##### Table of Contents

**As filed with the Securities and Exchange Commission on April 30, 2012**

 

 

 

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

**
 
**

**FORM 20-F**

 

**
 
**

(Mark one) 

**OR**

 

**For the fiscal year ended December 31, 2011**

**OR**

 

**OR**

 

**For the transition period from              to            **

**Commission file number: 001-14950**

 

**
 
**

**ULTRAPAR PARTICIPAÇÕES S.A.**

**(Exact name of Registrant as specified in its charter)**

 

**
 
**

**ULTRAPARHOLDINGS INC.**

**(Translation of Registrant’s name into English)**

 

**
 
**

**The Federative Republic of Brazil**

**(Jurisdiction of incorporation or organization)**

**Av. Brigadeiro LuisAntônio, 1343, 9o Andar**

**São Paulo, SP, Brazil 01317-910**

**Telephone: 55 11 3177 6695**

**(Address of principal executive offices)**

 

**
 
**

**Securities registered or tobe registered pursuant to Section 12(b) of the Act:**

 

**Securities registered or to be registered pursuant to Section 12(g) of the Act:**

**None**

**Securities for which there is areporting obligation pursuant to Section 15(d) of the Act:**

**None**

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report. 

The number of outstanding shares of each class as of December 31, 2011. 

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the SecuritiesAct.    x  Yes     ̈  No 

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of1934.   ̈  Yes    x  No 

Note—Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under thoseSections. 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) ofthe Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90days.    x  Yes     ̈  No 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post suchfiles).     ̈  Yes    x  No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” inRule 12b-2 of the Exchange Act. (Check one): 

Large AcceleratedFiler  x    Accelerated Filer   ̈    Non-accelerated Filer   ̈

Indicate by check mark which basis of accounting the registrant has used to prepare the financialstatements included in this filing: 

 

Indicate by check mark which financial statement item the registrant has elected to follow: Item 17   ̈    Item 18  x

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the ExchangeAct).     ̈  Yes    x  No 

 

 

 

Table of Contents
**TABLE OF CONTENTS**

 
      **Page** 
PART I
   5  
ITEM 1.
  
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS
   5  
ITEM 2.
  
OFFER STATISTICS AND EXPECTED TIME TABLE
   5  
ITEM 3.
  
KEY INFORMATION
   5  
ITEM 4.
  
INFORMATION ON THE COMPANY
   22  
ITEM 4A.
  
UNRESOLVED STAFF COMMENTS
   75  
ITEM 5.
  
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
   75  
ITEM 6.
  
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
   97  
ITEM 7.
  
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
   108  
ITEM 8.
  
FINANCIAL INFORMATION
   110  
ITEM 9.
  
THE OFFER AND LISTING
   117  
ITEM 10.
  
ADDITIONAL INFORMATION
   118  
ITEM 11.
  
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   131  
ITEM 12.
  
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
   138  
PART II
   140  
ITEM 13.
  
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
   140  
ITEM 14
  
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
   140  
ITEM 15.
  
CONTROLS AND PROCEDURES
   140  
ITEM 16.
  
[Reserved]
   142  
ITEM 16A.
  
AUDIT COMMITTEE FINANCIAL EXPERT
   142  
ITEM 16B.
  
CODE OF ETHICS
   142  
ITEM 16C.
  
PRINCIPAL ACCOUNTANT FEES AND SERVICES
   142  
ITEM 16D.
  
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
   143  
ITEM 16E.
  
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
   143  
ITEM 16F.
  
CHANGE IN REGISTRANT’S CERTIFYING ACCOUNT
   143  
ITEM 16G.
  
CORPORATE GOVERNANCE
   144  
PART III
   146  
ITEM 17.
  
FINANCIAL STATEMENTS
   146  
ITEM 18.
  
FINANCIAL STATEMENTS
   146  
ITEM 19.
  
EXHIBITS
   146  
FINANCIAL STATEMENTS
   F-1  
 
i 

Table of Contents
**INTRODUCTION**

Ultrapar is a Brazilian company with almost 75 years of history, with leading positions in the markets in which it operates: fuel distribution through Ultragaz and Ipiranga, specialty chemicals productionthrough Oxiteno and storage services for liquid bulk through Ultracargo. Ultragaz is the leader in LPG distribution in Brazil with a 23% market share in 2011 and one of the largest independent LPG distributors in the world in terms of volume sold.We deliver LPG to an estimated 11 million households using our own vehicle fleet and our network of approximately 4,400 independent retailers. Ipiranga is the second largest fuel distributor in Brazil, with a network of 6,086 service stationsand a 21% market share in 2011. Oxiteno is one of the largest producers of ethylene oxide and its main derivatives in Latin America, a major producer of specialty chemicals and the sole producer of fatty-alcohols and related by-products in LatinAmerica. Oxiteno has nine industrial units in Brazil, Mexico and Venezuela and commercial offices in the United States, Belgium, Colombia and Argentina. Ultracargo is the largest provider of storage for liquid bulk in Brazil, with seven terminalsand a storage capacity of 664 thousand cubic meters as of December 31, 2011. 

References in this annual report to“Ultrapar”, “we”, “our”, “us” and “the company” are to Ultrapar Participações S.A. and its consolidated subsidiaries (unless the context otherwise requires). In addition, all referencesin this annual report to: 

 
 • 
“ABTL” are to *Associação Brasileira de Terminais de Líquidos*, the Brazilian Association of Liquid Bulk TerminalOperators; 

 
 • 
“ABIQUIM” are to *Associação Brasileira da Indústria Química*, the Brazilian Association of ChemicalIndustries; 

 
 • 
“ADRs” are to the American Depositary Receipts evidencing our ADSs; 

 
 • 
“ADSs” are to our American Depositary Shares, each representing (i) one common share, with respect to any period on or afterAugust 17, 2011; or (ii) one non-voting preferred share, with respect to any period prior to August 17, 2011; 

 
 • 
“AGT” are to AGT Armazéns Gerais e Transporte Ltda.; 

 
 • 
“am/pm” are to Ipiranga’s convenience stores franchise network that operate under the brand am/pm, managed by am/pm ComestíveisLtda. and Conveniência Ipiranga Norte Ltda.; 

 
 • 
“ANFAVEA” are to *Associação Nacional dos Fabricantes de Veículos Automotores*, the Brazilian Association ofVehicle Producers; 

 
 • 
“ANP” are to the *Agência Nacional de Petróleo, Gás Natural e Biocombustíveis*, the Brazilian oil, naturalgas and biofuels regulatory agency; 

 
 • 
“Aqces” are to Aqces Logística Internacional Ltda.; 

 
 • 
“BM&FBOVESPA” are to the BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros, the São Paulo Stock Exchange;

 
 • 
“Braskem” are to Braskem S.A. and Quattor Participações S.A. (“Quattor”), acquired by Braskem in April, 2010;

 
 • 
“Brazilian Central Bank” or “Central Bank” are to the *Banco Central do Brasil*, the Brazilian central bank;

 
 • 
“Brazilian Corporate Law” are to Law No. 6,404 enacted in December 1976, as amended by Law No. 9,457 enacted in May 1997, by LawNo. 10,303 enacted in October 2001, by Law No. 11,638 enacted in December 2007, by Law No. 11,941/09 enacted in May 2009, and by Law No. 12,431 enacted in June 2011; 

 
 • 
“Brazilian government” are to the federal government of the Federative Republic of Brazil; 

 
 • 
“CBPI” are to Companhia Brasileira de Petróleo Ipiranga*,*a company that was merged into IPP in November 2009;

 
 • 
“CBL” are to Chevron Brasil Ltda. (currently IPP), a former subsidiary of Chevron that, together with Galena, held Texaco;

 
 • 
“CDI” are to the Brazilian money market interest rate *(Certificados de Depósito Interbancário)*;

 
 • 
“Chevron” are to Chevron Latin America Marketing LLC and Chevron Amazonas LLC; 

 
 • 
“Conversion” are to the conversion of all preferred shares issued by the company into common shares, at a ratio of 1 (one) preferred sharefor 1 (one) common share, as approved at the extraordinary general shareholders’ meeting and the special preferred shareholders’ meeting, both held on June 28, 2011; 

 
1 

Table of Contents • 
“CVM” are to *Comissão de Valores Mobiliários*, the Brazilian securities authority; 

 
 • 
“Deposit Agreement” are to the Deposit Agreement between Ultrapar Participações S.A. and the Bank of New York Mellon, datedSeptember 16, 1999, and all subsequent amendments thereto; 

 
 • 
“DNP” are to Distribuidora Nacional de Petróleo Ltda.; 

 
 • 
“DPPI” are to Distribuidora de Produtos de Petróleo Ipiranga S.A., a company that was merged into CBPI in December 2008;

 
 • 
“EMCA” are to Empresa Carioca de Produtos Químicos S.A.; 

 
 • 
“Galena” are to Sociedade Anônima de Óleo Galena Signal, a former subsidiary of Chevron that, together with CBL, held Texaco;

 
 • 
“IFRS” are to International Financial Reporting Standards, as issued by the International Accounting Standards Board;

 
 • 
“Imaven” are to Imaven Imóveis Ltda.; 

 
 • 
“Ipiranga” are to Ultrapar’s subsidiaries that operate in the fuel distribution business and related activities;

 
 • 
“Ipiranga Group” are to RPR, DPPI, CBPI, Ipiranga Química S.A. (“IQ”), Ipiranga Petroquímica S.A. (“IPQ”),Companhia Petroquímica do Sul S.A. (“Copesul”) and their respective subsidiaries prior to their sale to Ultrapar, Petrobras and Braskem; 

 
 • 
“Ipiranga Group SPA” are to the Share Purchase Agreement entered into and among Ultrapar, with the consent of Petrobras and Braskem, and theKey Shareholders on March 18, 2007; 

 
 • 
“Ipiranga Group Transaction Agreements” are to agreements related to the acquisition of Ipiranga Group by Ultrapar, Petrobras and Braskem.Each Ipiranga Group Transaction Agreement is incorporated by reference to Exhibits 2.5, 2.6, 2.7, 4.4, 4.5, 4.6 and 4.7 to Form 20-F of Ultrapar Participações S.A. filed on June 7, 2007; 

 
 • 
“IPP” are to Ipiranga Produtos de Petróleo S.A., formerly CBL; 

 
 • 
“Key Shareholders” are to Ipiranga Group’s former controlling shareholders prior to the closing of the Ipiranga Group SPA;

 
 • 
“Latin America” are to countries in America other than the United States and Canada; 

 
 • 
“LPG” are to liquefied petroleum gas; 

 
 • 
“LPG International” are to LPG International Inc.; 

 
 • 
“New Ultra S.A. Shareholders’ Agreement” has the meaning given in “Item 4.A. Information on the Company — History andDevelopment of the Company”, “Item 7.A. Major Shareholders and Related Party Transactions — Major Shareholders” and “Item 10. Additional Information — Material Contracts”; 

 
 • 
“NYSE” are to the New York Stock Exchange; 

 
 • 
“Northern Distribution Business” are to former CBPI’s fuel and lubricant distribution businesses located in the North, Northeast andMidwest regions of Brazil; 

 
 • 
“*Novo Mercado*” are to *Novo Mercado* listing segment of BM&FBOVESPA; 

 
 • 
“Oxiteno” are to Oxiteno S.A. – Indústria e Comércio, our wholly owned subsidiary and its subsidiaries that produceethylene oxide and its principal derivatives, fatty alcohols and other specialty chemicals; 

 
 • 
“Petrobras” are to Petrobras – Petróleo Brasileiro S.A.; 

 
 • 
“Petrochemical Business” are to IQ, IPQ and IPQ’s stake in Copesul; 

 
 • 
“Petrolog” are to Petrolog Serviços e Armazéns Gerais Ltda.; 

 
 • 
“PFIC” are to Passive Foreign Investment Company; 

 
 • 
“*Real*”, “*Reais*” or “R$” are to Brazilian *Reais*, the official currency of Brazil;

 
 • 
“Repsol” are to Repsol Gás Brasil S.A.; 

 
 • 
“RPR” are to Refinaria de Petróleo Riograndense S.A. (formerly Refinaria de Petróleo Ipiranga S.A.), a company engaged in oilrefining; 

 
 • 
“SBP” are to Sociedade Brasileira de Participações Ltda., a company that was merged into IPP in August 2009;

 
 • 
“SEC” are to the U.S. Securities and Exchange Commission; 

 
2 

Table of Contents • 
“Securities Act” are to the U.S. Securities Act of 1933, as amended; 

 
 • 
“Serma” are to *Associação dos Usuários de Equipamentos de Processamento de Dados e Serviços Correlatos*,which is responsible for providing IT services to Ultrapar; 

 
 • 
“Share Exchange” are to the exchanges of RPR’s, DPPI’s and CBPI’s preferred shares and any remaining common shares forUltrapar’s preferred shares in connection with the acquisition of Ipiranga Group; 

 
 • 
“Sindigás” are to the Brazilian Association of LPG Distributors; 

 
 • 
“Sindicom” are to the Brazilian Association of Fuel Distributors; 

 
 • 
“Southern Distribution Business” are to Ipiranga Group’s fuel and lubricant distribution businesses located in the South and Southeastregions of Brazil and their related activities; 

 
 • 
“STF” are to Supremo Tribunal Federal, the Brazilian Supreme Federal Court; 

 
 • 
“Texaco” are to the Texaco-branded fuels marketing business in Brazil, previously carried-out by CBL and Galena;

 
 • 
“Tequimar” are to Terminal Químico de Aratu S.A., Ultrapar’s subsidiary that operates in the liquid bulk storage segment;

 
 • 
“Tropical” are to Tropical Transportes Ipiranga Ltda.; 

 
 • 
“TRR” are to Retail Wholesale Resellers, specialized resellers in the fuel distribution; 

 
 • 
“Ultra S.A.” are to Ultra S.A. Participações, a holding company owned by members of the founding family and senior managementof Ultrapar.,Ultra S.A. is the largest shareholder of Ultrapar, holding 24% of its total capital stock. Prior to the Conversion, Ultra S.A. owned 66% of the voting capital of Ultrapar; 

 
 • 
“Ultracargo” are to Ultracargo Operações Logísticas e Participações Ltda., our wholly owned subsidiary andits subsidiaries that provide storage, handling and logistics services for liquid bulk cargo; 

 
 • 
“Ultragaz” are to Ultrapar’s subsidiaries that operate in the distribution of LPG; 

 
 • 
“União Terminais” are to União Terminais e Armazéns Gerais Ltda., a company that was merged into Tequimar in December2008; 

 
 • 
“União/Vopak” are to União/Vopak Armazéns Gerais Ltda., a company in which União Terminais had a 50% stake;

 
 • 
“Unipar” are to União das Indústrias Petroquímicas S.A.; 

 
 • 
“U.S. Holder” has the meaning given in “Item 10. Additional Information – E. Taxation – Material U.S. Federal Income TaxConsiderations”; and 

 
 • 
“US$”, “dollars” or “U.S. dollars” are to the United States dollar. 

Unless otherwise specified, data related to (i) the Brazilian petrochemical industry included in this annual report were obtainedfrom ABIQUIM, (ii) the LPG business were obtained from Sindigás and ANP, (iii) the fuel distribution business were obtained from Sindicom and ANP, and (iv) the liquid bulk storage industry were obtained from ABTL. 

 
3 

Table of Contents
**PRESENTATION OF FINANCIAL INFORMATION**

Our audited consolidated financial statements included herein were prepared in accordance with IFRS and include our consolidated balancesheets as of December 31, 2011 and 2010, and statements of income, comprehensive income, changes in shareholders’ equity and cash flows for the years ended December 31, 2011, 2010 and 2009, as well as notes thereto. We have notincluded our consolidated balance sheets for the year ended December 31, 2009 in the audited consolidated financial statements. 

The company first adopted IFRS for the consolidated financial statements for the year ended December 31, 2010. The transition date chosen by the company for the application of IFRS wasJanuary 1, 2009, the date on which the company prepared its opening balance sheet in accordance with IFRS. As permitted by the applicable rules to first-time adopters of IFRS, we have not included in the selected financial data in this annualreport our consolidated balance sheets and statements of income as of and for the years ended December 31, 2008 and 2007. The financial information presented in this annual report should be read in conjunction with our consolidated financialstatements. 

In August 2008, Ultrapar executed a sale and purchase agreement for the acquisition of Texaco’s fueldistribution business in Brazil, which was closed on March 31, 2009. The results of operations of the businesses acquired were consolidated into Ultrapar’s financial statements as from April 1, 2009. Ultrapar’s financialstatements as of and for the periods prior to April 1, 2009 do not reflect any financial information of the acquired businesses. See “Item 4.A. Information on the Company — History and Development of the Company — Description ofthe Acquisition of Texaco.” 

On April 20, 2012 the exchange rate for *Reais* into U.S. dollars was R$1.879 toUS$1.00, based on the commercial selling rate as reported by the Central Bank. The commercial selling rate was R$1.876 to US$1.00 on December 31, 2011, and R$1.666 to US$1.00 on December 31, 2010. The *Real*/dollar exchange ratefluctuates widely, and the current commercial selling rate may not be indicative of future exchange rates. See “Item 3.A. Key Information — Selected Consolidated Financial Data — Exchange Rates” for information regarding exchangerates for the Brazilian currency. Solely for the convenience of the reader, we have translated some amounts included in “Item 3.A. Key Information — Selected Consolidated Financial Information” and elsewhere in this annual report from*Reais* into U.S. dollars using the commercial selling rate as reported by the Central Bank at December 31, 2011 of R$1.876 to US$1.00. These translations should not be considered representations that any such amounts have been, could havebeen or could be converted into U.S. dollars at that or at any other exchange rate. Such translations should not be construed as representations that the *Real* amounts represent or have been or could be converted into U.S. dollars as of thator any other date. 

Segment information for our businesses is presented on an unconsolidated basis. Consequently, intercompanytransactions have not been eliminated in segment information, and such information may differ from consolidated financial information provided elsewhere in this annual report. See “Item 7.B. Major Shareholders and Related Party Transactions— Related Party Transactions” for more information on intercompany transactions. 

Certain figures included in thisannual report have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them. 

**Market share and economic information**

All market share information, unlessotherwise specified, related to (i) the LPG business was obtained from Sindigás and ANP, (ii) the fuel distribution business was obtained from Sindicom and ANP, and (iii) the liquid bulk storage industry was obtained from ABTL.Unless otherwise specified, all macroeconomic data are obtained from the *Instituto Brasileiro de Geografia e Estatística*—IBGE, *Fundação Getúlio Vargas*—FGV and the Central Bank. Although we do nothave any reason to believe any of this information is inaccurate in any material respect, we have not independently verified any such information. 

 
4 

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**FORWARD-LOOKING STATEMENTS**

This annual report contains forward-looking statements within the meaning of Section 27A of the Securities Act subject to risks anduncertainties, including our estimates, plans, forecasts and expectations regarding future events, strategies and projections. Forward-looking statements speak only as of the date they were made, and we undertake no obligation to update publicly orrevise any forward-looking statements after we distribute this annual report because of new information, future events and other factors. Words such as “believe”, “expect”, “may”, “will”, “plan”,“strategy”, “prospect”, “foresee”, “estimate”, “project”, “anticipate”, “can”, “intend” and similar words are intended to identify forward-looking statements. We havemade forward-looking statements with respect to, among other things, our: 

 
 • 
strategy for marketing and operational expansion; 

 
 • 
capital expenditures forecasts; and 

 
 • 
development of additional sources of revenue. 

The risks and uncertainties described above include, but are not limited to: 

 
 • 
the effect of the global economic situation on the Brazilian and Latin American economic condition; 

 
 • 
general economic and business conditions, including the price of crude oil and other commodities, refining margins and prevailing foreign exchangerates; 

 
 • 
competition; 

 
 • 
ability to produce and deliver products on a timely basis; 

 
 • 
ability to anticipate trends in the LPG, fuels, chemicals and logistics industries, including changes in capacity and industry price movements;

 
 • 
changes in official regulations; 

 
 • 
receipt of official authorizations and licenses; 

 
 • 
political, economic and social events in Brazil; 

 
 • 
access to sources of financing and our level of indebtedness; 

 
 • 
ability to integrate acquisitions; 

 
 • 
regulatory issues relating to acquisitions; 

 
 • 
instability and volatility in the financial markets; 

 
 • 
availability of tax benefits; and 

 
 • 
other factors contained in this 20-F under “Item 3.D. Key Information—Risk Factors.” 

Forward-looking statements involve risks and uncertainties and are not a guaranty of future results. In light of the risks anduncertainties described above, the forward-looking events and circumstances discussed in this annual report might not occur and our future results may differ materially from those expressed in or suggested by these forward-looking statements.

**PART I**

 
**ITEM 1.****IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS**
Not applicable. 

 
**ITEM 2.****OFFER STATISTICS AND EXPECTED TIMETABLE**
Not applicable. 

 
**ITEM 3.****KEY INFORMATION**
**A. SelectedConsolidated Financial Data**

We have selected the following consolidated financial data from our audited consolidatedfinancial statements, for the periods indicated. You should read our selected consolidated financial data in conjunction with “Item 5. Operating and Financial Review and Prospects” and our consolidated financial statements and notesthereto included in this annual report. Our consolidated financial statements are prepared in *Reais* in accordance with IFRS. The consolidated balance sheet 

 
5 

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information as of December 31, 2011 and 2010, and the consolidated statements of income, statements of comprehensive income, cash flows and changes in shareholders’ equity for the yearsended December 31, 2011, 2010 and 2009 are derived from our audited consolidated financial statements included in this annual report. The following table presents our selected financial information in accordance with IFRS at the dates and foreach of the periods indicated. 

 
   **Year Ended December 31,**    **IFRS**    **2011(1)**  **2011**  **2010**  **2009**    **(in millions, except per share data)** 
**Income Statements:**
  ** ****US$****  ** ** ****R$****  ** ** ****R$****  ** ** ****R$****  **
**Net revenue from sales and services**
  ** ****25,941.6****  ** ** ****48,661.3****  ** ** ****42,481.7****  ** ** ****36,097.1****  **
Cost of products and services sold
   (24,064.2)   (45,139.6)   (39,322.9)   (33,443.6)   
 

 
  
 

 
  
 

 
  
 

 
 
**Gross income**
  ** ****1,877.4****  ** ** ****3,521.7****  ** ** ****3,158.8****  ** ** ****2,653.5****  **
**Operating revenues (expenses)**
     
Selling and marketing
   (719.6)   (1,349.9)   (1,164.4)   (1,020.3) 
General and administrative
   (422.9)   (793.2)   (759.7)   (751.4) 
Income from disposal of assets
   11.4    21.4    79.0    18.9  
Other operating income, net
   27.7    52.0    10.8    19.3  
**Operating income**
  ** ****774.0****  ** ** ****1,452.0****  ** ** ****1,324.5****  ** ** ****920.0****  **
Financial revenues
   171.9    322.4    267.0    176.2  
Financial expenses
   (329.9)   (618.9)   (531.1)   (467.7) 
Equity in income of subsidiaries and affiliates
   0.1    0.2    —      0.2    
 

 
  
 

 
  
 

 
  
 

 
 
**Income before income and social contribution taxes**
  ** ****616.1****  ** ** ****1,155.7****  ** ** ****1,060.4****  ** ** ****628.8****  **
**Income and social contribution taxes**
     
Current
   (129.7)   (243.2)   (191.2)   (182.2) 
Deferred charges
   (45.8)   (85.9)   (134.7)   (26.4) 
Taxes incentives — ADENE
   15.0    28.2    30.7    20.6    
 

 
  
 

 
  
 

 
  
 

 
   ** ****(160.5****) ** ** ****(300.9****) ** ** ****(295.2****) ** ** ****(188.0****) **  
 

 
  
 

 
  
 

 
  
 

 
 
**Net income**
  ** ****455.6****  ** ** ****854.8****  ** ** ****765.2****  ** ** ****440.7****  **
Income attributable to:
       
 

 
  
 

 
  
 

 
  
 

 
 
Shareholders of the company
   452.4    848.8    765.3    437.1    
 

 
  
 

 
  
 

 
  
 

 
 
Non-controlling interests in subsidiaries
   3.2    6.0    (0.1)   3.6    
 

 
  
 

 
  
 

 
  
 

 
 
Earnings per share(2)
   0.85    1.59    1.43    0.82    
 

 
  
 

 
  
 

 
  
 

 
 
Dividends per common shares(3)
   0.52    0.98    0.80    0.52    
 

 
  
 

 
  
 

 
  
 

 
 
Dividends per preferred shares(3)
   0.52    0.98    0.80    0.52    
 

 
  
 

 
  
 

 
  
 

 
 
**Other financial data**
     
Cash flows from operating activities(4)
   911.7    1,710.1    1,508.2    1,742.1  
Cash flows from investing activities(4)
   (777.2)   (1,457.9)   (903.6)   (1,609.0) 
Cash flows from financing activities(4)
   (588.8)   (1,104.4)   153.6    484.5  
Depreciation and amortization(5)
   309.2    580.1    530.8    529.3  
**Adjusted EBITDA(6)**
  ** ****1,071.9****  ** ** ****2,010.7****  ** ** ****1,776.3****  ** ** ****1,430.4****  **
Net cash (debt)(7)
   (1,481.7)   (2,779.3)   (2,175.7)   (2,131.8) 
Number of common shares (in thousands)(8)
   544,384.0    544,384.0    197,719.6    197,719.6  
Number of preferred shares (in thousands)(8)
   —      —      346,664.4    346,664.4    
 

 
  
 

 
  
 

 
  
 

 
 
 
(1)The figures in *Reais* for December 31, 2011 have been converted into dollars using the exchange rate of US$1.00 = R$1.876, which is the commercial ratereported by the Central Bank on this date. This information is presented solely for the convenience of the reader. You should not interpret the currency conversions in this annual report as a statement that the amounts in *Reais* currentlyrepresent such values in U.S. dollars. Additionally, you should not interpret such conversions as statements that the amounts in *Reais* have been, could have been or could be converted into U.S. dollars at this or any other foreign exchangerates. See “Item 3.A. Key Information — Selected Consolidated Financial Data — Exchange Rates.” 
 
6 

Table of Contents(2)Net earnings per share are calculated based on the net income attributable to Ultrapar’s shareholders and the weighted average shares outstanding during each ofthe periods presented. Net earnings per share have been retroactively adjusted for the 1:4 stock split approved in the extraordinary general shareholders’ meeting held on February 10, 2011 described under “Item 4.A. Information on theCompany — History and Development of the Company.” (3)See “Item 8.A. Financial Information — Consolidated Statements and Other Financial Information — Dividend and Distribution Policy” for informationregarding declaration and payment of dividends. Dividends per share were retroactively adjusted for the 1:4 stock split approved in the extraordinary general shareholders’ meeting held on February 10, 2011 described under “Item 4.A.Information on the Company — History and Development of the Company.” (4)Cash flow information has been derived from our consolidated financial statements prepared in accordance with IFRS. See our consolidated financial statements.(5)Represents depreciation and amortization expenses included in cost of products and services sold and in selling, general and administrative expenses.(6)The purpose of including adjusted EBITDA information is to provide a measure used by the management for internal assessment of our operating results. It is also afinancial indicator widely used by investors and analysts to measure our ability to generate cash from operations and our operating performance. Adjusted EBITDA is equal to net income before equity in income of affiliates, income and socialcontribution taxes, loss (income) from disposal of assets, net financial expense (revenue) and depreciation and amortization. Our definition of adjusted EBITDA may differ from, and, therefore, may not be comparable with similarly titled measuresused by other companies, thereby limiting its usefulness as a comparative measure. In managing our business we rely on adjusted EBITDA as a means for assessing our operating performance and a portion of our employee profit sharing plan is linked toadjusted EBITDA performance. Because adjusted EBITDA excludes equity in income of affiliates, income and social contribution taxes, loss (income) from disposal of assets, net financial expense (revenue), and depreciation and amortization, itprovides an indicator of general economic performance that is not affected by debt restructurings, fluctuations in interest rates or effective tax rates, or levels of other income, depreciation and amortization. Accordingly, we believe that thistype of measurement is useful for comparing general operating performance from period to period and making certain related management decisions. We also calculate adjusted EBITDA in connection with covenants related to some of our financing. Webelieve that adjusted EBITDA enhances the understanding of our financial performance and our ability to satisfy principal and interest obligations with respect to our indebtedness as well as to fund capital expenditures and working capitalrequirements. Adjusted EBITDA is not a measure of financial performance under IFRS. Adjusted EBITDA 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 fromoperations or as a measure of liquidity. Adjusted 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 significantlyaffect profitability such as financial expenses and income taxes, depreciation or capital expenditures and associated charges. The tables below provide a reconciliation of our net income to our adjusted EBITDA, of our operating income to ouradjusted EBITDA and of the operating income of Ultragaz, Ipiranga, Oxiteno and Ultracargo and their respective adjusted EBITDA for the years ended December 31, 2011, 2010 and 2009: 
 
   **Ultrapar**    **Reconciliation of net income to adjusted EBITDA**    **Year ended December 31**    **IFRS**    **2011**  **2010**  **2009**    **(in millions of*****Reais*****)** 
Net income for the year
   854.8    765.2    440.7  
Equity in income of affiliates
   (0.2)   (0.0)   (0.2) 
Income and social contribution taxes
   300.9    295.2    188.0  
Loss (income) from disposal of assets
   (21.4)   (79.0)   (18.9) 
Net financial expense (revenue)
   296.5    264.1    291.5  
Depreciation and amortization
   580.1    530.8    529.3    
 

 
  
 

 
  
 

 
 
**Adjusted EBITDA**
  ** ****2,010.7****  ** ** ****1,776.3****  ** ** ****1,430.4****  **  
 

 
  
 

 
  
 

 
 
 
7 

Table of Contents   **Ultrapar**    **Reconciliation of operating income to adjusted EBITDA**    **Year ended December 31**    **IFRS**    **2011**  **2010**  **2009**    **(in millions of*****Reais*****)** 
Operating income
   1,452.0    1,324.5    920.0  
Depreciation and amortization
   580.1    530.8    529.3  
Loss (income) from disposal of assets
   (21.4)   (79.0)   (18.9)   
 

 
  
 

 
  
 

 
 
**Adjusted EBITDA**
  ** ****2,010.7****  ** ** ****1,776.3****  ** ** ****1,430.4****  **  
 

 
  
 

 
  
 

 
    **Ultragaz**    **Reconciliation of operating income to adjusted EBITDA**    **Year ended December 31**    **IFRS**    **2011**  **2010**  **2009**    **(in millions of*****Reais*****)** 
Operating income
   162.7    181.2    171.3  
Depreciation and amortization
   117.5    118.8    113.6  
Loss (income) from disposal of assets
   1.7    7.4    (3.8)   
 

 
  
 

 
  
 

 
 
**Adjusted EBITDA**
  ** ****281.9****  ** ** ****307.4****  ** ** ****281.2****  **  
 

 
  
 

 
  
 

 
    **Oxiteno**    **Reconciliation of operating income to adjusted EBITDA**    **Year ended December 31**    **IFRS**    **2011**  **2010**  **2009**    **(in millions of*****Reais*****)** 
Operating income
   154.8    114.1    68.5  
Depreciation and amortization
   106.3    104.1    102.6  
Loss (income) from disposal of assets
   (0.1)   22.9    (0.4)   
 

 
  
 

 
  
 

 
 
**Adjusted EBITDA**
  ** ****261.0****  ** ** ****241.2****  ** ** ****170.7****  **  
 

 
  
 

 
  
 

 
    **Ultracargo**    **Reconciliation of operating income to adjusted EBITDA**    **Year ended December 31**    **IFRS**    **2011**  **2010**  **2009**    **(in millions of*****Reais*****)** 
Operating income
   88.9    115.8    58.2  
Depreciation and amortization
   29.3    28.9    52.8  
Loss (income) from disposal of assets
   (0.1)   (33.2)   (6.6)   
 

 
  
 

 
  
 

 
 
**Adjusted EBITDA**
  ** ****118.1****  ** ** ****111.5****  ** ** ****104.5****  **  
 

 
  
 

 
  
 

 
 
 
8 

Table of Contents   **Ipiranga**    **Reconciliation of operating income to adjusted EBITDA**    **Year ended December 31**    **IFRS**    **2011**  **2010**  **2009**    **(in millions of*****Reais*****)** 
Operating income
   1,037.1    879.5    586.6  
Depreciation and amortization
   316.2    269.1    251.4  
Loss (income) from disposal of assets
   (22.9)   (75.2)   (8.0)   
 

 
  
 

 
  
 

 
 
**Adjusted EBITDA**
  ** ****1,330.4****  ** ** ****1,073.4****  ** ** ****829.9****  **  
 

 
  
 

 
  
 

 
 
The reconciliation of adjusted EBITDA to cash flows from operating activities for the years endingDecember 31, 2011, 2010 and 2009 is presented in the table below. 

 
   **2011**  **2010**  **2009**    **(in millions of reais)** 
**Net income for the year**
  ** ****854.8****  ** ** ****765.2****  ** ** ****440.7****  **
**Adjustments to reconcile net income to adjusted EBITDA:**
    
Equity in income of subsidiaries and affiliates
   (0.2)   (0.0)   (0.2) 
Depreciation and amortization
   580.1    530.8    529.3  
Income from disposal of assets
   (21.4)   (79.0)   (18.9) 
Net financial expense (revenue)
   296.5    264.1    291.5  
Income and social contribution taxes
   300.9    295.2    188.0    
 

 
  
 

 
  
 

 
 
**Adjusted EBITDA**
  ** ****2,010.7****  ** ** ****1,776.3****  ** ** ****1,430.4****  **  
 

 
  
 

 
  
 

 
 
**Adjustments to reconcile adjusted EBITDA to cash provided by operating activities:**
    
Financial result that affected the cash flow from operating activities
   439.5    150.5    (180.8) 
Current income and social contribution taxes
   (243.2)   (191.2)   (182.2) 
Tax incentives (income and social contribution taxes)
   28.2    30.7    20.6  
PIS and COFINS credits on depreciation
   10.2    9.6    10.2  
Expense with tanks removed
   (3.0)   (5.8)   (3.3) 
Others
   2.6    1.0    1.6  
**(Increase) decrease in current assets**
    
Trade accounts receivable
   (303.1)   (94.7)   92.0  
Inventories
   (164.3)   (131.3)   380.9  
Recoverable taxes
   (115.1)   (34.3)   52.0  
Other receivables
   (1.6)   16.9    69.7  
Prepaid expenses
   (5.0)   (8.3)   8.4  
**Increase (decrease) in current liabilities**
    
Trade payables
   155.6    21.1    47.4  
Salaries and related charges
   38.6    54.4    (2.7) 
Taxes payable
   (48.3)   36.5    19.6  
Income and social contribution taxes
   93.3    94.8    42.6  
Other payables
   36.4    (1.1)   (3.4) 
**(Increase) decrease in non-current assets**
    
Trade accounts receivable
   (21.0)   (11.2)   (23.4) 
Recoverable taxes
   (26.4)   (1.0)   (8.5) 
Escrow deposits
   (88.6)   (72.3)   (44.2) 
Other receivables
   (0.6)   0.8    1.8  
Prepaid expenses
   (28.6)   6.7    (10.9) 
**Increase (decrease) in non-current liabilities**
    
Provision for contingencies
   41.7    (107.3)   60.7  
Other payables
   33.9    27.8    4.9  
Income and social contribution taxes paid
   (131.5)   (60.5)   (41.3)   
 

 
  
 

 
  
 

 
 
**Net cash provided by operating activities**
  ** ****1,710.1****  ** ** ****1,508.2****  ** ** ****1,742.1****  **  
 

 
  
 

 
  
 

 
 
 
9 

Table of Contents
 
(7)Net cash (debt) is included in this document in order to provide the reader with information relating to our overall indebtedness and financial position. Net cash(debt) is not a measure of financial performance or liquidity under IFRS. In managing our businesses we rely on net cash (debt) as a means of assessing our financial condition. We believe that this type of measurement is useful for comparing ourfinancial condition from period to period and making related management decisions. Net cash (debt) is also used in connection with covenants related to some of our financings. The table below provides a reconciliation of our consolidated balancesheet data to the net cash (debt) positions shown in the table, as of December 31, 2011, 2010 and 2009: 
 
   **Ultrapar**    **Reconciliation of cash and cash equivalents to net cash (debt)**    **Year ended December 31**    **IFRS**    **2011**  **2010**  **2009**    **(in millions of*****Reais*****)** 
Cash and cash equivalents
   1,791.0    2,642.4    1,887.5  
Current financial investments
   916.9    558.2    440.3  
Non-current financial investments
   74.4    19.8    7.2  
Current loans and finance lease
   (1,302.5)   (817.8)   (1,142.8) 
Current debentures
   (1,002.5)   (2.7)   (1.4) 
Non-current loans and finance lease
   (3,237.5)   (3,382.1)   (2,136.0) 
Non-current debentures
   (19.1)   (1,193.4)   (1,186.5)   
 

 
  
 

 
  
 

 
 
Net cash (debt) position
   (2,779.3)   (2,175.7)   (2,131.8)   
 

 
  
 

 
  
 

 
 
 
(8)The number of shares corresponds to the totality of shares issued by the company, including those held in treasury. The number of shares for all periods presented wasretroactively adjusted for the 1:4 stock split approved in the extraordinary general shareholders’ meeting held on February 10, 2011 described under “Item 4.A. Information on the Company — History and Development of theCompany.” 
 
10 

Table of Contents   **Year Ended December 31,**    **IFRS**    **2011(1)**   **2011**   **2010**   **2009** 
**Consolidated Balance Sheet Data:**
  ** ****US$****  **  ** ****R$****  **  ** ****R$****  **  ** ****R$****  **
**Current assets**
        
Cash and cash equivalents
   954.8     1,791.0     2,642.4     1,887.5  
Financial investments
   488.8     916.9     558.2     440.3  
Trade accounts receivable
   1,080.3     2,026.4     1,715.7     1,618.3  
Inventories
   698.4     1,310.1     1,133.5     942.2  
Recoverable Taxes
   250.8     470.5     354.3     320.2  
Other receivables
   10.8     20.3     18.1     35.3  
Prepaid expenses
   21.4     40.2     35.1     26.0    
 

 
   
 

 
   
 

 
   
 

 
 
**Total current assets**
  ** ****3,505.3****  **  ** ****6,575.5****  **  ** ****6,457.5****  **  ** ****5,269.7****  **  
 

 
   
 

 
   
 

 
   
 

 
 
**Non-current assets**
        
Financial investments
   39.7     74.4     19.8     7.2  
Trade accounts receivable
   62.8     117.7     96.7     86.4  
Related companies
   5.4     10.1     10.1     7.6  
Deferred income and social contribution taxes
   272.0     510.1     564.4     697.9  
Recoverable taxes
   43.4     81.4     54.8     53.2  
Escrow deposits
   250.2     469.4     380.7     308.5  
Other receivables
   0.7     1.3     0.7     1.5  
Prepaid expenses
   36.9     69.2     40.6     47.7    
 

 
   
 

 
   
 

 
   
 

 
    711.1     1,333.7     1,167.8     1,210.0    
 

 
   
 

 
   
 

 
   
 

 
 
Investments
        
Affiliates
   6.7     12.6     12.5     12.5  
Others
   1.5     2.8     2.8     2.3  
Property, plants and equipment
   2,281.1     4,278.9     4,003.7     3,784.5  
Intangible assets
   820.5     1,539.2     1,345.6     1,203.7    
 

 
   
 

 
   
 

 
   
 

 
    3,109.8     5,833.5     5,364.6     5,002.9    
 

 
   
 

 
   
 

 
   
 

 
 
**Total non-current assets**
  ** ****3,820.9****  **  ** ****7,167.2****  **  ** ****6,532.4****  **  ** ****6,212.9****  **  
 

 
   
 

 
   
 

 
   
 

 
 
**TOTAL ASSETS**
  ** ****7,326.2****  **  ** ****13,742.7****  **  ** ****12,989.8****  **  ** ****11,482.6****  **  
 

 
   
 

 
   
 

 
   
 

 
 
 
11 

Table of Contents   **Year Ended December 31,**    **IFRS**    **2011(1)**  **2011**  **2010**  **2009** 
**Consolidated Balance Sheet Data:**
  ** ****US$****  ** ** ****R$****  ** ** ****R$****  ** ** ****R$****  **
**Current liabilities**
     
Loans
   693.2    1,300.3    813.5    1,132.1  
Debentures
   534.4    1,002.5    2.7    1.4  
Finance leases
   1.2    2.2    4.3    10.7  
Trade payables
   573.1    1,075.1    941.2    891.9  
Salaries and related charges
   143.1    268.3    228.2    176.5  
Taxes payable
   58.5    109.7    157.9    121.5  
Dividends payable
   87.3    163.8    192.5    113.9  
Income and social contribution taxes payable
   20.6    38.6    76.8    19.0  
Post-employment benefits
   7.1    13.3    11.3    12.0  
Provision for assets retirement obligation
   3.9    7.3    5.6    3.8  
Provision for contingencies
   22.0    41.3    39.6    23.0  
Other payables
   29.5    55.6    29.7    48.7  
Deferred revenues
   10.5    19.7    14.6    11.8    
 

 
  
 

 
  
 

 
  
 

 
 
**Total current liabilities**
  ** ****2,184.4****  ** ** ****4,097.8****  ** ** ****2,517.9****  ** ** ****2,566.2****  **  
 

 
  
 

 
  
 

 
  
 

 
 
**Non-current liabilities**
     
Loans
   1,703.9    3,196.1    3,380.9    2,131.4  
Debentures
   10.2    19.1    1,193.4    1,186.5  
Finance leases
   22.1    41.4    1.3    4.6  
Related companies
   2.1    4.0    4.0    4.1  
Deferred income and social contribution taxes
   20.2    38.0    26.7    13.5  
Provision for contingencies
   273.4    512.8    470.5    540.2  
Post-employment benefits
   51.6    96.8    93.2    90.1  
Provision for assets retirement obligation
   32.1    60.3    58.3    60.8  
Other payables
   48.1    90.6    62.2    34.7  
Deferred revenues
   4.7    8.7    5.9    5.3    
 

 
  
 

 
  
 

 
  
 

 
 
**Total non-current liabilities**
  ** ****2,168.4****  ** ** ****4,067.7****  ** ** ****5,296.3****  ** ** ****4,071.2****  **  
 

 
  
 

 
  
 

 
  
 

 
 
**TOTAL LIABILITIES**
  ** ****4,352.8****  ** ** ****8,165.5****  ** ** ****7,814.3****  ** ** ****6,637.4****  **  
 

 
  
 

 
  
 

 
  
 

 
 
**Shareholders’ equity**
     
Share capital
   1,970.8    3,696.8    3,696.8    3,696.8  
Capital reserve
   5.2    9.8    7.7    4.5  
Revaluation reserve
   3.8    7.1    7.6    8.2  
Profit reserve
   979.7    1,837.7    1,513.9    1,177.0  
Treasury shares
   (63.0)   (118.2)   (120.0)   (123.7) 
Additional dividends to the minimum mandatory dividends
   65.2    122.2    68.3    56.9  
Valuation adjustment
   (2.4)   (4.4)   (2.4)   (4.1) 
Cumulative translation adjustments
   0.1    0.2    (18.6)   (5.3) 
Shareholders’ equity attributable to owners of the parent
   2,959.4    5,551.1    5,153.3    4,810.1    
 

 
  
 

 
  
 

 
  
 

 
 
Non-controlling interest in subsidiaries
   14.0    26.2    22.3    35.1    
 

 
  
 

 
  
 

 
  
 

 
 
**TOTAL SHAREHOLDERS’ EQUITY**
  ** ****2,973.4****  ** ** ****5,577.2****  ** ** ****5,175.5****  ** ** ****4,845.3****  **  
 

 
  
 

 
  
 

 
  
 

 
 
**TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY**
  ** ****7,326.2****  ** ** ****13,742.7****  ** ** ****12,989.8****  ** ** ****11,482.6****  **  
 

 
  
 

 
  
 

 
  
 

 
 
 
(1)The figures in *Reais* for December 31, 2011 have been converted into dollars using the exchange rate of US$1.00 = R$1.876, which is the commercial ratereported by the Central Bank on this date. This information is presented solely for the convenience of the reader. You should not interpret the currency conversions in this annual report as a statement that the amounts in *Reais*currentlyrepresent such values in U.S. dollars. Additionally, you should not interpret such conversions as statements that the amounts in *Reais* have been, could have been or could be converted into U.S. dollars at this or any other foreign exchangerates. See “Item 3.A. Key Information — Selected Consolidated Financial Data — Exchange Rates.” 
***Exchange Rates***

Before March 14, 2005, there were two principalforeign exchange markets in Brazil, in which notes were freely negotiated but could be strongly influenced by Central Bank intervention: 

 
 • 
the commercial rate exchange market dedicated principally to trade and financial foreign exchange transactions such as the buying and selling ofregistered investments by foreign entities, the purchase or sale of shares, or the payment of dividends or interest with respect to shares; and 

 
 • 
the floating rate exchange market that was generally used for transactions not conducted through the commercial foreign exchange market.

On March 4, 2005, the National Monetary Council enacted Resolution No. 3,265, pursuant to whichthe commercial rate exchange market and the floating rate exchange market were unified in a sole exchange market, effective as of March 14, 2005. The new resolution allows, subject to certain procedures and specific regulatory provisions, thepurchase and sale of foreign currency and the international transfer of *Reais* by a person or legal entity, without limitation of the amount involved; provided, however, the transaction is legal. Foreign currencies may only be purchasedthrough financial institutions domiciled in Brazil authorized to operate in the exchange market. 

 
12 

Table of Contents
From 2003 to 2007, the *Real* appreciated 39% against the U.S. dollar. In 2008, theworsening of the global financial crisis from mid-September onwards led to a sharp reduction in the flow of capital to Brazil that resulted in a 32% *Real* devaluation, reversing the *Real* appreciation trend in place since 2003. However,in 2009, the quick rebound of the Brazilian economy has driven the inflow of foreign investments in the country, thus contributing to a 25% appreciation of the *Real* against the U.S. dollar in 2009 – the highest appreciation in thedecade. In 2010, the effects of the strong economic growth in Brazil, together with the public offering of shares of Petrobras in the third quarter, resulted in a record of foreign investments inflow to Brazil, contributing to a 4% appreciation ofthe *Real* against the U.S. dollar. In 2011, the unstable international economic environment, especially in the second half of the year as a result of the effects of the European crisis, contributed to a 13% depreciation of the *Real*against the U.S. dollar for the year, reversing the appreciation trend in the first half of the year. From January 1, 2012 to April 20, 2012 the *Real* depreciated 0.1% against the U.S. dollar in the period. 

It is not possible to predict whether the *Real* will remain at its present level and what impact the Brazilian government’sexchange rate policies may have on us. 

On April 20, 2012, the exchange rate for *Reais* into U.S. dollars was R$1.879 to US$1.00,based on the commercial selling rate as reported by the Central Bank. The following table sets forth information on prevailing commercial foreign exchange selling rates for the periods indicated, as published by the Central Bank on its electronicinformation system, SISBACEN, using PTAX 800, Option 5. 

 
   **Exchange rates of nominal Reais per US$1.00**    **High**   **Low**   **Average**  **Period-**