(1,124.4	)		(953.4	)		(1,024.5	)		(2,148.9	)		(1,836.0	)
Gross profit		218.6			168.6			208.1			426.7			323.9
Operating expenses
Selling		(97.4	)		(91.7	)		(92.9	)		(190.3	)		(168.0	)
General and administrative		(51.6	)		(39.4	)		(47.6	)		(99.3	)		(78.2	)
Other operating income (expenses), net		0.3			0.9			1.0			1.3			0.8
Income from sale of assets		(0.7	)		(0.5	)		0.7			(0.0	)		(2.3	)
Operating income		69.1			38.0			69.3			138.4			76.2
Equity in earnings (losses) of affiliates		(0.0	)		(0.1	)		0.0			(0.0	)		(0.1	)
EBITDA		108.4			72.8			108.5			216.9			145.1
Depreciation and amortization		39.3			34.9			39.2			78.5			69.0
RATIOS
Gross margin (R$/ton)		489			392			511			500			389
Operating margin (R$/ton)		155			88			170			162			91
EBITDA margin (R$/ton)		243			169			267			254			174

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ULTRACARGO

CONSOLIDATED INVESTED CAPITAL

In millions of Reais


	QUARTERS ENDED IN
	JUN		JUN		MAR
	2016		2015		2016
OPERATING ASSETS
Trade accounts receivable		37.8		25.6		27.5
Inventories		6.8		2.6		6.6
Taxes		0.4		9.9		2.8
Other¹		159.5		32.2		163.5
Property, plant and equipment, intangibles and investments		899.0		905.6		895.2
TOTAL OPERATING ASSETS		1,103.5		976.0		1,095.6

OPERATING LIABILITIES
Suppliers		16.6		17.5		12.7
Payroll and related charges		15.4		14.5		17.9
Taxes		5.1		5.9		3.5
Judicial provisions		13.9		12.7		13.7
Other accounts payable²		83.5		41.1		157.3
TOTAL OPERATING LIABILITIES		134.5		91.7		205.2

¹	Trade receivables - indemnification insurance company

²	Includes the long term obligations with clients account and the extra amount related to the acquisition of Temmar, in the port of Itaqui and payables - indemnification clients

ULTRACARGO

CONSOLIDATED INCOME STATEMENT

In millions of Reais


	QUARTERS ENDED IN									ACCUMULATED
	JUN			JUN			MAR			JUN			JUN
	2016			2015			2016			2016			2015
Net sales		85.2			73.4			81.0			166.2			165.7
Cost of sales and services		(49.5	)		(35.4	)		(47.4	)		(97.0	)		(70.0	)
Gross profit		35.7			38.0			33.5			69.2			95.7
Operating expenses
Selling		(1.4	)		(1.4	)		(1.9	)		(3.3	)		(3.4	)
General and administrative		(21.1	)		(21.9	)		(17.7	)		(38.8	)		(41.8	)
Other operating income (expenses), net		18.1			(74.1	)		8.0			26.1			(72.6	)
Income from sale of assets		0.0			(0.0	)		0.0			0.0			(0.0	)
Operating income		31.2			(59.4	)		22.0			53.2			(22.2	)
Equity in earnings (losses) of affiliates		(0.2	)		0.2			(0.0	)		(0.3	)		0.3
EBITDA		41.8			(48.8	)		32.6			74.4			(1.1	)
Depreciation and amortization		10.8			10.4			10.7			21.5			20.8
RATIOS
Gross margin		42%			52%			41%			42%			58%
Operating margin		37%			-81%			27%			32%			-13%
EBITDA margin		49%			-67%			40%			45%			-1%

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EXTRAFARMA

CONSOLIDATED INVESTED CAPITAL

In millions of Reais


	QUARTERS ENDED IN
	JUN		JUN		MAR
	2016		2015		2016
OPERATING ASSETS
Trade accounts receivable		129.5		123.6		124.0
Inventories		334.5		225.4		340.0
Taxes		82.3		63.9		81.8
Other		16.1		12.1		15.2
Property, plant and equipment, intangibles and investments¹		955.3		125.9		936.9
TOTAL OPERATING ASSETS		1,517.6		550.9		1,497.9

OPERATING LIABILITIES
Suppliers		124.1		102.4		157.2
Payroll and related charges		36.7		34.1		32.8
Taxes		9.2		10.7		9.1
Judicial provisions		59.2		55.5		60.4
Other accounts payable		13.5		16.1		13.5
TOTAL OPERATING LIABILITIES		242.8		218.8		273.0

¹	Includes the Goodwill as a result of the association with Extrafarma amounted to R$ 661.6 million. See note 3.b to financial statements as from December 31, 2015

EXTRAFARMA

CONSOLIDATED INCOME STATEMENT

In millions of Reais


	QUARTERS ENDED IN									ACCUMULATED
	JUN			JUN			MAR			JUN			JUN
	2016			2015			2016			2016			2015
Gross revenues		409.0			358.9			372.1			781.1			696.6
Sales returns, discounts and taxes		(22.1	)		(20.4	)		(21.8	)		(43.9	)		(39.5	)
Net sales		386.9			338.6			350.2			737.1			657.1
Cost of sales and services		(257.9	)		(233.3	)		(238.4	)		(496.3	)		(454.8	)
Gross profit		129.0			105.3			111.9			240.8			202.3
Operating expenses		(126.7	)		(102.8	)		(116.5	)		(243.1	)		(199.9	)
Other operating income (expenses), net		(0.1	)		1.1			(0.0	)		(0.1	)		1.1
Income from sale of assets		(0.1	)		(0.0	)		0.0			(0.1	)		0.1
Operating income		2.0			3.5			(4.6	)		(2.6	)		3.6
EBITDA		12.3			8.9			5.2			17.5			14.1
Depreciation and amortization		10.2			5.4			9.8			20.1			10.5
RATIOS¹
Gross margin (%)		32%			29%			30%			31%			29%
Operating margin (%)		0%			1%			-1%			0%			1%
EBITDA margin (%)		3%			2%			1%			2%			2%

²	Calculated based on gross revenues

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ULTRAPAR

PARTICIPAÇÕES S/A LOANS

In millions of Reais - IFRS


LOANS	Balance in June/2016¹
Foreign Currency	Ipiranga		Oxiteno		Ultragaz		Ultracargo		Extrafarma		Ultrapar Parent Company / Other		Ultrapar Consolidated		Index/ Currency		Weighted average interest rate (% p.y.)²		Maturity
Foreign loan³		906.5		—		—		—		—		—		906.5		US$+LIBOR		+0.7		2017 to 2018
Foreign loan⁵		472.2		—		—		—		—		—		472.2		US$		+2.1		2017 to 2018
Foreign loan		—		230.7		96.5		—		—		—		327.2		US$+LIBOR		+1.4		2017 to 2018
Financial institutions		—		192.9		—		—		—		—		192.9		US$+LIBOR		+2.7		2016 to 2021
Advances on foreign exchange contracts		—		150.8		—		—		—		—		150.8		US$		+2.6		< 329 days
Financial institutions		—		114.7		—		—		—		—		114.7		US$		+2.7		2016 to 2017
Foreign currency advances delivered		—		47.9		—		—		—		—		47.9		US$		+1.7		< 117 days
Financial institutions		—		21.0		—		—		—		—		21.0		MX$+ TIIE		+1.0		2016 to 2017
BNDES		1.4		8.8		1.6		—		—		—		11.9		US$		+6.0		2016 to 2020
Subtotal		1,380.1		766.8		98.1		—		—		—		2,245.0
Local Currency
Banco do Brasil floating rate		2,874.5		—		—		—		—		—		2,874.5		CDI		107.5		2017 to 2022
Debentures IPP		1,914.3		—		—		—		—		—		1,914.3		CDI		107.1		2017 to 2021
Debentures – 5th issuance		—		—		—		—		—		833.2		833.2		CDI		108.3		2018
BNDES		145.9		51.3		123.7		46.5		—		—		367.3		TJLP		+2.8		2016 to 2021
Export Credit Note floating rate		—		158.6		—		—		—		—		158.6		CDI		101.5		2018
BNDES		31.4		6.3		24.5		—		—		—		62.1		SELIC		+2.3		2016 to 2021
Banco do Nordeste do Brasil		—		26.5		—		30.1		—		—		56.6		R$		+8.5		2016 to 2021
Research and projects financing (FINEP)		19.9		35.2		—		—		—		—		55.2		R$		+4.0		2016 to 2021
Financial leasing		—		—		49.7		—		—		—		49.7		IGPM		+5.6		2016 to 2031
BNDES		32.5		2.4		9.0		0.6		0.8		—		45.3		R$		+5.1		2016 to 2022
Research and projects financing (FINEP)		2.2		5.7		2.7		—		—		—		10.6		TJLP		-1.4		2016 to 2023
Export Credit Note⁴		—		10.1		—		—		—		—		10.1		R$		+8.0		2016
Working capital loan – fixed rate		—		—		—		—		0.3		—		0.3		R$		+10.0		2016
Financial leasing floating rate		—		—		—		—		0.2		—		0.2		CDI		+2.8		2016 to 2017
Agency for Financing Machinery and Equipment (FINAME)		—		—		—		—		0.2		—		0.2		TJLP		+5.7		2016 to 2022
Financial leasing fixed rate		—		—		—		—		0.1		—		0.1		R$		+15.6		2016 to 2017
Subtotal		5,020.8		296.1		209.5		77.2		1.5		833.2		6,438.4
Unrealized losses on swaps transactions		222.9		16.1		0.2		0.0		—		—		239.2
Total		6,623.8		1,079.1		307.8		77.2		1.5		833.2		8,922.6
Composition per maturity
Up to 1 year		449.0		640.8		55.9		30.5		1.1		33.5		1,210.8
From 1 to 2 years		1,655.8		219.3		41.5		19.8		0.2		799.7		2,736.4
From 2 to 3 years		3,134.2		61.6		136.5		8.8		0.2		—		3,341.2
From 3 to 4 years		538.0		77.9		26.1		8.8		0.0		—		650.8
From 4 to 5 years		510.1		74.0		10.7		7.4		0.0		—		602.2
Thereafter		336.7		5.5		37.0		2.0		0.0		—		381.2
Total		6,623.8		1,079.1		307.8		77.2		1.5		833.2		8,922.6

Libor = London Interbank Offered Rate / MX$ = Mexican Peso / TIIE = Mexican Interbank Interest Rate Even / CDI = interbank certificate of deposit rate / TJLP = basic financing cost of BNDES (set by National Monetary Council). On June 30, 2016, TJLP was fixed at 7.5% p.a. / IGPM = General Index of Market Prices / SELIC = base interest rate set by Brazilian Central Bank


	Balance in June/2016¹
	Ipiranga		Oxiteno		Ultragaz		Ultracargo		Extrafarma		Ultrapar Parent Company / Other		Ultrapar Consolidated
CASH AND LONG TERM INVESTMENTS		1,768.9		1,126.5		173.9		194.2		25.7		127.6		3,416.7

¹	As provided in IAS 39, transaction costs incurred in obtaining financial resources were deducted from the value of the financial instrument.

²	Certain loans are hedged against foreign currency and interest rate exposure (see note 30 to financial statements).

³	For this loan, a hedging instrument was hired with the objective of swapping the fixed to floating rate, equivalent to 102.66% of CDI on average.

⁴	For this loan, a hedging instrument was hired with the objective of swapping the fixed to floating rate, equivalent to 79.90% of CDI on average.

⁵	For this loan, a hedging instrument was hired with the objective of swapping the fixed to floating rate, equivalent to 100.63% of CDI on average.

ULTRAPAR PARTICIPAÇÕES S.A.

Publicly Traded Company


CNPJ n^r 33.256.439/0001- 39		NIRE 35.300.109.724

MINUTES OF THE MEETING OF THE BOARD OF DIRECTORS (07/2016)

Date, Time and Location:

August 10, 2016, at 2:30 p.m., at the Company’s headquarters, located at Av. Brigadeiro Luís Antônio, n^r 1,343, 9^th floor, in the City and State of São Paulo.

Attendance:

(i) Members of the Board of Directors; and (ii) member of the Fiscal Council, pursuant to the terms of paragraph 3 of article 163 of the Brazilian Corporate Law.

Decisions:

1.	After having analyzed and discussed the performance of the Company in the second quarter of the current fiscal year, the respective financial statements were approved.

“Ad referendum” of the Annual General Shareholders’ Meeting that will analyze the balance sheet and financial statements of the current fiscal year, to approve the distribution of dividends, to be payable from the net earnings account of the current year, in the total amount of R$ 434,618,992.00 (four hundred and thirty-four million, six hundred and eighteen thousand, nine hundred and ninety-two Reais). Holders of common shares are entitled to receive R$ 0.80 (eighty cents of Real) per share, excluding the shares held in treasury at this date.

(Minutes of the Meeting of the Board of Directors Ultrapar Participações S.A., held on August 10, 2016)

It has also been determined that dividends declared herein will be paid from August 26, 2016 onwards, without remuneration or monetary adjustment. The record date to establish the right to receive the approved dividends will be August 17, 2016 in Brazil and August 22, 2016, in the United States of America.

4.	The members of the Board of Directors were updated on strategic and expansion projects of the Company.

5.	The members of the Board of Directors were updated on financing alternatives for the Company.

6.	The members of the Board of Directors approved the hiring of Deloitte Touche Tohmatsu Brasil to provide audit services for the financial statements of the current fiscal year, according to the proposal presented by the Executive Officers and the Fiscal Council of the Company.

7.	The members of the Board of Directors approved, in accordance with Ultrapar’s Investment Approval Policy, the investment proposal to add new service stations to Ipiranga network, the Company’s business in the fuel distribution.

Observations: The deliberations were approved, with no amendments or qualifications, by all the Board Members present.

As there were no further matters to be discussed, the meeting was closed, the minutes of this meeting were written, read and approved by all the undersigned members present, as well as by the members of the Fiscal Council.

Paulo Guilherme Aguiar Cunha – Chairman

Lucio de Castro Andrade Filho – Vice Chairman

Alexandre Gonçalves Silva

Carlos Tadeu da Costa Fraga

Jorge Marques de Toledo Camargo

José Maurício Pereira Coelho

Nildemar Secches

Olavo Egydio Monteiro de Carvalho

Pedro Wongtschowski

Member of the Fiscal Council:

Mario Probst

LOGO

ULTRAPAR PARTICIPAÇÕES S.A.

Publicly-Traded Company

CNPJ n^r 33.256.439/0001- 39

NIRE 35.300.109.724

NOTICE TO SHAREHOLDERS

Distribution of dividends

We hereby inform that the Board of Directors of Ultrapar Participações S.A. (“Ultrapar”), at the meeting held on this date, approved the distribution of dividends, payable from the net earnings account for the fiscal year of 2016, in the amount of R$ 434,618,992.00 (four hundred and thirty-four million, six hundred and eighteen thousand, nine hundred and ninety-two Reais), to be paid from August 26, 2016 onwards, without remuneration or monetary adjustment.

Holders of common shares issued by Ultrapar as of the record dates informed below will receive the dividend of R$ 0.80 per share.

The record date to establish the right to receive the dividend will be August 17, 2016 in Brazil, and August 22, 2016 in the United States of America. Therefore, from August 18, 2016 onwards, the shares will be traded “ex-dividend” on both the São Paulo Stock Exchange (BM&FBOVESPA) and the New York Stock Exchange (NYSE).

São Paulo, August 10, 2016.

André Pires de Oliveira Dias

Chief Financial and Investor Relations Officer

ULTRAPAR PARTICIPAÇÕES S.A.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: August 10, 2016


ULTRAPAR HOLDINGS INC.

By:		/s/ Andre Pires de Oliveira Dias
		Name: Andre Pires de Oliveira Dias Title: Chief Financial and Investor Relations Officer

(Individual and Consolidated Interim Financial Information for the Three-Month Period Ended June 30, 2016 Report on Review of Interim Financial Information, 2Q16 Earnings release, Board of Directors Minutes and notice to shareholders)