Pursuant to Rule 13a-16 or 15d-16 of the
20031-912 - Rio de Janeiro, RJ
Federative Republic of Brazil
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
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Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
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PETROBRAS ANNOUNCES RESULTS FOR THE FIRST QUARTER OF 2008
(Rio de Janeiro – May 12, 2008) – PETRÓLEO BRASILEIRO S.A. – Petrobras announces today its consolidated results expressed in millions of Brazilian Reais, in accordance with generally accepted accounting practices in Brazil (BR GAAP).
Consolidated net income in the 1Q-2008 moved up 68% year-on-year, thanks to the decline in operating expenses and the positive first-quarter impact of the reduced appreciation of the Real on the financial result. The increase in oil and gas production and the upturn in oil and oil product prices also contributed to the improved performance.
In comparison with the 4Q-2007, consolidated net income moved up by 37%, for the same reasons mentioned above, with a greater weight towards the reduction in operating expenses and a lesser emphasis on the price aspect.
The Company’s market capitalization increased by 69% year-on-year, mostly due to the oil and gas discoveries in the pre-salt layer, the new exploratory frontier, and potential production growth.
EBITDA climbed 26% year-on-year, largely due to reduced expenses, especially those related to taxes and the pension plan. In comparison with the 4Q-2007, EBITDA moved up 15%, largely thanks to lower exploration costs (dry wells), reduced general and administrative expenses and the non-occurrence of tax losses and losses from the recovery of assets.
The strong operating result and high cash flow in the 1Q-2008 allowed for substantial period investments as well as the payment of R$ 4.07 billion in interest on equity.
Average oil and gas production edged up 2% year-on-year due to the start-up of the FPSO-Cidade do Rio de Janeiro (Espadarte), Piranema (Piranema), Cidade de Vitória (Golfinho), P-52 (Roncador) and P-54 (Roncador) platforms. It is especially worth highlighting domestic natural gas output, which increased by 11% year-on-year and 10% quarter-over-quarter.
Due to delays associated with the availability of offshore support vessels in the 1Q-2008, oil production was not as high as originally expected and output from the P-52 and P-54 platforms will only reach maximum level in the second half of the year. In addition, difficulties related to maintaining pressure in the Golfinho reservoir hampered production from this field.
| This document is divided into five topics:: | ||||||
| PETROBRAS SYSTEM | Page | PETROBRAS | Page | |||
| Financial Performance | 05 | Financial Statements | 35 | |||
| Operating Performance | 10 | |||||
| Financial Statements | 24 | |||||
| Appendices | 32 | |||||
| SISTEMA PETROBRAS |  |
|
The Petrobras System’s investments in the 1Q-2008 moved up 23% year-on-year but fell 31% over the previous quarter.
The Petrobras System’s added value was 15% higher than in the 1Q-2007 and 10% more than in the 4Q-2007.
2
Statement by the CEO, José Sergio Gabrielli de Azevedo.
It gives us enormous satisfaction to be presenting the Company’s outstanding results for the first quarter of 2008, when we recorded a net income of R$ 6,925 million, 68% up year-on-year and one of the best first-quarter results in our history.
In the opening months of 2008, we gathered and published new data on the discoveries in the pre-salt layer of the Santos Basin. In January, we announced the confirmation of a major natural gas and condensate deposit in the Júpiter area of the BM-S-24 block. The well is 37 km east of Tupi and the reservoir is at a depth of around 5,100 meters.
Short-term swings in oil prices have a direct impact on the price of oil products, primarily by hitting the cost of refining inputs, although their pass-through to oil products depends on the specific conditions of each market and the behavior of the exchange rate. Last quarter, we were faced with a combination of an accelerated upturn in the price of crude oil, relatively stable national production and only a slight appreciation of the Real against the dollar, all of which squeezed refining margins.
In order to ensure the profitability of our Supply business, we have to make massive investments in conversion capacity, given that the vast majority of our domestic oil output consists of heavy crude. Huge investments in the E&P segment are equally necessary, as we try to take the maximum possible advantage of the favorable oil price scenario, monetizing current reserves and future discoveries. Both investments (E&P and Supply) jeopardize short-term cash flow, while their returns, given the lengthy maturation period of oil industry projects, will only become apparent in the future, therefore generating a temporary cash-flow mismatch. Thus the Company’s pricing policy, which seeks alignment in the medium to long term, has two main objectives: protecting the market from excessive short-term volatility and at the same time ensuring sufficient financing capacity for the investments needed to develop its business.
In May, in line with our policy of aligning prices with the international market in the medium to long-term, we adjusted our Brazilian refinery-gate gasoline and diesel prices. The process was handled with the utmost transparency and considered not only the commercial and economic aspects, but also the relative weight of our activities in Brazil’s economy and the impact the adjustments could have.
In the coming months, Petrobras will continue to focus on this promising region, assessing the potential of the existing pre-salt reserves. With this in mind, the Board of Directors created an exclusive department, directly subordinate to the E&P division executive, to take charge of all matters related to the pre-salt discoveries. Its main responsibility will be to coordinate the ongoing evaluation plans as well as to implant the long duration test (LDT) and initiate pilot production in Tupi, initially scheduled for 2009 and 2010 respectively.
We also expanded our international operations. In Peru, in association with other oil companies, we discovered a gas reservoir in Block 57, in Cuzco province. In the American section of the Mexican Gulf, we picked up 22 deep-water and ultra-deep-water blocks at the auction organized by the Minerals Management Service, the US offshore mineral resources regulator. As a result of these new concessions, there are now 221 exploratory blocks in the region, 157 of which operated by Petrobras.
3
We also signed an agreement with PDVSA, the Venezuelan state-owned oil company, establishing the groundwork for a joint venture in the Abreu e Lima Refinery, in Pernambuco, whose investments are estimated at US$ 4.05 billion. The refinery will be capable of processing 200,000 barrels of heavy crude per day. Petrobras will own 60% of the undertaking and PDVSA 40%. The refinery will play a key role in expanding our domestic production of diesel, the country’s most widely-consumed oil product. Start-up is scheduled for the second half of 2010.
In the petrochemical area, we continued to consolidate our holdings in Brazil. In February, Ultrapar transferred the Ipiranga companies’ petrochemical assets to Petrobras. In the following month, the AGM approved the incorporation of UPB Participações S.A., a wholly-owned Petrobras subsidiary.
The same meeting also approved a 1:2 split of the Company’s shares and ADRs. Following the split, each ADR was still equivalent to two shares.
Fully committed to expanding its share of biofuels, Petrobras announced the creation of a wholly-owned subsidiary to concentrate all activities related to the subject, which are currently dispersed through several Company areas and subsidiaries. The new firm will handle ethanol production, the acquisition of inputs and the processing of biodiesel, as well as administering future investments.
I cannot end without mentioning Brazil’s upgrading to investment grade status by the ratings agency Standard & Poor’s. This “promotion” means that international investors’ will be regarding the country in a considerably more favorable light, thanks to the lower risk associated with prospects of greater stability and predictability and Brazilian companies should benefit from new stock and bond acquisitions by foreign investors. In the case of Petrobras itself, the new climate will almost certainly make it easier to finance our operations.
Finally, I would like to reiterate our determination and technical capacity to overcome any challenges that may present themselves, maintaining our focus on profitability and social and environmental responsibility.
4
| PETROBRAS SYSTEM | Financial Performance | |
Net Income and Consolidated Economic Indicators
Petrobras posted a consolidated net income of R$ 6,925 million in 2007, 68% higher than in the 1Q-2007.
| R$ million | ||||||||
| First Quarter | ||||||||
| 4Q - 2007 | 2008 | 2007 | D % | |||||
| 57,922 | Gross Operating Revenues | 59,158 | 50,127 | 18 | ||||
| 45,417 | Net Operating Revenues | 46,892 | 38,894 | 21 | ||||
| 9,199 | Operating Profit (1) | 11,344 | 8,567 | 32 | ||||
| (859) | Financial Result | (400) | (935) | (57) | ||||
| 5,053 | Net Income | 6,925 | 4,131 | 68 | ||||
| 1.15 | Net Income per Share | 1.58 | 0.94 | 68 | ||||
| 429,923 | Market Value (Parent Company) | 364,372 | 215,666 | 69 | ||||
| 36 | Gross Margin (%) | 37 | 39 | (2) | ||||
| 18 | Operating Margin (%) | 23 | 19 | 4 | ||||
| 11 | Net Margin (%) | 15 | 11 | 4 | ||||
| 12,041 | EBITDA – R$ million(2) | 13,876 | 10,978 | 26 | ||||
| Financial and Economic Indicators | ||||||||
| 88.69 | Brent (US$/bbl) | 96.90 | 57.75 | 68 | ||||
| 1.7830 | US Dollar Average Price - Sale (R$) | 1.7388 | 2.1082 | (18) | ||||
| 1.7713 | US Dollar Last Price - Sale (R$) | 1.7491 | 2.0504 | (15) | ||||
| (1) |
Operating income before financial result, equity balance and taxes. |
| (2) |
Operating income before financial result, equity balance and depreciation/amortization. |
| First Quarter | ||||||||
| 4Q-2007 | 2008 | 2007 | D % | |||||
| 8,049 | Operating Income as per Brazilian Corporate Law | 10,956 | 7,548 | 45 | ||||
| 859 | (-) Financial Result | 400 | 935 | (57) | ||||
| 291 | (-) Equity Income Result | (12) | 84 | (114) | ||||
| 9,199 | Operating Profit | 11,344 | 8,567 | 32 | ||||
| 2,842 | Depreciation / Amortization | 2,532 | 2,411 | 5 | ||||
| 12,041 | EBITDA | 13,876 | 10,978 | 26 | ||||
| 27 | EBITDA Margin (%) | 30 | 28 | 7 | ||||
5
The behavior of the main components of consolidated net income, in relation to the 1Q-2007, was as follows:
- A R$ 2,051 million increase in gross profit:
| R$ million | ||||||||
| Changes | ||||||||
| 1Q-2008 X 1Q-2007 | ||||||||
| Main Items | Net Revenues |
Cost of Goods Sold |
Gross Profit | |||||
| . Domestic Market: | - Effect of Volumes Sold | 1,822 | (1,249) | 573 | ||||
| - Effect of Prices | 2,967 | - | 2,967 | |||||
| . Intl. Market: | - Effect of Export Volumes | (532) | 242 | (290) | ||||
| - Effect of Export Price | 2,142 | - | 2,142 | |||||
| . Increase in expenses: (*) | - | (4,246) | (4,246) | |||||
| . Increase in Profitability of Distribution Segment | (1) | 128 | 127 | |||||
| . Increase in operations of commercialization abroad | 2,093 | (1,673) | 420 | |||||
| . Increase in international sales | 486 | (310) | 176 | |||||
| . FX effect on controlled companies abroad | (761) | 648 | (113) | |||||
| . Other | (218) | 513 | 295 | |||||
| 7,998 | (5,947) | 2,051 | ||||||
| (*) Expenses Composition: | Value | |
| - import of gas, crude oil and oil products and gas (1) | (2,415) | |
| - domestic government take | (837) | |
| - non-oil products, including alcohol, biodiesel and other | (117) | |
| - materials, services and depreciation | (702) | |
| - transportation: maritime and pipelines(2) | (125) | |
| - salaries, perquisites and benefits | (42) | |
| - third-party services | (8) | |
| (4,246) | ||
| (1) |
CIF Values. |
| (2) |
Expenditures on cabotage, terminals and pipelines. |
6
A R$ 726 million reduction in operating expenses, notably:
- Tax expenses (R$ 150 million), due to the elimination of the CPMF financial transaction tax as of January/08.
- Other operating expenses (R$ 741 million), especially from the amendments to the Petros Plan in the 1Q-2007 (R$ 1,040 million), partially offset by higher expenses with contractual fines related to natural gas and electricity supply (R$ 253 million);
These effects were offset by the increase in selling expenses (R$ 177 million), due to higher freight expenses caused by the upturn in sales volume and the increase in average distribution and offshore freight costs (R$ 40 million and R$ 39 million, respectively) plus the increase in provisions for doubtful debts.
- A positive impact of R$ 535 million on the net financial result, due to the impact of the lower appreciation of the Real in 2008 on subsidiaries’ investments abroad and, in the International segment, on the purchase of E&P equipment for use in Brazil, and commercial activities.
7
Net income in the 1Q-2008 totaled R$ 6,925 million, 37% up on the R$ 5,053 million posted in the 4Q-2007 due to the factors listed below:
- R$ 790 million growth in gross profit:
| R$ million | ||||||||
| Change | ||||||||
| 1Q-2008 x 4Q-2007 | ||||||||
| Main Items | Net Revenues |
Cost of Goods Sold |
Gross Profit | |||||
| . Domestic Market: | - Effect of Volumes Sold | (1,168) | 862 | (306) | ||||
| - Effect of Prices | 1,345 | - | 1,345 | |||||
| . Intl. Market: | - Effect of Export Volumes | (1,177) | 1,021 | (156) | ||||
| - Effect of Export Price | 172 | - | 172 | |||||
| . Increase in expenses: (*) | - | (789) | (789) | |||||
| . Increase in Profitability of Distribution Segment | (78) | (175) | (253) | |||||
| . Increase in operations of commercialization abroad | 1,021 | - | 149 | |||||
| . Increase in international sales | (1,216) | 1,213 | (3) | |||||
| . FX effect on controlled companies abroad | 1,103 | (1,014) | 89 | |||||
| . Other | 1,473 | (931) | 542 | |||||
| 1,475 | (685) | 790 | ||||||
| (*) Expenses Composition: | Value | |
| - domestic government take | (109) | |
| - import of gas, crude oil and oil products (1) | (74) | |
| - non-oil products, including alcohol, biodiesel and other | 12 | |
| - materials, services and depreciation | (597) | |
| - transportation: maritime and pipelines(2) | (146) | |
| - third-party services | 21 | |
| - salaries, perquisites and benefits | 104 | |
| (789) | ||
| (1) |
CIF values. |
| (2) |
Expenditures on cabotage, terminals and pipelines. |
8
-
A reduction in the following operating expenses:
- General and administrative expenses (R$ 265 million), due to reduced expenses from technical services and higher personnel expenses in the 4Q-2007 as a result of payments related to retroactive promotions as part of the 2007/08 collective bargaining
agreement;
- Exploration costs (R$ 385 million), due to lower exploration expenses, both in Brazil (R$ 129 million) and abroad (R$ 461 million), offset by the December/07 recalculation of provisions for well abandonment (R$ 292 million);
- Losses from the recovery of assets (R$ 446 million), due to the provisions constituted abroad in the 4Q- 2007;
- Tax expenses (R$ 156 million), due to the elimination of the CPMF as of January/08 (R$ 179 million), partially offset by expenses from the IOF financial operation tax due to the increase in the rate in the same month (R$ 34 million).
-
A positive impact of R$ 459 million on the net financial result due to monetary and exchange gains (R$ 454 million) caused by the lower appreciation of the Real in the 1Q-2008, coupled with a reduction in net financial and
commercial hedge losses (R$ 287 million) and higher gains from financial investments (R$ 28 million);
-
Interests in relevant investments (R$ 303 million), due to the constitution of provisions for losses from investments in Venezuela in the 4Q-2007 (R$ 119 million) and exchange gains from the conversion of foreign subsidiaries’
shareholders equity (R$ 128 million).
- Increase in income tax and social contributions (R$ 1.613 million), due to the tax benefits of interest on equity in the 4Q-2007 (R$ 671 million).
9
| PETROBRAS SYSTEM | Operating Performance | |
Physical Indicators (*)
| First Quarter | ||||||||
| 4Q-2007 | 2008 | 2007 | D % | |||||
| Exploration & Production - Thousand bpd/day | ||||||||
| Domestic Production | ||||||||
| 1,782 | Oil and LNG | 1,816 | 1,800 | 1 | ||||
| 277 | Natural Gas (1) | 304 | 274 | 11 | ||||
| 2,059 | Total | 2,120 | 2,074 | 2 | ||||
| Consolidated - International Production | ||||||||
| 111 | Oil and LNG | 108 | 111 | (3) | ||||
| 101 | Natural Gas (1) | 103 | 103 | - | ||||
| 212 | Total | 211 | 214 | (1) | ||||
| 14 | Non Consolidated - Internacional Production (2) | 14 | 17 | (18) | ||||
| 226 | Total International Production | 225 | 231 | (3) | ||||
| 2,285 | Total production | 2,345 | 2,305 | 2 | ||||
(1)Does not include liquified gas and includes re-injected gas
(2)Non consolidated companies in Venezuela.
| Refining, Transport and Supply - Thousand bpd | ||||||||
| 400 | Crude oil imports | 351 | 340 | 3 | ||||
| 136 | Oil products imports | 228 | 97 | 135 | ||||
| 536 | Import of crude oil and oil products | 579 | 437 | 32 | ||||
| 322 | Crude oil exports | 314 | 377 | (17) | ||||
| 253 | Oil products exports | 258 | 247 | 5 | ||||
| 575 | Export of crude oil and oil products (3) | 572 | 624 | (8) | ||||
| 39 | Net exports (imports) crude oil and oil products | (7) | 187 | (104) | ||||
| 199 | Import of gas and others | 194 | 146 | 33 | ||||
| (3) 2 | Other exports | 2(3) | 1 | 100 | ||||
| 2,033 | Output of oil products | 1,892 | 2,041 | (7) | ||||
| 1,795 | • Brazil | 1,776 | 1,781 | - | ||||
| 238 | • International | 116 | 260 | (55) | ||||
| 2,167 | Primary Processed Installed Capacity | 2,167 | 2,227 | (3) | ||||
| 1,986 | • Brazil(4) | 1,986 | 1,986 | - | ||||
| 181 | • International | 181 | 241 | (25) | ||||
| Use of Installed Capacity (%) | ||||||||
| 90 | • Brazil | 89 | 90 | 1 | ||||
| 93 | • International | 60 | 85 | (25) | ||||
| 78 | Domestic crude as % of total feedstock processed | 79 | 77 | 2 | ||||
(3) Volumes of oil and oil products exports include ongoing exports
(4) As per ownership recognized by the ANP
| Sales Volume - Thousand bpd | ||||||||
| 1,776 | Total Oil Products | 1,703 | 1,646 | 3 | ||||
| 81 | Alcohol, Nitrogens, Biodiesel and others | 76 | 53 | 43 | ||||
| 272 | Natural Gas | 302 | 226 | 34 | ||||
| 2,129 | Total domestic market | 2,081 | 1,925 | 8 | ||||
| 577 | Exports | 574 | 625 | (8) | ||||
| 480 | International Sales | 557 | 655 | (15) | ||||
| 1,057 | Total international market | 1,131 | 1,280 | (12) | ||||
| 3,186 | Total | 3,212 | 3,205 | - | ||||
(*) Não revisado.
10
Prices and Costs Indicators (*)
| First Quarter | ||||||||
| 4Q-2007 | 2008 | 2007 | D % | |||||
| Average Oil Products Realization Prices | ||||||||
| 158.98 | Domestic Market (R$/bbl) | 163.07 | 150.97 | 8 | ||||
| Average sales price - US$ per bbl | ||||||||
| Brazil | ||||||||
| 76.75 | Crude Oil (US$/bbl)(5) | 86.13 | 47.79 | 80 | ||||
| 34.67 | Natural Gas (US$/bbl) (6) | 37.16 | 32.71 | 14 | ||||
| International | ||||||||
| 59.42 | Crude Oil (US$/bbl) | 62.23 | 42.41 | 47 | ||||
| 17.45 | Natural Gas (US$/bbl) | 16.98 | 14.48 | 17 | ||||
| (5) Average of the exports and the internal transfer prices from E&P to Supply. | ||||||||
| (6) Internal transfer prices from E&P to Gas & Energy. | ||||||||
| Costs - US$/barrel | ||||||||
| Lifting cost: | ||||||||
| • Brazil | ||||||||
| 8.60 | • • without government participation | 8.66 | 7.20 | 20 | ||||
| 23.16 | • • with government participation | 24.82 | 16.24 | 53 | ||||
| 4.41 | • International | 4.32 | 3.89 | 11 | ||||
| Refining cost | ||||||||
| 3.60 | • Brazil | 3.61 | 2.54 | 42 | ||||
| 3.04 | • International | 6.16 | 2.42 | 155 | ||||
| 794 | Corporate Overhead (US$ million) Holding Company (7) | 648 | 531 | 22 | ||||
| Costs - R$/barrel | ||||||||
| Lifting cost | ||||||||
| • Brazil | ||||||||
| 15.22 | • • without government participation | 15.16 | 15.20 | - | ||||
| 40.98 | • • with government participation | 43.20 | 34.12 | 27 | ||||
| Refining cost | ||||||||
| 6.36 | • Brazil | 6.30 | 5.36 | 18 | ||||
(7) The company, in order to achieve higher indicators aderence to it managerial and operational models, revised the definitions of these indicators, recalculating previous period, as already informed at the 12.31.2007 Report.
(*) Não revisado.
11
Exploration and Production - thousand barrels/day
The operational start-up of the FPSO-Cidade do Rio de Janeiro (Espadarte), Piranema (Piranema), Cidade de Vitória (Golfinho), P-52 and P-54 (Roncador) platforms offset the natural decline in production.
Output moved up over the 4Q-2007, due to the startup of FPSO Cidade de Vitória (Golfinho), P-52 and P-54 (both in Roncador), more than offsetting the natural slide in output.
Consolidated oil production fell year-on-year due to the natural decline in the mature fields in Argentina. Gas output remained virtually flat over the 1Q-2007.
The consolidated reduction in oil production over the previous quarter was also due to the natural decline in the mature fields in Argentina. Consolidated gas production moved up 2%, given the oil workers’ strike that reduced output from the Santa Cruz I e II wells in Argentina in the 4Q-2007.
12
Refining, Transportation and Supply – thousand barrels/day
Domestic processed crude volume dipped by 0.3% over the 1Q-2007 due to the March /08 programmed maintenance stoppage of Replan’s U-200A, one of Petrobras’ biggest atmospheric distillation units. Its last scheduled maintenance shut-down was in 2003.
Domestic processed crude edged down by 1% over the 4Q-2007, also due to the programmed maintenance stoppage of Replan’s distillation unit in March/08.
Processed crude in the overseas refineries fell 36% year-on-year in the 1Q-2008 due to the sale of the Bolivian refineries in June/07 and the stoppages in the Argentinean and US refineries in the 1Q-2008.
In relation to the previous quarter, total processed throughput in the overseas refineries dropped by 26%, due to the 1Q-2008 scheduled stoppages in the USA and Argentina.
Costs
Lifting Cost (US$/barrel)
Excluding the impact of the appreciation of the Real, the annual unit lifting cost in Brazil climbed by 8% year-on-year, due to the wage increase, the expansion of the workforce and the higher initial unit cost of the new production systems, which will gradually come down as production moves up.
Also excluding the impact of the appreciation of the Real, the unit lifting cost inched down by 1% over the 4Q-2007 due to the wage hike in the latter quarter, partially offset by higher expenditure in the 1Q-2008 on corrective and preventive maintenance and the programmed stoppages of the P-20 and PPM-1 platforms.
13
The year-on-year upturn in the first-quarter lifting cost was due to higher extraction costs, the impact of the increase in international oil prices on government participations, and the operational start-up of the P-34, FPSO-Cidade do Rio de Janeiro, FPSO-Cidade de Vitória, P-52 and P-54 platforms.
The increase over the 4Q-2007 was due to the upturn in the average Brazilian oil price used to calculate the government participations, based on the international price.
The year-on-year increase in the international lifting cost was caused by the higher price of outsourced services and materials in Argentina.
In comparison with the 4Q-2007, the unit lifting cost recorded a decline due to the reduction in expenses from outsourced services in Argentina caused by the lower number of well repairs in the first quarter.
14
Refining Costs (US$/barrel)
Excluding the impact of the appreciation of the Real, the domestic unit refining cost moved up 21% year-on-year due to increased operating expenses, reflecting the wage increase, the expansion of the workforce, the electricity tariff hike and the heightened complexity of the refineries as they adapt to environmental and market demands for higher quality products.
Also excluding the impact of the appreciation of the Real, the domestic unit refining cost fell 2% over the 4Q-2007 due to reduced expenses from outsourced maintenance services.
The average international unit refining cost moved up due to higher costs in the USA caused by the programmed stoppage in the Pasadena refinery, associated with the first-quarter slide in processed crude.
The average international unit refining cost recorded an upturn over the 4Q-2007 due to scheduled stoppages in the USA and Argentina and the lower volume of processed crude in the first quarter.
15
Corporate Overhead – Parent Company (US$ million)
The 22% year-on-year increase in corporate overhead was due to the increasing complexity of the Company’s operations. If we exclude the impact of the 18% appreciation of the Real, overhead moved up 4% due to higher expenses from data processing services, specialized technical and administrative-support services, advertising and unsubsidized sponsorships.
The 18% reduction over the 4Q-2007 was chiefly due to the actuarial review of the retirement plan and the healthcare provisions in January/08, and the higher concentration of expenses related to sports and arts sponsorships in the 4Q-2007, including those associated with the Rouanet Law and donations to the FIA (Children and Teenagers’ Fund).
Sales Volume – thousand barrels/day
Domestic sales volume moved up 8.10% over the 1Q-2007, led by diesel, aviation fuel and natural gas. The diesel increase was due to the improved performance of the economy and the increased use of emergency diesel-driven thermal plants, while aviation fuel sales were pushed by the expansion of tourism, leveraged by economic growth and the appreciation of the Real against the dollar. Gas sales increased by 33.62% due to higher industrial consumption as gas replaced fuel oil.
International volume fell 14.96% year-on-year due to lower trading company sales in the USA, the sale of the Bolivian refineries, and the reduction in oil and gas sales volume in Bolivia and to third parties in Argentina, caused by the natural decline in output from the mature fields, and in Ecuador, due to the lack of production and sales in March/08.
Export volume fell due to the shrinkage of the US market triggered by the economic crisis.
Domestic sales volume recorded a 2.25% slide over the 4Q-2007 due to the seasonal slowdown in diesel consumption, given the more intense agricultural activity in the final quarter of the year.
16
| Result by Business Area R$ million (1) (3) | ||||||||
| First Quarter | ||||||||
| 4Q-2007 | 2008 | 2007 | D % | |||||
| 8,072 | EXPLORATION & PRODUCTION | 9,430 | 5,083 | 86 | ||||
| 301 | SUPPLY | (566) | 2,126 | (127) | ||||
| (486) | GAS AND ENERGY | (396) | (316) | 25 | ||||
| 105 | DISTRIBUTION | 313 | 189 | 66 | ||||
| (940) | INTERNATIONAL (2) | 50 | (261) | (119) | ||||
| (1,363) | CORPORATE | (1,443) | (2,580) | (44) | ||||
| (636) | ELIMINATIONS AND ADJUSTMENTS | (463) | (110) | 321 | ||||
| 5,053 | CONSOLIDATED NET INCOME | 6,925 | 4,131 | 68 | ||||
(1) Comments on the results by business area begin on page 18 and their respective financial statements on page 28.
(2) In the international business segment, given that all operations are executed abroad, comparisons between the periods are influenced by foreign exchange variations in dollars or in the currency of those countries in which the companies in question are headquartered. As a result, there may be substantial variations in Reais, primarily arising from and reflecting changes in the exchange rate.
(3) Expenses from the creation of new jobs by Petrobras are now allocated in accordance with each employee’s area of activity and are no longer allocated in their entirety to corporate administrative expenses. In order to facilitate comparisons between the periods, we have adapted the previous financial statements to the new criteria.
17
RESULTS BY BUSINESS AREA
Petrobras is a company that operates in an integrated manner, with the greater part of oil and gas production in the Exploration and Production area being sold or transferred to other Company areas.
The main criteria used to report results per business area are as follows:
a) Net operating revenues: revenues from sales to external clients, plus intra-Company sales and transfers, using internal transfer prices established between the various areas as a benchmark, with assessment methodologies based on market parameters;
b) Operating income: net operating revenues, plus the cost of goods and services sold, which are reported per business area considering the internal transfer price and other operating costs for each area, plus the operating expenses effectively incurred by each area;
c) The entire financial result is allocated to the corporate group;
d) Assets: refers to the assets as identified by each area. Equity accounts of a financial nature are allocated to the corporate group.
Annual net income from Exploration and Production increased by 86% over the 1Q-2008 due to the increase in average domestic oil prices and the 1% upturn in daily oil and NGL production
Part of these effects were offset by higher expenses from government participations and the write-off of economically unviable wells.
The spread between the average domestic oil sale/transfer price and the average Brent price widened from US$ 9.96/bbl in the 1Q-2007 to US$ 10.77/bbl in the 1Q-2008
In comparison with the 4Q-2007, net income moved up 17% due to higher average domestic oil prices and the 2% increase in daily oil and NGL production, partially offset by higher prospecting expenses.
The spread between the average domestic oil sale/transfer price and the average Brent price fell from US$ 11.94/bbl in the 4Q-2007 to US$ 10.77/bbl in the 1Q-2008.
The reduction in the Supply result in the 1Q-2008 was due to the higher oil sale/transfer costs and the increase in oil product import costs, reflecting the behavior of international prices.
These effects were partially offset by the upturn in oil product prices in Brazil and abroad and the higher ratio of Brazilian crude in total processed crude.
18
The reduction over the 4Q-2007 was chiefly due to the increase in international oil prices and the seasonal reduction in sales volume.
These effects were partially offset by higher average oil product sale prices, and the sale, in the 1Q-2008, of inventories acquired at a lower cost in the previous quarter.
The first-quarter Gas and Energy result was reduced by R$ 253 million in contractual charges related to natural gas supply and tighter margins in the electricity business.
These effects were partially offset by the upturn in electricity and gas sales volume and higher average gas prices.
The 1Q-2008 result benefited from higher gas and electricity sales margins and the reduction in SG&A expenses.
These effects were partially offset by the increase in fines and contractual charges related to gas supply.
Net income from Distribution jumped by 66% year-on-year in the 1Q-2008, primarily due to the reduction in tax expenses due to the elimination of the tax CPMF and the ongoing efforts to reduce SG&A expenses, which only moved up by 6%, versus the 15% increase in sales volume.
The segment recorded a 35.9% share of the national fuel distribution market, versus 33.6% in the 1Q-2007.
19
Net income jumped by 198% over the previous quarter due to the recognition, in the 4Q-2007, of higher operating expenses, chiefly due to a review of the amounts involved in judicial proceedings, and the impact of the new jobs and salaries plan following the collective bargaining agreement.
These effects were partially offset by the seasonal reduction in sales volume.
The segment recorded a 35.9% share of the national fuel distribution market, versus 34.6% in the 4Q-2007.
The improvement in the International result in the 1Q-2008 was due to a R$ 67 million increase in gross profit, due to higher prices and the R$ 292 million reduction in prospection and drilling costs in Turkey, Angola, USA, Libya and Venezuela.
The quarter-over-quarter improvement was chiefly due to the R$ 538 million reduction in prospection and drilling costs, in turn mainly the result of lower write-offs of dry wells in the USA and Colombia, and R$ 401 million in impairment costs in Ecuador, USA and Angola in the 4Q-2007
The higher Corporate result in comparison with the 1Q-2007 was due to:
• The R$ 535 million reduction in net financial expenses, as detailed on page 7;
• The R$ 632 million reduction in expenses from the amendments to the Petros Plan regulations;
• The R$ 74 million reduction in tax expenses due to the extinction of the tax CPMF:
20
The quarter-over-quarter variation was due to the reduction in income tax and social contribution expenses, thanks to the provisioning of interest on equity in the 4Q-2007, which generated a fiscal benefit of R$ 671 million.
This was partially offset by the R$ 459 million reduction in net financial expenses, as detailed on page 9.
21
Consolidated Debt
| R$ million | ||||||
| 03.31.2008 | 12.31.2007 | D % | ||||
| Short-term Debt (1) | 7,639 | 8,960 | (15) | |||
| Long-term Debt (1) | 35,674 | 30,781 | 16 | |||
| Total | 43,313 | 39,741 | 9 | |||
| Cash / Cash Equivalents | 11,560 | 13,071 | (12) | |||
| Net Debt (2) | 31,753 | 26,670 | 19 | |||
| Net Debt/(Net Debt + Shareholder's Equity) (1) | 21% | 19% | 2 | |||
| Total Net Liabilities (1) (3) | 229,746 | 219,590 | 5 | |||
| Capital Structure | ||||||
| (Third Parties Net / Total Liabilities Net) | 47% | 48% | (1) | |||
| (1) |
Includes debt from leasing contracts (R$ 1,429 million on March 31, 2008 and R$ 1,433 million on December 31, 2007). |
| (2) |
Total debt less cash and cash equivalents. |
| (3) |
Total liabilities net of cash/financial investments. |
The net debt of the Petrobras System on March 31, 2008, was 19% higher than the amount recorded on December 31, 2007, due to the increase in financings, particularly from credit lines taken out to boost ethanol exports, and the raising of PifCo funds through sa Globall Note issue, as well as a reduction in cash and cash equivalents due to the payment of interest on equity.
The level of indebtedness, measured by the net debt/EBITDA ratio, increased from 0.53, on December 31, 2007, to 0.57 on March 31, 2008. The portion of the capital structure represented by third parties was 47%, 1 percentage point up on December 31, 2007.
22
Consolidated Investments
In compliance with the goals outlined in its strategic plan, Petrobras continues to prioritize investments in the expansion of its oil and natural gas production capacity by investing its own funds and by structuring ventures with strategic partners. On March 31, 2008, total investments amounted to R$ 10,197 million, 23% up on the total on March 31, 2007.
| R$ million | ||||||||||
| First Quarter | ||||||||||
| 2008 | % | 2007 | % | D % | ||||||
| • Own Investments | 8,430 | 83 | 7,385 | 88 | 14 | |||||
| Exploration & Production | 4,692 | 46 | 3,986 | 48 | 18 | |||||
| Supply | 1,790 | 18 | 1,040 | 12 | 72 | |||||
| Gas and Energy | 359 | 3 | 197 | 2 | 82 | |||||
| International | 1,335 | 13 | 1,922 | 23 | (31) | |||||
| Distribution | 95 | 1 | 107 | 1 | (11) | |||||
| Corporate | 159 | 2 | 133 | 2 | 20 | |||||
| • Special Purpose Companies (SPCs) | 1,448 | 14 | 861 | 11 | 68 | |||||
| • Ventures under Negotiation | 319 | 3 | 54 | 1 | 491 | |||||
| • Structured Projects | - | - | - | - | - | |||||
| Total Investments | 10,197 | 100 | 8,300 | 100 | 23 | |||||
| R$ million | ||||||||||
| First Quarter | ||||||||||
| 2008 | % | 2007 | % | D % | ||||||
| International | ||||||||||
| Exploration & Production | 1,138 | 85 | 1,737 | 90 | (34) | |||||
| Supply | 100 | 7 | 88 | 5 | 14 | |||||
| Gas and Energy | 42 | 3 | 49 | 2 | (14) | |||||
| Distribution | 3 | - | 15 | 1 | (80) | |||||
| Other | 52 | 5 | 33 | 2 | 58 | |||||
| Total Investments | 1,335 | 100 | 1,922 | 100 | (31) | |||||
| R$ million | ||||||||||
| First Quarter | ||||||||||
| 2008 | % | 2007 | % | D % | ||||||
| Projects Developed by SPCs | ||||||||||
| Gasene | 614 | 42 | 69 | 8 | 790 | |||||
| CDMPI | 226 | 16 | 37 | 4 | 511 | |||||
| PDET Off Shore | 155 | 11 | 77 | 9 | 101 | |||||
| Codajás | 142 | 10 | - | - | - | |||||
| Mexilhão | 121 | 8 | 90 | 11 | 34 | |||||
| Marlim Leste | 98 | 7 | 285 | 33 | (66) | |||||
| Malhas | 92 | 6 | 199 | 23 | (54) | |||||
| Amazônia | - | - | 104 | 12 | (100) | |||||
| Total Investments | 1,448 | 100 | 861 | 100 | 68 | |||||
In line with its strategic objectives, Petrobras acts in consortiums with other companies as a concessionaire of oil and natural gas exploration, development and production rights. Currently the Company is a member of 93 consortiums. These ventures will require total investments of around US$ 10,459 million by the end of the current year.
23
| PETROBRAS SYSTEM | Financial Statements | |
Income Statement – Consolidated
| R$ million | ||||||
| First Quarter | ||||||
| 4Q-2007 | 2008 | 2007 | ||||
| 57,922 | Gross Operating Revenues | 59,158 | 50,127 | |||
| (12,505) | Sales Deductions | (12,266) | (11,233) | |||
| 45,417 | Net Operating Revenues | 46,892 | 38,894 | |||
| (28,954) | (29,639) | (23,692) | ||||
| 16,463 | Gross profit | 17,253 | 15,202 | |||
| Operating Expenses | ||||||
| (1,567) | Sales | (1,592) | (1,415) | |||
| (1,830) | General and Administratives | (1,565) | (1,545) | |||
| (1,070) | Cost of Prospecting, Drilling & Lifting | (685) | (655) | |||
| (446) | Losses on recovery of assets | - | - | |||
| (492) | Research & Development | (417) | (382) | |||
| (305) | Taxes | (149) | (299) | |||
| (442) | Pension and Health Plan | (356) | (453) | |||
| (1,112) | Other | (1,145) | (1,886) | |||
| 7,264 | (5,909) | (6,635) | ||||
| Net Financial Expenses | ||||||
| 806 | Income | 705 | 684 | |||
| (920) | Expenses | (814) | (883) | |||
| (1,603) | Monetary & FX Correction - Assets | (211) | (1,870) | |||
| 858 | Monetary & FX Correction - Liabilities | (80) | 1,134 | |||
| (859) | (400) | (935) | ||||
| (8,123) | (6,309) | (7,570) | ||||
| (291) | Gains from Investments in Subsidiaries | 12 | (84) | |||
| 8,049 | Operating Profit | 10,956 | 7,548 | |||
| (350) | Non-operating Income (Expenses) | (12) | 27 | |||
| (2,358) | Income Tax & Social Contribution | (3,971) | (2,968) | |||
| (288) | Minority Interest | (48) | (476) | |||
| 5,053 | Net Income | 6,925 | 4,131 | |||
Certain figures relating to previous periods have been reclassified to bring them into line with the current financial statements, thereby facilitating comparisons.
24
Balance Sheet – Consolidated
| Assets | R$ million | |||
| 03.31.2008 | 12.31.2007 | |||
| Assets | 55,298 | 53,374 | ||
| Cash and Cash Equivalents | 11,560 | 13,071 | ||
| Accounts Receivable | 12,946 | 11,329 | ||
| Inventories | 19,395 | 17,599 | ||
| Marketable Securities | 268 | 590 | ||
| Taxes Recoverable | 8,169 | 7,782 | ||
| Other | 2,960 | 3,003 | ||
| Non Current Assets | 184,578 | 177,854 | ||
| Long-term Assets | 21,260 | 22,023 | ||
| Petroleum & Alcohol Account | 799 | 798 | ||
| Advances to Suppliers | 421 | 397 | ||
| Marketable Securities | 3,730 | 3,922 | ||
| Deferred Taxes and Social Contribution | 8,180 | 8,333 | ||
| Advance for Pension Plan Migration | 1,336 | 1,297 | ||
| Prepaid Expenses | 1,480 | 1,514 | ||
| Accounts Receivable | 2,529 | 2,902 | ||
| Deposits - Legal Matters | 1,728 | 1,693 | ||
| Other | 1,057 | 1,167 | ||
| Investments | 7,841 | 7,822 | ||
| Fixed Assets | 146,983 | 139,941 | ||
| Intangible | 5,737 | 5,532 | ||
| Deferred | 2,757 | 2,536 | ||
| Total Assets | 239,876 | 231,228 | ||
| Liabilities | R$ million | |||
| 03.31.2008 | 12.31.2007 | |||
| Current Liabilities | 42,338 | 47,555 | ||
| Short-term Debt | 7,199 | 8,501 | ||
| Suppliers | 14,609 | 13,791 | ||
| Taxes and Social Contribution Payable | 10,207 | 10,006 | ||
| Project Finance and Joint Ventures | 147 | 41 | ||
| Pension Fund Obligations | 880 | 880 | ||
| Dividends | 2,091 | 6,581 | ||
| Salaries, Benefits and Charges | 1,669 | 1,689 | ||
| Other | 5,536 | 6,066 | ||
| Non Current Liabilities | 68,729 | 62,121 | ||
| Long-term Debt | 34,685 | 29,807 | ||
| Pension and Health Plan Obligations | 4,565 | 4,520 | ||
| Health Care Benefits | 9,558 | 9,272 | ||
| Deferred Taxes and Social Contribution | 11,573 | 10,353 | ||
| Other | 8,348 | 8,169 | ||
| Deferred Income | 1,734 | 1,392 | ||
| Minority interest | 6,240 | 6,306 | ||
| Shareholders’ Equity | 120,835 | 113,854 | ||
| Capital Stock | 52,644 | 52,644 | ||
| Reserves | 61,266 | 61,210 | ||
| Net Income | 6,925 | - | ||
| Total Liabilities | 239,876 | 231,228 | ||
Certain figures relating to previous periods have been reclassified to bring them into line with the current financial statements, thereby facilitating comparisons.
25
Statement of Cash Flow - Consolidated
| R$ million | ||||||
| First Quarter | ||||||
| 4Q-2007 | 2008 | 2007 | ||||
| 5,053 | Net Income | 6,925 | 4,131 | |||
| 6,303 | (+) Adjustments | 2,846 | 3,562 | |||
| 2,842 | Depreciation & Amortization | 2,532 | 2,411 | |||
| (211) | Charges on Financing and Connected Companies | 714 | (676) | |||
| 288 | Minority interest | 48 | 476 | |||
| 291 | Result of Participation in Material Investments | (12) | 84 | |||
| 1,326 | Foreign Exchange on Fixed Assets | 485 | 1,749 | |||
| (25) | Deferred Income Tax and Social Contribution | 737 | 106 | |||
| (88) | Inventory Variation | (1,796) | 876 | |||
| 1,741 | Supplier Variation | 822 | (1,895) | |||
| 552 | Pension and Health Plan Variation | 330 | 548 | |||
| (413) | Other | (1,014) | (117) | |||
| 11,356 | (=) Net Cash Generated by Operating Activities | 9,771 | 7,693 | |||
| (13,916) | (-) Cash used for Cap.Expend. | (10,070) | (8,151) | |||
| (5,348) | Investment in E&P | (5,341) | (4,364) | |||
| (4,411) | Investment in Refining & Transport | (2,380) | (1,102) | |||
| (2,014) | Investment in Gas and Energy | (1,436) | (704) | |||
| (559) | Investment in Distribution | (82) | (104) | |||
| (1,327) | Investment in International Segment | (1,197) | (1,526) | |||
| (139) | Marketable Securities | 514 | (200) | |||
| (12) | Dividends | 37 | 86 | |||
| (106) | Other investments | (185) | (237) | |||
| (2,560) | (=) Free cash flow | (299) | (458) | |||
| 1,415 | (-) Cash used in Financing Activities | (1,212) | (6,908) | |||
| 1,417 | Financing | 2,862 | (1,035) | |||
| (2) | Dividends | (4,074) | (5,873) | |||
| (1,145) | (=) Net cash generated in the period | (1,511) | (7,366) | |||
| 14,216 | Cash at the Beginning of Period | 13,071 | 27,829 | |||
| 13,071 | Cash at the End of Period | 11,560 | 20,463 | |||
Certain figures relating to previous periods have been reclassified to bring them into line with the current financial statements, thereby facilitating comparisons.
26
Statement of Value Added – Consolidated
| R$ million | ||||
| First Quarter | ||||
| 2008 | 2007 | |||
| Description | ||||
| Sales of Products and Services and Non-Operating Revenues* | 59,610 | 50,687 | ||
| Raw Materials Used | (6,966) | (5,576) | ||
| Products for Resale | (13,453) | (7,949) | ||
| Materials, Energy, Services & Other | (4,891) | (7,124) | ||
| Added Value Generated | 34,300 | 30,038 | ||
| Depreciation & Amortization | (2,532) | (2,411) | ||
| Participation in Equity Income, Goodwill & Negative Goodwill | 12 | (84) | ||
| Financial Result | 705 | 669 | ||
| Rent and Royalties | 149 | 126 | ||
| Total Distributable Added Value | 32,634 | 28,338 | ||
| Distribution of Added Value | ||||
| Personnel | ||||
| Salaries, Benefits and Charges | 2,656 | 3,569 | ||
| 2,656 | 3,569 | |||
| Government Entities | ||||
| Taxes, Fees and Contributions | 14,857 | 13,170 | ||
| Government Take | 5,003 | 3,468 | ||
| 19,860 | 16,638 | |||
| Financial Institutions and Suppliers | ||||
| Interest, FX Rate and Monetary Changes | 1,105 | 1,620 | ||
| Rent and Freight Expenses | 2,040 | 1,904 | ||
| 3,145 | 3,524 | |||
| Shareholders | ||||
| Minority Interest | 48 | 476 | ||
| Retained Earnings | 6,925 | 4,131 | ||
| 6,973 | 4,607 | |||
| Distributed Added Value | 32,634 | 28,338 | ||
* Net of Provisions for Doubtful Debts.
27
Consolidated Result by Business Area - 1Q/2008
| R$ MILLION | ||||||||||||||||
| GAS | ||||||||||||||||
| & | ||||||||||||||||
| E&P | SUPPLY | ENERGY | DISTRIB. | INTERN. | CORPOR. | ELIMIN. | TOTAL | |||||||||
| INCOME STATEMENTS | ||||||||||||||||
| Net Operating Revenues | 25,010 | 37,526 | 3,365 | 12,487 | 4,471 | - | (35,967) | 46,892 | ||||||||
| Intersegments | 24,692 | 10,199 | 424 | 200 | 452 | - | (35,967) | - | ||||||||
| Third Parties | 318 | 27,327 | 2,941 | 12,287 | 4,019 | - | - | 46,892 | ||||||||
| Cost of Goods Sold | (9,505) | (37,133) | (3,161) | (11,389) | (3,659) | - | 35,208 | (29,639) | ||||||||
| Gross Profit | 15,505 | 393 | 204 | 1,098 | 812 | - | (759) | 17,253 | ||||||||
| Operating Expenses | (1,009) | (1,296) | (706) | (628) | (646) | (1,683) | 59 | (5,909) | ||||||||
| Sales, General & Administrative | (129) | (1,100) | (249) | (626) | (347) | (764) | 58 | (3,157) | ||||||||
| Taxes | (15) | (32) | (9) | (1) | (24) | (68) | - | (149) | ||||||||
| Exploratory Costs | (538) | - | - | - | (147) | - | - | (685) | ||||||||
| Research & Development | (213) | (82) | (31) | (3) | (1) | (87) | - | (417) | ||||||||
| Health and Pension Plans | - | - | - | - | - | (356) | - | (356) | ||||||||
| Other | (114) | (82) | (417) | 2 | (127) | (408) | 1 | (1,145) | ||||||||
| Operating Profit (Loss) | 14,496 | (903) | (502) | 470 | 166 | (1,683) | (700) | 11,344 | ||||||||
| Interest Income (Expenses) | - | - | - | - | - | (400) | - | (400) | ||||||||
| Participation in Equity Income | - | 1 | (26) | 3 | 47 | (13) | - | 12 | ||||||||
| Non-operating Income (Expenses) | (7) | (4) | (1) | - | (3) | 3 | - | (12) | ||||||||
| Income (Loss) Before Taxes and Minority Interests | 14,489 | (906) | (529) | 473 | 210 | (2,093) | (700) | 10,944 | ||||||||
| Income Tax & Social Contribution | (4,926) | 309 | 171 | (160) | (102) | 500 | 237 | (3,971) | ||||||||
| Minority Interests | (133) | 31 | (38) | - | (58) | 150 | - | (48) | ||||||||
| Net Income (Loss) | 9,430 | (566) | (396) | 313 | 50 | (1,443) | (463) | 6,925 | ||||||||
Consolidated Result by Business Area - 1Q/2007
| R$ MILLION | ||||||||||||||||
| GAS | ||||||||||||||||
| & | ||||||||||||||||
| E&P | SUPPLY | ENERGY | DISTRIB. | INTERN. | CORPOR. | ELIMIN. | TOTAL | |||||||||
| INCOME STATEMENTS | ||||||||||||||||
| Net Operating Revenues | 16,966 | 29,690 | 2,146 | 10,223 | 4,671 | - | (24,802) | 38,894 | ||||||||
| Intersegments | 15,376 | 8,023 | 553 | 182 | 668 | - | (24,802) | - | ||||||||
| Third Parties | 1,590 | 21,667 | 1,593 | 10,041 | 4,003 | - | - | 38,894 | ||||||||
| Cost of Goods Sold | (7,938) | (25,248) | (1,925) | (9,252) | (3,926) | - | 24,597 | (23,692) | ||||||||
| Gross Profit | 9,028 | 4,442 | 221 | 971 | 745 | - | (205) | 15,202 | ||||||||
| Operating Expenses | (972) | (1,260) | (526) | (678) | (901) | (2,336) | 38 | (6,635) | ||||||||
| Sales, General & Administrative | (173) | (898) | (261) | (593) | (386) | (688) | 39 | (2,960) | ||||||||
| Taxes | (12) | (42) | (26) | (49) | (28) | (142) | - | (299) | ||||||||
| Exploratory Costs | (216) | - | - | - | (439) | - | - | (655) | ||||||||
| Research & Development | (187) | (71) | (40) | (3) | (1) | (80) | - | (382) | ||||||||
| Health and Pension Plan | - | - | - | - | - | (453) | - | (453) | ||||||||
| Other | (384) | (249) | (199) | (33) | (47) | (973) | (1) | (1,886) | ||||||||
| Operating Profit (Loss) | 8,056 | 3,182 | (305) | 293 | (156) | (2,336) | (167) | 8,567 | ||||||||
| Interest Income (Expenses) | - | - | - | - | - | (935) | - | (935) | ||||||||
| Equity Income | - | 42 | 6 | (4) | 9 | (137) | - | (84) | ||||||||
| Non-operating Income (Expense) | (3) | 7 | 3 | - | 23 | (3) | - | 27 | ||||||||
| Income (Loss) Before Taxes and Minority Interests | 8,053 | 3,231 | (296) | 289 | (124) | (3,411) | (167) | 7,575 | ||||||||
| Income Tax & Social Contribution | (2,738) | (1,084) | 102 | (100) | (66) | 861 | 57 | (2,968) | ||||||||
| Minority Interests | (232) | (21) | (122) | - | (71) | (30) | - | (476) | ||||||||
| Net Income (Loss) | 5,083 | 2,126 | (316) | 189 | (261) | (2,580) | (110) | 4,131 | ||||||||
Part of the expenses associated with idle thermoelectric plants were allocated to COGS, given that such expenses are linked to energy sales which are in turn tied to the capacity available for sale, independently of the volume effectively generated.
In order to unify the criterion for the allocation of safety, health and environmental expenses, we opted to allocate these expenses in their entirety to other operating income (expenses).
Expenditure related to the training of new Petrobras employees is now allocated in line with the area of each employee and is no longer wholly allocated to corporate administrative expenses.
In order to maintain comparability between the periods, we are presenting the previous statements in accordance with the new criteria above.
28
EBITDA(1) Consolidated Statement by Business Area - 1Q/2008
| R$ MILLION | ||||||||||||||||
| GAS | ||||||||||||||||
| & | ||||||||||||||||
| E&P | SUPPLY | ENERGY | DISTRIB. | INTERN. | CORPOR. | ELIMIN. | TOTAL | |||||||||
| Operating Profit (Loss) (2) | 14,496 | (903) | (502) | 470 | 166 | (1,683) | (700) | 11,344 | ||||||||
| Depreciation & Amortization | 1,387 | 530 | 207 | 90 | 278 | 40 | - | 2,532 | ||||||||
| EBITDA (1) | 15,883 | (373) | (295) | 560 | 444 | (1,643) | (700) | 13,876 | ||||||||
(1) Operating income before the financial results and equity income + depreciation /amortization.
(2) Adjusted for Profit Sharing Program.
Statement of Other Operating Revenues (Expenses) - 1Q/2008
| R$ MILLION | ||||||||||||||||
| GAS | ||||||||||||||||
| & | ||||||||||||||||
| E&P | SUPPLY | ENERGY | DISTRIB. | INTERN. | CORPOR. | ELIMIN. | TOTAL | |||||||||
| Institutional relations and cultural projects | (21) | (16) | - | (9) | - | (233) | - | (279) | ||||||||
| Fines and Contractual Charges | - | - | (253) | - | - | - | - | (253) | ||||||||
| Operating expenses with thermoelectric | - | - | (161) | - | - | - | - | (161) | ||||||||
| Losses and Contingencies related to Legal Proceedings | (9) | (7) | - | (1) | (126) | (10) | - | (153) | ||||||||
| HSE Expenses | (6) | (17) | (1) | - | - | (55) | - | (79) | ||||||||
| Unscheduled stoppages at installations and production equipment | (22) | (31) | - | - | - | - | - | (53) | ||||||||
| Contractual losses from ship-or-pay transport services | - | - | - | - | (21) | - | - | (21) | ||||||||
| Other | (56) | (11) | (2) | 12 | 20 | (110) | 1 | (146) | ||||||||
| (114) | (82) | (417) | 2 | (127) | (408) | 1 | (1,145) | |||||||||
Statement of Other Operating Revenues (Expenses) - 1Q/2007
| R$ MILLION | ||||||||||||||||
| GAS | ||||||||||||||||
| & | ||||||||||||||||
| E&P | SUPPLY | ENERGY | DISTRIB. | INTERN. | CORPOR. | ELIMIN. | TOTAL | |||||||||
| Institutional relations and cultural projects | (21) | (15) | - | (7) | - | (247) | - | (290) | ||||||||
| Operating expenses with thermoelectric | - | - | (165) | - | - | - | - | (165) | ||||||||
| Losses and Contingencies related to Legal Proceedings | (6) | (12) | - | 1 | (2) | 9 | - | (10) | ||||||||
| HSE Expenses | (7) | (22) | (1) | - | - | (65) | - | (95) | ||||||||
| Unscheduled stoppages at installations and production equipment | (19) | (41) | - | - | - | - | - | (60) | ||||||||
| Contractual losses from ship-or-pay transport services | - | - | - | - | (15) | - | - | (15) | ||||||||
| Expenses with Renegotiation of Petros Fund Plan | (220) | (129) | (11) | (40) | (8) | (632) | - | (1,040) | ||||||||
| Other | (111) | (30) | (22) | 13 | (22) | (38) | (1) | (211) | ||||||||
| (384) | (249) | (199) | (33) | (47) | (973) | (1) | (1,886) | |||||||||
Part of the expenses associated with idle thermoelectric plants were allocated to COGS, given that such expenses are linked to energy sales which are in turn tied to the capacity available for sale, independently of the volume effectively generated.
In order to unify the criterion for the allocation of safety, health and environmental expenses, we opted to allocate these expenses in their entirety to other operating income (expenses).
In order to maintain comparability between the periods, we are presenting the previous statements in accordance with the new criteria above.
29
Consolidated Assets by Business Area - 03.31.2008
| R$ MILLION | ||||||||||||||||
| GAS | ||||||||||||||||
| & | ||||||||||||||||
| E&P | SUPPLY | ENERGY | DISTRIB. | INTERN. | CORPOR. | ELIMIN. | TOTAL | |||||||||
| ASSETS | 94,007 | 58,813 | 30,388 | 9,970 | 23,010 | 34,202 | (10,514) | 239,876 | ||||||||
| CURRENT ASSETS | 6,265 | 26,364 | 5,409 | 5,223 | 4,198 | 17,963 | (10,124) | 55,298 | ||||||||
| CASH AND CASH EQUIVALENTS | - | - | - | - | - | 11,560 | - | 11,560 | ||||||||
| OTHER | 6,265 | 26,364 | 5,409 | 5,223 | 4,198 | 6,403 | (10,124) | 43,738 | ||||||||
| NON-CURRENT ASSETS | 87,742 | 32,449 | 24,979 | 4,747 | 18,812 | 16,239 | (390) | 184,578 | ||||||||
| LONG-TERM ASSETS | 3,606 | 1,138 | 2,154 | 506 | 1,027 | 13,197 | (368) | 21,260 | ||||||||
| PROPERTY, PLANTS AND EQUIPMENT | 80,627 | 26,973 | 21,755 | 2,801 | 13,116 | 1,733 | (22) | 146,983 | ||||||||
| OTHER | 3,509 | 4,338 | 1,070 | 1,440 | 4,669 | 1,309 | - | 16,335 | ||||||||
Consolidated Assets by Business Area - 12.31.2007
| R$ MILLION | ||||||||||||||||
| GAS | ||||||||||||||||
| & | ||||||||||||||||
| E&P | SUPPLY | ENERGY | DISTRIB. | INTERN. | CORPOR. | ELIMIN. | TOTAL | |||||||||
| ASSETS | 89,256 | 55,253 | 27,942 | 9,890 | 22,406 | 36,409 | (9,928) | 231,228 | ||||||||
| CURRENT ASSETS | 5,174 | 24,390 | 4,423 | 4,946 | 4,212 | 20,050 | (9,821) | 53,374 | ||||||||
| CASH AND CASH EQUIVALENTS | - | - | - | - | - | 13,071 | - | 13,071 | ||||||||
| OTHER | 5,174 | 24,390 | 4,423 | 4,946 | 4,212 | 6,979 | (9,821) | 40,303 | ||||||||
| NON-CURRENT ASSETS | 84,082 | 30,863 | 23,519 | 4,944 | 18,194 | 16,359 | (107) | 177,854 | ||||||||
| LONG-TERM ASSETS | 4,046 | 1,335 | 1,841 | 702 | 1,088 | 13,101 | (90) | 22,023 | ||||||||
| PROPERTY, PLANTS AND EQUIPMENT | 76,611 | 25,226 | 20,753 | 2,793 | 12,664 | 1,911 | (17) | 139,941 | ||||||||
| OTHER | 3,425 | 4,302 | 925 | 1,449 | 4,442 | 1,347 | - | 15,890 | ||||||||
30
Consolidated Results – International Business Area - 1Q/2008
| R$ MILLION | ||||||||||||||
| INTERNATIONAL | ||||||||||||||
| GAS | ||||||||||||||
| & | ||||||||||||||
| E&P | SUPPLY | ENERGY | DISTR. | CORPOR. | ELIMIN. | TOTAL | ||||||||
| INTERNATIONAL AREA | ||||||||||||||
| ASSETS (03.31.2008) | 15,949 | 4,835 | 2,430 | 713 | 3,050 | (3,967) | 23,010 | |||||||
| Income Statement (1) - 1Q/2008 | ||||||||||||||
| Net Operating Revenues | 1,117 | 2,775 | 485 | 1,056 | 1 | (963) | 4,471 | |||||||
| Intersegments | 628 | 655 | 117 | 15 | - | (963) | 452 | |||||||
| Third Parties | 489 | 2,120 | 368 | 1,041 | 1 | - | 4,019 | |||||||
| Operating Profit (Loss) | 239 | (5) | 143 | (45) | (119) | (47) | 166 | |||||||
| Net Income (Loss) | 116 | 20 | 81 | (35) | (85) | (47) | 50 | |||||||
Consolidated Results – International Business Area
| R$ MILLION | ||||||||||||||
| INTERNATIONAL | ||||||||||||||
| GAS | ||||||||||||||
| & | ||||||||||||||
| E&P | SUPPLY | ENERGY | DISTR. | CORPOR. | ELIMIN. | TOTAL | ||||||||
| INTERNATIONAL AREA | ||||||||||||||
| ASSETS (12.31.2007) | 14,987 | 4,636 | 2,378 | 819 | 2,543 | (2,957) | 22,406 | |||||||
| Income Statement - 1Q 2007 | ||||||||||||||
| Net Operating Revenues | 1,211 | 2,975 | 634 | 890 | 15 | (1,054) | 4,671 | |||||||
| Intersegments | 914 | 706 | 99 | 3 | - | (1,054) | 668 | |||||||
| Third Parties | 297 | 2,269 | 535 | 887 | 15 | - | 4,003 | |||||||
| Operating Profit (Loss) | (153) | (74) | 195 | 21 | (169) | 24 | (156) | |||||||
| Net Income (Loss) | (239) | (38) | 144 | 17 | (169) | 24 | (261) | |||||||
(1) Expenditure related to the training of new Petrobras employees is now allocated in line with the area of each employee and is no longer wholly allocated to corporate administrative expenses. In order to maintain comparability between the periods, we are presenting the previous statements in accordance with the new criteria above.
31
| PETROBRAS SYSTEM | Appendices | |
1. Petroleum and Ethanol Accounts – National Treasury
In order to settle the accounts with the federal government, in accordance with Provisional Measure No. 2181 of August 24, 2001, Petrobras, after having submitted all the information required by the National Treasury (STN), is seeking to reconcile the differences between the parties which comprise alleged debts arising from loan operations involving the extinct Interbras.
In November 2007, as part of the ongoing negotiations with the STN, Petrobras one again officially stated its understanding that these debts were never owed by Interbras, requested the issue of securities to settle the balance of the Petroleum and Ethanol Accounts and their possible use to pay Petrobras’ actuarial debts with Petros.
The account balance of R$ 799 million on March 31, 2008 (R$ 798 million in 2007) may be paid by the federal government through the issuance of National Treasury bonds, in an amount equal to the final settlement amount or with other amounts that Petrobras may owe to the federal government, including those related to taxes, or through a combination of these options.
2. Consolidated Taxes and Contributions
The economic contribution of Petrobras to the country, measured through the generation of current taxes, duties and social contributions, totaled R$ 14,005 million.
| R$ million | ||||||||||||||
| First Quarter | ||||||||||||||
| 4Q-2007 | 2008 | 2007 | D % | |||||||||||
| Economic Contribution - Country | ||||||||||||||
| 4,630 | Value Added Tax (ICMS) | 4,550 | 4,132 | 10 | ||||||||||
| 2,021 | CIDE (1) | 1,944 | 1,853 | 5 | ||||||||||
| 3,159 | PASEP/COFINS | 3,046 | 2,749 | 11 | ||||||||||
| 2,241 | Income Tax & Social Contribution | 3,888 | 2,892 | 34 | ||||||||||
| 819 | Other | 577 | 656 | (12) | ||||||||||
| 12,870 | Subtotal Country | 14,005 | 12,282 | 14 | ||||||||||
| 833 | Economic Contribution - Foreign | 852 | 888 | (4) | ||||||||||
| 13,703 | Total | 14,857 | 13,170 | 13 | ||||||||||
32
3. Government Participations
| R$ million | ||||||||
| First Quarter | ||||||||
| 4Q-2007 | 2008 | 2007 | D % | |||||
| Country | ||||||||
| 2,182 | Royalties | 2,397 | 1,627 | 47 | ||||
| 2,150 | Special Participation | 2,430 | 1,509 | 61 | ||||
| 33 | Surface Rental Fees | 30 | 33 | (9) | ||||
| 4,365 | Subtotal Country | 4,857 | 3,169 | 53 | ||||
| 197 | Foreign | 146 | 299 | (51) | ||||
| 4,562 | Total | 5,003 | 3,468 | 44 | ||||
Government participations in the country increased by 53% year-on-year, due to the 42% upturn in the reference price for local oil, which averaged R$ 139.57 (US$ 80.45) in the 1Q-2008, versus R$ 98.20 (US$ 46.62) in the 1Q-2007, reflecting the average Brent price on the international market, and the increase in output, chiefly due to the operational start-up of the P-34 (Jubarte), FPSO-Cidade do RJ (Espadarte), FPSO-Cidade de Vitória (Golfinho), P-52 (Roncador) and P-54 (Roncador) platforms, offsetting the natural decline in production
In comparison with the 4Q-2007, government participations in the country moved up 11%, due to the 5% upturn in the reference price for local oil which averaged R$ 139.57 (US$ 80,45) in the 1Q-2008, versus R$ 133.54 (US$ 74.84) in the 4Q-2007, reflecting the average Brent price on the international market, plus increased output from the recently installed platforms in the Golfinho and Roncador fields.
4. Reconciliation of Consolidated Shareholders’ Equity and Net Income
| R$ million | ||||
| Shareholders' Equity | Result | |||
| . According to Petrobras information as of March 31, 2008 | 122,763 | 6,751 | ||
| . Profit in the sales of products in affiliated inventories | (503) | (503) | ||
| . Reversal of profits on inventory in previous years | - | 667 | ||
| . Capitalized interest | (867) | (13) | ||
| . Absorption of negative net worth in affiliated companies * | (104) | (92) | ||
| . Other eliminations | (454) | 115 | ||
| . According to consolidated information as of March 31, 2008 | 120,835 | 6,925 | ||
* Pursuant to CVM Instruction 247/96, losses considered temporary on investments evaluated by the equity method, where the investee shows no signs of stoppage or the need for financial support from the investor, must be limited to the amount of the controlling company’s investment. Thus losses generated by unfunded liabilities (negative shareholders’ equity) of the controlled companies did not affect the results or shareholders’ equity of Petrobras on March 31, 2007, generating a conciliatory item between the Financial Statements of Petrobras and the Consolidated Financial Statements.
5. Performance of Petrobras Shares and ADRs
| Nominal Change | ||||||
| First Quarter | ||||||
| 4Q-2007 | 2008 | 2007 | ||||
| 51.52% | Petrobras ON | -14.60% | -5.05% | |||
| 49.32% | Petrobras PN | -16.30% | -7.35% | |||
| 52.64% | ADR- Nível III - ON | -11.39% | -3.38% | |||
| 48.72% | ADR- Nível III - PN | -11.98% | -3.68% | |||
| 5.66% | IBOVESPA | -4.57% | 2.99% | |||
| -4.54% | DOW JONES | -7.55% | -0.87% | |||
| -1.82% | NASDAQ | -14.07% | 0.26% | |||
Petrobras’ shares had a book value of R$ 27.98 on March 31, 2008.
33
6. Foreign Exchange Exposure
| Assets | R$ million | |||
| 03.31.2008 | 12.31.2007 | |||
| Current Assets | 8,334 | 9,368 | ||
| Cash and Cash Equivalents | 4,049 | 4,037 | ||
| Other Current Assets | 4,285 | 5,331 | ||
| Non-current Assets | 18,626 | 21,178 | ||
| Amounts invested abroad via | ||||
| partner companies, in the international segment, | ||||
| in E&P equipments to be used in Brazil and in | ||||
| commercial activities. | 17,618 | 20,362 | ||
| Other Long-term Assets | 554 | 480 | ||
| Investments | ||||
| Property, plant and equipment | 454 | 336 | ||
| Total Assets | 26,960 | 30,546 | ||
| Liabilities | R$ million | |||
| 03.31.2008 | 12.31.2007 | |||
| Current Liabilities | (4,859) | (7,601) | ||
| Short-term Debt | (2,435) | (3,183) | ||
| Suppliers | (1,792) | (2,122) | ||
| Other Current Liabilities | (632) | (2,296) | ||
| Long-term Liabilities | (14,124) | (12,199) | ||
| Long-term Debt | (13,024) | (11,062) | ||
| Other Long-term Liabilities | (1,100) | (1,137) | ||
| Total Liabilities | (18,983) | (19,800) | ||
| Net Assets (Liabilities) in Reais | 7,977 | 10,746 | ||
| (+) Investment Funds - Exchange | 20 | 41 | ||
| (-) FINAME Loans - dollar-indexed reais | (355) | (339) | ||
| Net Assets (Liabilities) in Reais | 7,642 | 10,448 | ||
* The results of investments in Exchange Funds are booked under Financial Revenue.
34
| PETROBRAS SYSTEM | Financial Statements | |
Income Statement – Parent Company
| R$ million | ||||||
| First Quarter | ||||||
| 4Q-2007 | 2008 | 2007 | ||||
| 46,365 | Gross Operating Revenues | 44,861 | 37,986 | |||
| (11,450) | Sales Deductions | (11,053) | (10,118) | |||
| 34,915 | Net Operating Revenues | 33,808 | 27,868 | |||
| (20,712) | Cost of Products Sold | (19,655) | (15,282) | |||
| 14,203 | Gross Profit | 14,153 | 12,586 | |||
| Operating Expenses | ||||||
| (1,337) | Sales | (1,486) | (1,257) | |||
| (1,310) | General & Administrative | (1,092) | (1,036) | |||
| (387) | Exploratory Costs | (538) | (216) | |||
| (45) | Impairment | - | - | |||
| (489) | Research & Development | (413) | (380) | |||
| (183) | Taxes | (90) | (155) | |||
| (424) | Health and Pension Plans | (336) | (423) | |||
| (925) | Other | (1,106) | (1,804) | |||
| (5,100) | (5,061) | (5,271) | ||||
| Net Financial | ||||||
| 1,408 | Income | 1,361 | 986 | |||
| (898) | Expense | (934) | (589) | |||
| (1,917) | Monetary & Foreign Exchange Variation - Assets | (541) | (2,112) | |||
| 786 | Monetary & Foreign Exchange Variation - Liabilities | 259 | 1,140 | |||
| (621) | 145 | (575) | ||||
| (5,721) | (4,916) | (5,846) | ||||
| (968) | Equity Results | 798 | 52 | |||
| 7,514 | Operating Income | 10,035 | 6,792 | |||
| (291) | Non-operating Income (Expense) | 1 | (1) | |||
| (2,054) | Income Tax / Social Contribution | (3,285) | (2,455) | |||
| 5,169 | Net Income | 6,751 | 4,336 | |||
Certain figures relating to previous periods have been reclassified to bring them into line with the current financial statements, thereby facilitating comparisons.
35
Balance Sheet – Parent Company
| Assets | R$ million | |||
| 03.31.2008 | 12.31.2007 | |||
| Current Assets | 51,030 | 40,154 | ||
| Cash and Cash Equivalents | 15,088 | 7,848 | ||
| Accounts Receivable | 12,618 | 12,036 | ||
| Inventories | 15,354 | 12,800 | ||
| Dividends Receivable | 478 | 669 | ||
| Deferred Taxes & Social Contribution | 5,614 | 5,125 | ||
| Other | 1,878 | 1,676 | ||
| Non Current Assets | 180,369 | 171,079 | ||
| Long-term Assets | 66,906 | 63,949 | ||
| Petroleum & Alcohol Account | 799 | 798 | ||
| Subsidiaries and affiliated companies | 50,230 | 47,556 | ||
| Ventures under Negotiation | 1,824 | 1,504 | ||
| Advances to Suppliers | 377 | 397 | ||
| Marketable Securities | 3,419 | 3,387 | ||
| Advance for Pension Plan Migration | 1,336 | 1,297 | ||
| Deferred Taxes and Social Contribution | 5,550 | 5,557 | ||
| Judicial Deposits | 1,466 | 1,446 | ||
| Antecipated Expenses | 723 | 809 | ||
| Other | 1,182 | 1,198 | ||
| Investments | 27,940 | 26,069 | ||
| Property, plant and equipment | 81,690 | 77,252 | ||
| Intangible | 3,079 | 3,075 | ||
| Deferred | 754 | 734 | ||
| Total Assets | 231,399 | 211,233 | ||
| Liabilities | R$ million | |||
| 03.31.2008 | 12.31.2007 | |||
| Current Liabilities | 71,668 | 60,386 | ||
| Short-term Debt | 757 | 749 | ||
| Suppliers | 43,073 | 36,457 | ||
| Taxes & Social Contribution Payable | 8,561 | 8,493 | ||
| Dividends / Interest on Own Capital | 2,091 | 6,581 | ||
| Project Finance and Joint Ventures | 472 | 408 | ||
| Health and Pension Plan | 816 | 816 | ||
| Clients Anticipation | 163 | 120 | ||
| Receivable Cash Flow | 11,134 | 1,978 | ||
| Other | 4,601 | 4,784 | ||
| Long-term Liabilities | 36,710 | 34,835 | ||
| Long-term Debt | 6,024 | 4,812 | ||
| Subsidiaries and affiliated companies | 1,676 | 2,374 | ||
| Pension plan | 4,169 | 4,139 | ||
| Health plan | 8,819 | 8,554 | ||
| Deferred Taxes & Social Contribution | 9,464 | 8,434 | ||
| Provision for area abandonment | 5,919 | 5,854 | ||
| Other | 639 | 668 | ||
| Deferred Income | 258 | - | ||
| Shareholders' Equity | 122,763 | 116,012 | ||
| Capital | 52,644 | 52,644 | ||
| Capital Reserves | 63,368 | 63,368 | ||
| Net Income | 6,751 | - | ||
| Total liabilities | 231,399 | 211,233 | ||
Certain figures relating to previous periods have been reclassified to bring them into line with the current financial statements, thereby facilitating comparisons.
36
Statement of Cash Flow – Parent Company
| R$ million | ||||||
| First Quarter | ||||||
| 4Q-2007 | 2008 | 2007 | ||||
| 5,169 | Net Income | 6,751 | 4,336 | |||
| 4,847 | (+) Adjustments | 5,367 | 3,384 | |||
| 1,677 | Depreciation & Amortization | 1,541 | 1,260 | |||
| (2) | Oil and Alcohol Accounts | (2) | (3) | |||
| 654 | Oil and Oil Products Supply - Foreign | 6,159 | 159 | |||
| 481 | Charges on Financing and Affiliated Companies | (179) | 784 | |||
| 2,036 | Other Adjustments | (2,152) | 1,184 | |||
| 10,016 | (=) Net Cash Generated by Operating Activities | 12,118 | 7,720 | |||
| (10,078) | (-) Cash used for Cap.Expend. | (7,262) | (4,634) | |||
| (4,155) | Investment in E&P | (3,929) | (3,112) | |||
| (4,030) | Investment in Refining & Transport | (2,285) | (1,015) | |||
| (891) | Investment in Gas and Energy | (703) | (298) | |||
| (5) | Investments in International Area | (13) | (4) | |||
| (390) | Investments in Distribution | - | - | |||
| (277) | Structured Projects Net of Advance | (355) | (94) | |||
| 97 | Dividends | 208 | 36 | |||
| (155) | Marketable Securities | - | - | |||
| (272) | Other Investments | (185) | (147) | |||
| (62) | (=) Free Cash Flow | 4,856 | 3,086 | |||
| 719 | (-) Cash used in Financing Activities | 2,385 | (10,046) | |||
| 657 | (=) Cash Generated in the Period | 7,241 | (6,960) | |||
| 7,191 | Cash at the Beginning of Period | 7,848 | 20,099 | |||
| 7,848 | Cash at the End of Period | 15,089 | 13,139 | |||
37
Statement of Value Added - Parent Company
| R$ million | ||||
| First Quarter | ||||
| 2008 | 2007 | |||
| Description | ||||
| Sale of products and services and non operating income* | 45,130 | 38,320 | ||
| Raw Materials Used | (3,739) | (2,824) | ||
| Products for Resale | (5,908) | (1,889) | ||
| Materials, Energy, Services & Others | (3,870) | (6,043) | ||
| Added Value Generated | 31,613 | 27,564 | ||
| Depreciation & Amortization | (1,541) | (1,260) | ||
| Participation in subsidiaries, goodwill & discount amortization | 798 | 52 | ||
| Financial Income | 1,261 | 491 | ||
| Rent and royalties | 119 | 98 | ||
| Total Distributable Added Value | 32,250 | 26,945 | ||
| Distribution of Added Value | ||||
| Personnel | ||||
| Salaries, Benefits and Charges | 1,979 | 2,974 | ||
| 1,979 | 2,974 | |||
| Government Entities | ||||
| Taxes, Fees and Contributions | 14,893 | 13,129 | ||
| Government Participation | 4,856 | 3,169 | ||
| 19,749 | 16,298 | |||
| Financial Institutions and Suppliers | ||||
| Interest, FX Rate and Monetary Variations | 1,116 | 1,081 | ||
| Rent and Freight Expenses | 2,655 | 2,256 | ||
| 3,771 | 3,337 | |||
| Shareholders | ||||
| Net Income | 6,751 | 4,336 | ||
| 6,751 | 4,336 | |||
| Value Added distributed | 32,250 | 26,945 | ||
* Net of Provisions for Doubtful Debts.
38
| PETROBRAS | |
|
http://www.petrobras.com.br/ri/english
Contacts:
Contacts: PETRÓLEO BRASILEIRO S. A. – PETROBRAS
Investor Relations Department I E-mail: petroinvest@petrobras.com.br / acionistas@petrobras.com.br
Av. República do Chile, 65 – 22nd floor - 20031-912 - Rio de Janeiro, RJ I Tel.: 55 (21) 3224-1510 / 9947
This document may contain forecasts that merely reflect the expectations of the Company’s management. Such terms as “anticipate”, “believe”, “expect”, “forecast”, “intend”, “plan”, “project”, “seek”, “should”, along with similar or analogous expressions, are used to identify such forecasts. These predictions evidently involve risks and uncertainties, whether foreseen or not by the Company. Therefore, the future results of operations may differ from current expectations, and readers should not base their expectations exclusively on the information presented herein.
39
|
PETRÓLEO BRASILEIRO S.A--PETROBRAS |
||
|
By: |
/S/ Almir Guilherme Barbassa
|
|
|
Almir Guilherme Barbassa
Chief Financial Officer and Investor Relations Officer |
||
This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates offuture economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.