Rio de Janeiro, December 18, 2018 – Petróleo Brasileiro S.A. – Petrobras reports that its Board of Directors approved in a meeting held today, the advance distribution of earnings to shareholders as Interest on Capital (IOC), as defined in article 9, sole paragraph of its bylaws and article 9 of Law 9,249/95.
The amount to be distributed, which totals R$ 4,293,552,658.70 and corresponds to a gross amount of R$ 0.05 per common share and R$ 0.70 per preferred share, will be paid within 60 days from the Ordinary General Meeting (OGM) to be held on 4/25/2019, or at a different date in the year 2019 as decided during the OGM, in proportion to each shareholder’s stake and will be provisioned in the financial statements for 4Q 2018, based on the shareholding position at December 21, 2018. With this IOC installment, total advance amounts for the 2018 financial year amounted to R$ 0.25 per common share and R$ 0.90 per preferred share.
Total compensation to shareholders, from which advance amounts paid as IOC will be deducted, will be calculated based on profit in the 2018 financial statements, compliant to the minimum 25% of adjusted net income required by Law 6,404/76 (Brazilian Corporate Act). This IOC advance will be imputed to the mandatory dividend (article 53, paragraph 4, of the Bylaws), including for purposes of paying the priority dividends of preferred shares.
From the first business day after the cut-off date, namely, December 26, 2018, shares will be traded ex-interest on capital at B3.
The relevant dates pertinent to the Petrobras ADRs traded on the New York Stock Exchange (NYSE), will be disclosed in due course by The Bank of New York Mellon, the depositary bank of the Petrobras receipts on the NYSE.
The amounts of R$ 0.05 per common share and R$ 0.70 per preferred share related to the JCP will be adjusted in accordance with the variation of the Selic rate from 12/31/2018 until the effective payment date. In addition, withholding Income Tax shall be levied at the applicable rate over these amounts. The withholding of income tax will not be applied to shareholders who are proven immune or exempt, or shareholders domiciled in countries or jurisdictions for which the law provides for different treatment.
As defined in the Shareholder Compensation Policy, the decision to distribute dividends and/or other earnings, to be made upon assessing the 2018 financial year, will take several factors and variables into account such as Company earnings, its financial condition, cash requirements, future prospects of current and potential markets, investment opportunities, maintenance and expansion of the productive capacity. The amount of compensation allocated to preferred shareholders may be higher than the value of compensation to common shareholders in order to meet the minimum dividends provided for in article 5, paragraph 2 of Petrobras’ Bylaws, which ensures a minimum priority of 5% (five percent) to preferred shares in receiving dividends, to be calculated on the part of the capital represented by this kind of stock, or 3% (three percent) of shareholder’s equity, whichever greater.
The Shareholder Compensation Policy can be accessed on the Internet at the company’s website (http://www.petrobras.com.br/ri).