Petrobras – Enrollment of debt related to Petros Plan renegotiation in the Special Program for Tax Regularization

Rio de Janeiro, July 26, 2017 – Petróleo Brasileiro S.A. – Petrobras, pursuant to the material fact of June 30, 2017, reports that its Board of Directors approved today the inclusion in the Special Program for Tax Regularization (Programa Especial de Regularização Tributária – “PERT”),, established by Provisional Measure no. 783 of May 31, 2017, of debt in connection to the lawsuit on the deductibility of expenses related to the renegotiation of the Petros Plan pension fund from the calculation basis of Income Tax for Legal Entities (IRPJ) and Social Contribution on Net Profits (CSLL).

The company will make a payment of R$ 4.3 billion, of which R$ 1.3 billion in cash, while the remaining balance, amounting to approximately R$ 3 billion as of July 2017, will be paid in 145 monthly, successive installments due from January 2018. The value in installment payments considers 80% reductions in default interest, 40% in exofficio fine, and 25% in legal costs. All values will be updated at the SELIC rate, and enrollment in PERT represents 34% savings in debt value in nominal terms.

The net negative impact on the result of the 2nd quarter 2017 will be approximately R$ 6.0 billion, considering enrollment after tax (R$ 3.7 billion) and the revision of the procedure adopted by Petrobras for the fiscal years from 2012 to 2017, which does not generate effect on cash, but only on the balance of tax loss (R$ 2.3 billion).

It should be clarified that a portion pertaining to this lawsuit was favorably ruled on first legal instance, to an approximate amount of R$ 500 million, and therefore was not included on PERT as the company will continue to pursue the defense of its interests.

The information pertaining to this lawsuit is incorporated in the financial statements for the first quarter of 2017, under explanatory note 28 (Provisions for legal proceedings – item 28.3 – Contingent liabilities).

Categories: Financial, Petrobras

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