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20031-912 - Rio de Janeiro, RJ
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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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| PETROBRAS ANNOUNCES RESULTS FOR THE FIRST QUARTER OF 2007 |
| (Rio de Janeiro – May 11 2007) – PETRÓLEO BRASILEIRO S.A. – Petrobras announced today its consolidated results expressed in millions of Brazilian Reais, in accordance with generally accepted accounting practices in Brazil (BR GAAP). |
Petrobras posted a consolidated net income of R$ 4.131 million in the first quarter of 2007. Consolidated net operating revenues totaled R$ 38.894 million, 8% higher than in the 1Q-2006 (R$ 35.886 million). At the close of the quarter, the Company’s market capitalization stood at R$ 215.666 million.
* Operating profit, before Financial Result
On a consolidated basis, Petrobras invested a total of R$ 8.300 million during the first quarter, up 40% from the same period a year ago. In line with the 2007-2011 Business Plan, most of the spending was used to expand future oil and natural gas production in Brazil (R$ 3.986 million) and abroad (R$1.737 million). Operating cash flow as measured by EBITDA amounted to R$ 10.993 million, ensuring sufficient resources to cover the Company’s investments.
-
Domestic oil and NGL production averaged 1.800 thousand barrels/day, of which 83% was produced from the Campos Basin (1.487 thousand barrels/day), representing an increase of 3% from 1Q-2006 due to the operational start-up of the platforms P-50
(East Albacora), in April/2006, FPSO-Capixaba (Golfinho) in May/2006, P-34 (Jubarte) in December/2006 and FPSO- Cidade do Rio de Janeiro (Espadarte) in January/2007.These new platforms more than offset the natural decline in output from certain mature fields, particularly the Marlim field.
-
Despite the improved operating performance, consolidated net income of R$ 4.131 million was 38% lower than in the 1Q-2006, primarily as a result of a non- recurring operating expense of R$ 1.040 million caused by amending benefits due under
Petros, the company’s pension plan. Other contributing factors included the fall in average prices of crude oil and petroleum products in Brazil and abroad, in line with the decline in international oil prices, and by the increase in average
selling costs, keeping in mind that during 1Q 2006 costs were positively affected by sales from inventory acquired at lower costs during the last quarter of 2005.
- The favorable trade balance for Petrobras, based on the positive difference between exports and imports, was highlighted by the increase in oil exports.
-
The consolidated net debt of Petrobras ended 1Q-2007 at R$ 23.955 million, 28% higher than the R$18.776 million reported on December 31, 2006, reflecting the reduction in cash and cash equivalents caused by the payment of interest own capital.
- Value added by the Petrobras System totaled R$28.338 million, 9% from the year earlier period, R$ 16.638 million of which went to government take and federal, state, and municipal taxes, R$ 3.524 million to suppliers and financial institutions for financial charges, rent and charters, R$ 4.607 million to shareholders and R$ 3.569million to salaries, benefits and charges.
| This document is divided into 5 topics: | ||||||
| PETROBRAS SYSTEM | Page | PETROBRAS | Page | |||
| Financial Performance | 04 | Financial Statements | 36 | |||
| Operating Performance | 09 | |||||
| Financial Statements | 22 | |||||
| Appendices | 31 | |||||
| PETROBRAS SYSTEM |  |
|
Statement by the CEO, José Sergio Gabrielli de Azevedo
Dear shareholders,
The first quarter of 2007 was one period of consolidation and challenges, during which we faced, and continue to face, headwinds and adversity. Despite these problems, the Company has demonstrated its ability to adapt and to overcome challenges, as witnessed by our excellent quarterly operating result.
The first quarter is normally marked by a strong seasonal downturn in fuel consumption due to the lower number of calendar and business days in our main market, Brazil.
Additionally our technical team has been confronted with challenges in its upstream operations, as well as in the commercial and corporate areas. In our upstream activities, we are doing everything possible to minimize delays in the delivery of new production units, which unfortunately have slowed output growth in the short term. We are also facing difficulties related to the geology of the Golfinho reserve in Espírito Santo and high acidity levels in the output from the Albacora Leste field.
In the commercial area, we are concentrating our efforts on overcoming the problems in Bolivia and maintaining a secure supply of natural gas from that country.
Our corporate results during the quarter were affected by the appreciation of the Real and its impact on the net financial results. In addition we recognized some one time costs that should prove beneficial to the Company over the long term, such as the premium paid to investors as an incentive to exchange short term high coupon bonds for longer bonds with a lower coupon, and the increase in operating expenses generated by the financial incentive paid to Petros Plan participants (in exchange for amending the Plan).
Thus we began the year 2007 with great challenges, but also with a list of accomplishments, as we solidified our position in the markets where we operated, and completed strategic operations transactions designed to sustain the level of growth and accomplishments of recent years.
In this context, I draw particular attention to our joint acquisition of Grupo Ipiranga’s shares, which, in line with our strategic plan, will increase the value of our petrochemical holdings by contributing to the consolidation of the Southern Petrochemical Complex. It will also consolidate our position in the distribution sector, strengthening our hold in the North/Northeast and Midwest, as well as give us a share in the refining operations of Refinaria de Petróleo Ipiranga.
In exploration and production, despite the production difficulties mentioned above, the year began on a high note with the discovery of saturated light oil reserves with excellent productivity, located under a thick salt layer along the Espírito Santo coastline. This discovery has extended the productive horizon of the Caxaréu Basin, whose commercial potential was reported to the ANP in December 2006.
FPSO Cidade do Rio de Janeiro was installed and began producing during the quarter. Located offshore in the Espadarte Field in the Campos Basin, the platform has a daily production capacity of up to 100 thousand barrels of oil and 2.5 million cubic meters of natural gas. This new platform will help us to fulfill our key strategy of continuing to expand our production.
On the international front, we initiated production from two wells in the Cottonwood field, in the Gulf of Mexico. As a result, Cottonwood has become our biggest productive field in the United States, with daily output of 25 thousand BOE.
2
In the corporate area, we achieved our goal of 2/3’s adherence to the amended regulations of the PETROS Pension Plan. The implementation of these amendments will increase the transparency of the Company’s obligations to PETROS and their approval will also lead to the conclusion of agreements with union representatives aimed at settling and terminating all pending legal disputes related to the Petrobras System’s supplementary pension plan.
In the first quarter, we posted a consolidated net income of R$ 4.131 million. Net operating income amounted to R$ 38.894 million, 8% up year-on-year and the Company’s market capitalization stood at R$ 215.666 million at the end of the period.
In conclusion, I would like to re-emphasize our willingness, desire, and technical capacities, to overcome the challenges of today. We will do so in a sustainable manner, focusing on profitability and social and environmental responsibility. As a company, we will continue striving to make these concepts an integral part of our daily activities. We are fully confident in our ability to succeed during a period that is undoubtedly challenging, but which is also marked by unquestionable progress and new opportunities.
3
| PETROBRAS SYSTEM | Financial Performance | |
Net Income and Consolidated Economic Indicators
Petrobras posted a consolidated net income of R$ 4.131 million, 38% lower than the 1Q-2006.
| R$ million | ||||||||
First Quarter |
||||||||
| 4Q - 2006 | 2007 | 2006 | D % | |||||
| 53.156 | Gross Operating Revenue | 50.127 | 46.768 | 7 | ||||
| 41.041 | Net Operating Revenue | 38.894 | 35.886 | 8 | ||||
| 7.460 | Operating Profit (1) | 8.582 | 12.010 | (29) | ||||
| (72) | Financial Result | (950) | (444) | 114 | ||||
| 5.200 | Net Income | 4.131 | 6.675 | (38) | ||||
| 1,19 | Net Income per Share | 0,94 | 1,52 | (38) | ||||
| 230.372 | Market Value (Parent Company) | 215.666 | 197.995 | 9 | ||||
| 35 | Gross Margin (%) | 39 | 45 | (6) | ||||
| 18 | Operating Margin (%) | 22 | 33 | (11) | ||||
| 13 | Net Margin (%) | 11 | 19 | (8) | ||||
| 10.225 | EBITDA – R$ million(2) | 10.993 | 14.113 | (22) | ||||
| Financial and Economic Indicators | ||||||||
| 59,68 | Brent (US$/bbl) | 57,75 | 61,75 | (6) | ||||
| 2,1517 | US Dollar Average Price - Sale (R$) | 2,1082 | 2,1944 | (4) | ||||
| 2,1380 | US Dollar Last Price - Sale (R$) | 2,0504 | 2,1724 | (6) | ||||
(2) Operating profit before the financial result, equity result + depreciation/amortization.
| R$ million | ||||||||
First Quarter |
||||||||
| 4Q - 2006 | 2007 | 2006 | D % | |||||
| 7.408 | Operating Income as per Brazilian Corporate Law | 7.548 | 11.140 | (32) | ||||
| 72 | (-) Financial Result | 950 | 444 | 114 | ||||
| (20) | (-) Equity Income Result | 84 | 426 | (80) | ||||
| 7.460 | Operating Profit | 8.582 | 12.010 | (29) | ||||
| 2.765 | Depreciation & Amortization | 2.411 | 2.103 | 15 | ||||
| 10.225 | EBITDA | 10.993 | 14.113 | (22) | ||||
| 25 | EBITDA Margin (%) | 28 | 39 | (28) | ||||
4
The reduction in net income for 1Q-2007 as compared to 1Q-2006 was primarily due to the decline in average prices for crude oil and petroleum products in Brazil and abroad, influenced by the fall in international oil prices. Below is a breakdown of the factors leading to the reduction in net income:
• A R$ 977 million reduction in gross profit:
| Changes | ||||||
| 2007 X 2006 | ||||||
| Main Items | Net Revenues |
Cost of Goods Sold |
Gross Profit |
|||
| . Domestic Market: - Effect of Volumes Sold | 53 | (78) | (25) | |||
| - Effect of Prices | (182) | - | (182) | |||
| . Intl. Market: - Effect of Export Volumes | 697 | (310) | 387 | |||
| - Effect of Export Price | (839) | - | (839) | |||
| . Decrease in expenses: (*) | - | (243) | (243) | |||
| . Increase in Profitability of Distribution Segment | 560 | (503) | 57 | |||
| . Increase (Decrease) in operations of commercialization abroad | 584 | (608) | (24) | |||
| . Increase (Decrease) in international sales | 2.049 | (2.264) | (215) | |||
| . FX effect on controlled companies abroad | (223) | 162 | (61) | |||
| . Other | 309 | (141) | 168 | |||
| 3.008 | (3.985) | (977) | ||||
| (*) Expenses Composition: | Value | |
| - Domestic Government Take | 484 | |
| - Materials, Services and Depreciation | (338) | |
| - Import of gas, crude oil and oil products | (237) | |
| - Salaries, Perquisites and Benefits | (148) | |
| - Transportation: Maritime and Pipelines | (39) | |
| - Third-Party Services | 35 | |
| (243) | ||
** CIF Values.
*** Expenditures with cables, terminals and pipelines.
5
• An increase in the following expenses:
• General and administrative expenses (R$ 455 million) expenses from salaries, bonuses and benefits in Brazil (R$ 109 million) and abroad (R$ 29 million) and greater expenditure on third-party services (R$ 115 million), especially IT and consulting support services; personnel training and development programs (R$ 42 million); new companies abroad (R$ 16 million); and leasing, rent and travel (R$ 25 million);
• Exploratory costs (R$ 345 million), particularly those incurred abroad (R$ 235 million);
• Costs with technological research and development (R$ 134 million), primarily to comply with ANP regulations (R$ 116 million);
• Other operating expenses (R$ 1.416 million), largely as a result of amendments to the Petros Plan regulations (R$ 1.040 million), advertising and marketing (R$ 85 million) and the Ibiritermo, Termobahia and Três Lagoas thermoelectric plants being idled(R$ 86 million).
• A negative impact of R$ 506 million on the net financial result, due to:
• Losses from monetary and exchange variations (R$ 1.006 million), given the higher credit balances denominated in U.S. dollars, partially offset by the lower appreciation of the Real in 2007 (R$ 570 million), and the non-recurring adjustment of the exchange variation in the 1Q-2006, totaling R$ 321 million;
• The premium paid to investors in the bond exchange, which occurred in February/2007 (R$ 112 million).
These negative impacts were partially offset by the following:
• Higher returns from domestic financial investments (R$ 269 million), resulting from the reduction in the dollar-denominated portion and the lower appreciation of the Real (4.10% in the 1Q-2007, versus 7.19% in the 1Q-2006);
• The reduction in financial expenses (R$ 149 million), due to lower debt and reduced margins;
The above effects were offset by the following factors:
• An increase in equity income (R$ 342 million), primarily due to reduced foreign exchange losses on the conversion of foreign subsidiaries’ shareholders equity, in turn due to the lower appreciation of the Real against the dollar in 1Q-2007 in comparison to 1Q-2006.
• An improved non-operating result (R$ 120 million) due to the sale of investments abroad and gains from changes in shareholding positions (R$ 35 million), plus the losses in 2006 from the write-off of receivables related to the loss of the P-36 platform (R$ 60 million);
6
Net income for 1Q-2007 (R$ 4.131 million) was 21% below the R$ 5.200 million reported in 4Q-2006. The gross margin increased from the prior quarter, primarily due to the reduction in the government take, and import costs. The increased gross margin, however, was more than offset by the non-recurring expense from the financial incentive paid to the pension plan participants, the impact of the exchange variation on the financial result, and the increase in the marginal tax rate relative to the fiscal benefit from interest on own capital declared in the 4Q-2006. Below is a breakdown of the differences between 1Q-2007 and 4Q-2006:
• R$ 920 million increase in gross profit:
| Changes 1Q-2007 X 4Q-2006 MAIN INFLUENCES |
||||||
| R$ million | ||||||
| Main Items | Net Revenues |
Cost of Goods Sold |
Gross Profit |
|||
| . Domestic Market: - Effect of Volumes Sold | (1.901) | 1.196 | (705) | |||
| - Effect of Prices | (156) | - | (156) | |||
| . Intl. Market: - Effect of Export Volumes | (750) | 382 | (368) | |||
| - Effect of Export Price | 117 | - | 117 | |||
| . Increase / Decrease in expenses: (*) | - | 1.607 | 1.607 | |||
| . Increase / Decrease in Profitability of Distribution Segment | 169 | (145) | 24 | |||
| . Increase / Decrease in operations of commercialization abroad | (431) | 452 | 21 | |||
| . Increase / Decrease in international sales | (81) | 135 | 54 | |||
| . FX effect on controlled companies abroad | 90 | (68) | 22 | |||
| . Other | 796 | (492) | 304 | |||
| (2.147) | 3.067 | 920 | ||||
| (*) Expenses Composition: | Value | |
| - Import of gas, crude oil and oil products** | 1.316 | |
| - Domestic Government Take | 660 | |
| - Materials, Services and Depreciation | (149) | |
| - Salaries, Perquisites and Benefits | (99) | |
| - Third-Party Services | (86) | |
| - Transportation: Maritime and Pipelines *** | (35) | |
| 1.607 | ||
** CIF Value.
*** Expenditures with cables, terminals, and pipelines.
7
• A reduction in operating expenses (R$ 201 million) versus 4Q 2006 due to:
• Lower exploratory costs (R$ 163 million) when compared to the write-off from dry holes in the 4Q-2006 (R$ 125 million);
• Reduced selling expenses (R$ 135 million), most notably in the distribution and international segments;
• A decline in R&D expenses (R$ 97 million), especially from the adjustment to provisions for research and development expenses in compliance with ANP regulations (R$ 112 million) undertaken by CENPES (Petrobras Research Center);
• These decreases were offset by the increase in other operating expenses (R$ 416 million), largely as a result of the financial incentive paid to Petros Plan affiliates in exchange for accepting the amendments to the regulations (R$ 1.040 million), offset by reduced expenses on institutional relations and cultural projects (R$ 219 million).
• An increase of R$ 878 million versus 4Q 2006 for the net financial result, due to:
• Losses from monetary and exchange variations (R$ 581 million), given the higher appreciation of the Real (4.10% in the 1Q-2007, versus 1.66% in the 4Q-2006) and the monetary restatement of 2006 dividend payable;
• The premium paid to investors in the bond exchange that occurred in February/07 (R$ 112 million);
• Lower returns from financial investments (R$ 47 million), in Reais, due to the reduction in exchange gains and yields from Brazilian government bonds.
• Increase in income tax and social contribution (R$ 1.402 million), in contrast to the fiscal benefit from the interest on own capital payment declared in the 4Q-2006 (R$ 671 million).
8
| PETROBRAS SYSTEM | Operational Performance | |
Physical Indicators
First Quarter |
||||||||
| 4Q - 2006 | 2007 | 2006 | D % | |||||
| Exploration & Production - Thousand bpd/day | ||||||||
| Domestic Production | ||||||||
| 1.823 | Oil and LNG | 1.800 | 1.751 | 3 | ||||
| 277 | Natural Gas (1) | 274 | 270 | 1 | ||||
| 2.100 | Total | 2.074 | 2.021 | 3 | ||||
| Consolidated - International Production | ||||||||
| 115 | Oil and LNG | 111 | 158 | (30) | ||||
| 97 | Natural Gas (1) | 103 | 99 | 4 | ||||
| 212 | Total | 214 | 257 | (17) | ||||
| 22 | Non Consolidated - Internacional Production (2) | 17 | - | |||||
| 234 | Total International Production | 231 | 257 | (10) | ||||
| 2.334 | Total production | 2.305 | 2.278 | 1 | ||||
| (1)Does not include liquified gas and includes re-injected gas | ||||||||
| (2)Non consolidated companies in Venezuela. | ||||||||
| Refining, Transport and Supply - Thousand bpd | ||||||||
| 408 | Crude oil imports | 340 | 344 | (1) | ||||
| 132 | Oil products imports | 97 | 115 | (16) | ||||
| 540 | Import of crude oil and oil products | 437 | 459 | (5) | ||||
| 454 | Crude oil exports | 377 | 262 | 44 | ||||
| 215 | Oil products exports | 247 | 270 | (9) | ||||
| 669 | Export of crude oil and oil products (3) | 624 | 532 | 17 | ||||
| 129 | Net exports (imports) crude oil and oil products | 187 | 73 | 156 | ||||
| 162 | Import of gas and others | 146 | 148 | (1) | ||||
| 4 | Others Exports | (3) 1 | 2 | (58) | ||||
| 1.900 | Output of oil products | 2.041 | 1.916 | 7 | ||||
| 1.696 | • Brazil | 1.781 | 1.812 | (2) | ||||
| 204 | • International | 260 | 104 | 150 | ||||
| 2.227 | Primary Processed Installed Capacity | 2.227 | 2.115 | 5 | ||||
| 1.986 | • Brazil(4) | 1.986 | 1.986 | - | ||||
| 241 | • International | 241 | 129 | 87 | ||||
| Use of Installed Capacity (%) | ||||||||
| 85 | • Brazil | 90 | 91 | (1) | ||||
| 84 | • International | 85 | 80 | 5 | ||||
| 78 | Domestic crude as % of total feedstock processed | 77 | 81 | (4) | ||||
| (3) Volumes of oil and oil products exports include ongoing exports | ||||||||
| (4) As per ownership recognized by the ANP | ||||||||
| Sales Volume - Thousand bpd | ||||||||
| 1.711 | Total Oil Products | 1.652 | 1.623 | 2 | ||||
| 42 | Alcohol, Nitrogens and others | 47 | 42 | 12 | ||||
| 252 | Natural Gas | 226 | 232 | (3) | ||||
| 2.005 | Total domestic market | 1.925 | 1.897 | 1 | ||||
| 672 | Exports | 625 | 534 | 17 | ||||
| 603 | International Sales | 670 | 438 | 53 | ||||
| 1.275 | Total international market | 1.295 | 972 | 33 | ||||
| 3.280 | Total | 3.220 | 2.869 | 12 | ||||
9
Prices and Costs Indicators
First Quarter |
||||||||
| 4Q - 2006 | 2007 | 2006 | D % | |||||
| Average Oil Products Realization Prices | ||||||||
| 152,10 | Domestic Market (R$/bbl) | 150,97 | 153,79 | (2) | ||||
Average sales price - US$ per bbl |
||||||||
| Brazil | ||||||||
| 48,70 | Crude Oil (US$/bbl)(5) | 47,79 | 53,69 | (11) | ||||
| 15,85 | Natural Gas (US$/bbl) (6) | 32,71 | 15,53 | 111 | ||||
| International | ||||||||
| 43,22 | Crude Oil (US$/bbl) | 42,41 | 38,47 | 10 | ||||
| 14,30 | Natural Gas (US$/bbl) | 14,48 | 11,50 | 26 | ||||
(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. The increase in the 1Q07 due to new methodology that takes in consideration the international natural gas prices as one of the variables.
Cost - US$/barrel |
||||||||
| Lifting cost: | ||||||||
| • Brazil | ||||||||
| 7,24 | • • without government participation | 7,20 | 6,32 | 14 | ||||
| 17,59 | • • with government participation(8) | 16,24 | 17,34 | (6) | ||||
| 4,36 | • International | 3,89 | 2,96 | 31 | ||||
| Refining cost | ||||||||
| 2,71 | • Brazil (7) | 2,54 | 1,90 | 34 | ||||
| 2,08 | • International | 2,42 | 1,57 | 54 | ||||
| 630 | Corporate Overhead (US$ million) Holding Company (7) | 549 | 427 | 29 | ||||
(7) The company, in order to promote a better indexes adherence to its operating and
management models, has reviewed their concepts, recalculating the values of previous periods,
as already mentioned on 4Q06 Report.
(8) Lifting cost with government take had its historical series adjusted,
retroactive to 2002, due to ANP's (National Petroleum Agency) new
interpretation of the deductibility of the expenses with Project Finance
in the Marlim field over the accounting of special participation.
| Cost - R$/barrel | ||||||||
| Lifting cost | ||||||||
| • Brazil | ||||||||
| 15,46 | • • without government participation | 15,20 | 13,84 | 10 | ||||
| 37,75 | • • with government participation(8) | 34,12 | 37,02 | (8) | ||||
| Refining cost | ||||||||
| 5,84 | • Brazil (7) | 5,36 | 4,19 | 28 | ||||
10
Exploration and Production – thousand barrels/day
Domestic oil and NGL production increased by 3% versus 1Q-2006 due to the operational start-up of the platforms P-50 (Albacora Leste), in April 2006, FPSO-Capixaba (Golfinho), in May 2006, P-34 (Jubarte), in December 2006, and FPSO-Cidade do Rio de Janeiro (Espadarte), in January 2007.
Domestic oil and NGL production dipped by 1% in 1Q-2007 versus 4Q-2006, due to the scheduled maintenance stoppage in the P-37 platform (Marlim field) in January.
Consolidated international oil production dropped 30% when compared to 1Q-2006 due to loss participation in Venezuela’s operations as a result of the contractual shift from an operating agreement to a joint venture agreement, in which the Venezuelan government assumed a controlling interest through PDVSA. Consolidated gas production declined by 4% year-on-year, due to the resumption of normal production in the United States, which was adversely affected in 2006 by hurricanes Rita and Katrina.
Consolidated international oil production fell by 3% as compared to the 4Q-2006 due to the interruption of operations in Ecuador caused by popular unrest. Consolidated gas production increase 6% quarter-over-quarter as a result of increased demand for Bolivian gas in Argentina and the operational start-up of the Cottonwood field in the United States.
Refining, Transportation and Supply – thousand barrels/day
The volume of processed crude in domestic refineries during the quarter (primary processing) dipped 1% versus the same period one year earlier, due to scheduled maintenance stoppages in the Replan and Reman refineries and the cleaning of furnaces.
In comparison with 4Q-2006, which had a higher number of maintenance stoppages, domestic processed crude increased by 4%.
Processed crude in the overseas refineries (primary processing) jumped by 100% versus 1Q-2006, due to the inclusion of the Pasadena Refinery (USA) as of October/06 and the increase in Argentine refining capacity.
11
In relation to the previous quarter, total processed throughput in the overseas refineries dropped by 1%, due to the scheduled maintenance stoppages in Bolivia and the United States, offset by the return to regular operations in the Argentina refinery, as a result of stoppage to increase the implementation of the installed capacity during 4Q-2006.
Costs
Lifting Cost (US$/barrel)
The unit lifting cost in Brazil, excluding government take, increased by 14% in relation to 1Q-2006. Excluding the impact of the 4% appreciation of the Real on lifting costs denominated in Reais, unit lifting costs climbed 11%. The upturn was due to increased expenditure on interventions in wells, preventive and corrective maintenance and the chartering costs of drilling and associated support ships; higher personnel expenses due to wage hikes and the increase in the workforce; and the higher unitary costs of new platforms FPSO-Capixaba (Golfinho), P-34 (Jubarte) and FPSO-Cidade do Rio de Janeiro (Espadarte), which are expected to trend down as they utilize their full capacity.
In comparison with 4Q-2006, the unit domestic lifting cost, excluding government take, decreased by 1% because of less use of repair materials for well intervention and equipment replacement, partially offset by decrease in production due to programmed stoppages in the period.
Including government take, the domestic unit lifting cost dropped by 8% over 4Q-2006, once again due to the decline in the domestic oil reference price (in line with international prices), as well as reduced output from the Marlim field, as a result of the scheduled maintenance stoppage in the P-37 platform, which reduced the tax rate used to assess Special Participation.
The international unit lifting cost increased by 31% in comparison with 1Q-2006, due to increased expenditure in the United States following the return to normal operations which had been affected by hurricanes Rita e Katrina in 2006; the operational start-up of the Cottonwood field in February/07; and higher expenditure in Angola on restructuring, maintenance of the facilities and recovery of mature wells.
12
The international unit lifting cost decreased by 11% in 1Q-2007 versus the prior three months, due to reduced expenditure on well repairs in Argentina, as well as on restructuring, maintenance of the facilities and the recovery wells.
Refining Cost (US$/Barrel)
Domestic unit refining costs moved up 34% as compared to the prior year’s first quarter, due to increased operating expenses reflecting the investments to adapt the refineries for heavy oil processing as well as improve the fuel quality to meet more stringent environmental requirements. Additionally, cost increased as a result of the larger number of scheduled maintenance stoppages. Excluding the impact of the 4% appreciation of the Real on Real-denominated refining costs, these costs climbed by 29%.
In relation to 4Q-2006, the unit refining cost fell by 6%, due to reduced personnel expenses (salaries, bonuses and benefits) caused by the recognition of retroactive wage increase granted by the collective bargaining agreement in the prior quarter.
Average unit international refining costs climbed 54% over the first quarter of 2006, due to the inclusion of the Pasadena Refinery (USA). Excluding this impact, refining costs would have fallen by 8%, due to the 9% increase in production.
Average unit international refining costs increased by 16% quarter-over-quarter, due to the maintenance stoppage and the higher cost of materials in the United States.
13
Corporate Overhead – Parent Company (US$ million)
In comparison with 1Q-2006, corporate overhead climbed by 29% in 1Q-2007, reflecting the growth and increased complexity of the Company’s operations. Excluding the impact of the 4% appreciation of the Real (given that all such costs are denominated in Reais), the corporate overhead increased 25% year-on-year due to higher expenses from specialized technical services, sponsorships, marketing and advertising, and increases in salaries, bonuses and benefits as a result of the collective bargaining agreements and larger workforce.
Corporate overhead fell by 13% over the previous quarter, primarily due to higher expenses from cultural sponsorships in 4Q-2006, including those benefiting from the Rouanet Law, and donations to the FIA (Childhood and Adolescence Fund).
Sales Volume – Thousand Barrels/day
Domestic sales volume in 1Q-2007 was up 1,5% versus 1Q-2006, led by fuel oil, LPG and aviation fuel, reflecting higher demand from the manufacturing industry and thermoelectric power plants, population growth, increased earnings among the less
favored income groups, the expansion of tourism and GDP growth.
Gasoline volume recorded an increase, triggered by the reduction in the anhydrous alcohol ratio in type “C” gasoline and the increase in consumer income. Diesel sales declined, due to the start-up of thermoelectric plants powered by fuel oil, as well as exceptionally heavy rainfall which reduced transport levels, in turn reducing the level of operations in agricultural, mining and construction machinery.
Export volumes rose by 17%, as a result of increased production and the reduced share of domestic oil production in total processed throughput.
International sales volume climbed by 53% due to the inclusion of the Pasadena Refinery’s operations in October/06, the increase in US output and commercial operations abroad, partially offset by the deconsolidation of operations in Venezuela.
Decrease in the oil products sales when compared with 4Q06, mainly diesel, LPG and gasoline due to the seasonality effect and the distribution companies’ high level inventories.
Especially about diesel the usual decrease because of seasonality was exceptionally caused by reduced activity level in industry and agriculture operations given the remarkably heavy rainfall period and substitution from diesel to fuel oil in the Manaus thermo-plants operations.
The natural gas sales volumes decline because of lower sales for thermoelectric power stations and, in lower level, of gas for other utilities, due to the seasonality.
14
| Result by Business Area R$ million (1) | ||||||||
| First Quarter | ||||||||
| 4Q-2006 | 2007 | 2006 | D% | |||||
| 4.640 | EXPLORATION & PRODUCTION | 5.096 | 6.774 | (25) | ||||
| 1.462 | SUPPLY | 2.144 | 2.000 | 7 | ||||
| (307) | GAS AND ENERGY | (314) | (78) | 303 | ||||
| 130 | DISTRIBUTION | 189 | 163 | 16 | ||||
| (247) | INTERNATIONAL (2) | (259) | 236 | (210) | ||||
| (798) | CORPORATE | (2.616) | (1.862) | 40 | ||||
| 320 | ELIMINATIONS AND ADJUSTMENT | (109) | (558) | (80) | ||||
| 5.200 | CONSOLIDATED NET INCOME | 4.131 | 6.675 | (38) | ||||
(1) Comments on the results by business area begin on page 16 and their respective financial statements on page 26.
(2) In the international business segment, given that all operations are executed abroad, comparisons between the periods is 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.
15
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 by business area, taking into account 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.
E&P: Net income from Exploration and Production totaled R$ 5,096 million in 1Q-2007, down 25% from the first three months of 2006 (R$ 6,774 million), due to the following factors:
• A R$ 1,904 million reduction in gross profit, due to the decline in average domestic oil prices, partially offset by the 3% upturn in oil and NGL output, lower production costs and higher average transfer prices for natural gas;
• Expenses of R$ 220 million, comprised of financial incentives to pension plan participants in exchange for accepting amendments to the plan’s regulations.
The spread between the average domestic oil price and the average Brent price widened from US$ 8.07/bbl in 1Q-2006 to US$ 9.96/bbl in 1Q-2007.
In comparison with the previous quarter, net income increased 10% during 1Q-2007 due to lower production costs and higher average transfer prices for natural gas, partially offset by the reduction in oil and NGL output triggered by the scheduled maintenance stoppage in P-37 and the lower average sale/transfer prices for domestic oil.
The spread between the average domestic oil sale/transfer price and the average Brent price narrowed from US$ 10.98/bbl in 4Q-2006 to US$ 9.96/bbl in 1Q-2007.
SUPPLY: The Supply segment recorded a net income of R$ 2,144 million in 1Q-2007, up 7% from the R$ 2,000 million registered during the same period of 2006, reflecting the reduction in the average price of oil acquired, lower prices for oil product imports associated with the 4% appreciation of the Real, and the lower cost of heavy oils, partially offset by:
• A 2% decline in the average domestic sale price of basic oil products;
• A 9% reduction in oil product export volumes;
• The sale of inventories in 1Q-2006 that had been acquired at a lower cost at the end of 2005.
The increase in other operating expenses was primarily due to expenses of R$ 129 million from the financial incentive to pension plan participants in exchange for their acceptance of the amendments to the regulations.
16
In comparison with 4Q-2006, net income increased by 47% during the quarter due to the reduction in the oil acquisition/transfer cost, and the sale, in 4Q-2006, of inventories acquired at a higher cost, partially offset by the 3% decline in domestic oil product sales volume and the narrower spread between heavy and light oils.
GAS AND ENERGY: Gas and Energy recorded a loss of R$ 314 million (versus a loss of R$ 78 million in 1Q-2006), generated by the increase in the average domestic transfer cost for natural gas, partially offset by the improvement in the energy sales margin due to the lower energy acquisition cost, in turn caused by the rise in the reservoir levels of Brazil’s hydro plants.
The comparison with the previous quarter was less marked (net loss of R$ 314 million versus a loss of R$ 307 million in 4Q-2006). The difference was the result of:
• The increase in the average transfer cost of domestic natural gas;
• The 10% reduction in natural gas sales volume.
These effects were partially offset by the increase in energy sales volume and the wider sales margin, resulting from lower acquisition costs of electricity.
According to the new criterion, which revised market volume for ethanol, the market share of the fuel distribution business was 33.9% against 31.6% in 1Q06 (equivalent to 32.7% based on the previous criterion).
Net income increased by 45% over 4Q-2006 due to the wider sales margin. This effect was partially offset by a 4% drop in sales volume, reflecting the smaller number of days in comparison with the final three months of 2006, and the decline in the segment’s share of the fuel distribution market from 35.1%, in the 4Q-2006, to 33.9% .
The reduction in selling expenses also contributed to the 1Q-2007 improvement.
INTERNATIONAL: The International segment generated a net loss during the first-quarter 2007 of R$ 259 million, versus net income of R$ 236 million in 1Q-2006.
This reversal was primarily due to:
• A R$ 273 million decrease in gross profit caused by:
i) The reduced income from Venezuelan operations;
ii) the increase in government take in Bolivia;
iii) the decline in international oil prices;
iv) the impact of the 6%
appreciation of the Real against the US dollar on the financial statement currency conversion process.
• A R$ 235 million increase in exploration and drilling expenses from the acquisition of seismic data in Turkey, Angola and United States.
The first-quarter loss of R$ 259 million was very close to the R$ 247 million loss reported in the 4Q-2006.
17
CORPORATE: Corporate activities generated a loss of R$ 2,616 million in 1Q-2007, versus a loss of R$ 1,862 million in 1Q-2006, as a result of:
• Expenses of R$ 632 million as financial incentive to pension plan participants in exchange for their acceptance of the amended plan;
• The R$ 506 million increase in net financial expenses, as detailed on page 6;
• The R$ 190 million increase in G&A expenses resulting from higher third-party services and personnel expenses, the latter due to the expansion of the workforce in 2006 and the collective bargaining agreement.
These effects were partially offset by the reduction in foreign exchange losses from the conversion of equity investments abroad due to the lower appreciation of the Real in relation to 1Q-2006;
The variation between 1Q2007 and 4Q-2006 quarter was even larger (loss of R$ 2,616 million, versus a loss of R$ 798 million in 4Q-2006) mainly due to:
• The R$ 878 million increase in net financial expenses (see page 8);
• Expenses of R$ 632 million from the financial incentive to pension plan participants in exchange for their acceptance of the amended plan;
• The higher tax burden caused by the non-recurrence of the fiscal benefit from provisioning of interest on equity, which totaled R$ 671 million in 4Q-2006.
These effects were partially offset by reduced expenses from institutional relations and cultural projects (R$ 161 million).
18
Consolidated Debt
| R$ million | ||||||
| 03.31.2007 | 12.31.2006 | D % | ||||
| Short-term Debt (1) | 11.879 | 13.074 | (9) | |||
| Long-term Debt (1) | 32.539 | 33.531 | (3) | |||
| Total | 44.418 | 46.605 | (5) | |||
| Net Debt (2) | 23.955 | 18.776 | 28 | |||
| Net Debt/(Net Debt + Shareholder's Equity) (1) | 19% | 16% | 3 | |||
| Total Net Liabilities (1) (3) | 189.368 | 185.249 | 2 | |||
| Capital Structure | ||||||
| (Third Parties Net / Total Liabilities Net) | 46% | 47% | (1) | |||
(1) Includes debt from leasing contracts (R$ 2.259 million 3.31.2007 and R$ 2.540 million on 12.31.2006) .
(2) Total debts – cash and cash equivalents
(3) Total liabilities net of cash/financial investments.
The net debt of the Petrobras System totaled R$ 23.955 million on March 31, 2007, up 28% from December 31, 2006, due to the reduction in cash and cash equivalents caused by the payment of dividends and interest on equity in 1Q-2007.
The level of indebtedness, measured by the net debt/EBITDA ratio, increased from 0,37 on December 31, 2006 to 0,54 on March 31, 2007. The portion of the capital structure represented by third parties was 46%, down 1 percentage point from the close of 2006.
19
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 or by structuring ventures with strategic partners. On March 31, 2007, total investments amounted to R$ 8.300 million, an increase of 40% from the same period of 2006.
| R$ million | ||||||||||
| First Quarter | ||||||||||
| 2007 | % | 2006 | % | D % | ||||||
| • Own Investments | 7.385 | 88 | 5.386 | 91 | 37 | |||||
| Exploration & Production | 3.986 | 48 | 3.359 | 57 | 19 | |||||
| Supply | 1.040 | 12 | 799 | 13 | 30 | |||||
| Gas and Energy | 197 | 2 | 149 | 3 | 32 | |||||
| International | 1.922 | 23 | 703 | 12 | 173 | |||||
| Distribution | 107 | 1 | 138 | 2 | (22) | |||||
| Corporate | 133 | 2 | 238 | 4 | (44) | |||||
| • Special Purpose Companies (SPCs) | 861 | 11 | 494 | 8 | 74 | |||||
| • Ventures under Negotiation | 54 | 1 | 33 | 1 | 64 | |||||
| • Structured Projects | - | - | 1 | - | - | |||||
| Exploration & Production | - | - | 1 | - | (100) | |||||
| Total Investments | 8.300 | 100 | 5.914 | 100 | 40 | |||||
| R$ million | ||||||||||
| First Quarter | ||||||||||
| 2007 | % | 2006 | % | D % | ||||||
| International | ||||||||||
| Exploration & Production | 1.737 | 90 | 578 | 82 | 201 | |||||
| Supply | 88 | 5 | 57 | 8 | 54 | |||||
| Gas and Energy | 49 | 2 | 15 | 2 | 227 | |||||
| Distribution | 15 | 1 | 6 | 1 | 150 | |||||
| Other | 33 | 2 | 47 | 7 | (30) | |||||
| Total Investments | 1.922 | 100 | 703 | 100 | 173 | |||||
| R$ million | ||||||||||
| First Quarter | ||||||||||
| 2007 | % | 2006 | % | D % | ||||||
| Projects Developed by SPCs | ||||||||||
| Marlim Leste | 285 | 33 | 219 | 44 | 30 | |||||
| PDET Off Shore | 77 | 9 | 13 | 3 | 492 | |||||
| Barracuda and Caratinga | - | - | 8 | 2 | (100) | |||||
| Malhas | 199 | 23 | 129 | 26 | 54 | |||||
| Gasene | 69 | 8 | 68 | 14 | - | |||||
| EVM | - | - | 30 | 6 | - | |||||
| CDMPI | 37 | 4 | - | - | - | |||||
| Mexilhão | 90 | 11 | - | - | - | |||||
| Amazônia | 104 | 12 | 27 | 5 | 285 | |||||
| Total Investments | 861 | 100 | 494 | 100 | 74 | |||||
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 82 consortiums. These ventures will require total investments of around US 8,764 million by the end of the present year.
20
| PETROBRAS SYSTEM | Financial Statements | |
Income Statement – Consolidated
| R$ million | ||||||
| First Quarter | ||||||
| 4Q-2006 | 2007 | 2006 | ||||
| 53.156 | Gross Operating Revenues | 50.127 | 46.768 | |||
| (12.115) | Sales Deductions | (11.233) | (10.882) | |||
| 41.041 | Net Operating Revenues | 38.894 | 35.886 | |||
| (26.696) | Cost of Goods Sold | (23.629) | (19.644) | |||
| 14.345 | Gross profit | 15.265 | 16.242 | |||
| Operating Expenses | ||||||
| (1.550) | Sales | (1.415) | (1.342) | |||
| (1.728) | General and Administratives | (1.641) | (1.186) | |||
| (818) | Cost of Prospecting, Drilling & Lifting | (655) | (310) | |||
| (45) | Losses on recovery of assets | - | - | |||
| (473) | Research & Development | (376) | (242) | |||
| (356) | Taxes | (299) | (240) | |||
| (487) | Pension and Health Plan | (453) | (484) | |||
| (1.428) | Other | (1.844) | (428) | |||
| (6.885) | (6.683) | (4.232) | ||||
| Net Financial Expenses | ||||||
| 688 | Income | 669 | 370 | |||
| (604) | Expenses | (883) | (1.084) | |||
| (677) | Monetary & FX Correction - Assets | (1.870) | (228) | |||
| 521 | Monetary & FX Correction - Liabilities | 1.134 | 498 | |||
| (72) | (950) | (444) | ||||
| (6.957) | (7.633) | (4.676) | ||||
| 20 | Gains from Investments in Subsidiaries | (84) | (426) | |||
| 7.408 | Operating Profit | 7.548 | 11.140 | |||
| 35 | Non-operating Income (Expenses) | 27 | (93) | |||
| (1.901) | Income Tax & Social Contribution | (2.968) | (3.868) | |||
| (342) | Minority Interest | (476) | (504) | |||
| 5.200 | Net Income | 4.131 | 6.675 | |||
21
Balance Sheet – Consolidated
| Assets | R$ million | |||
| 03.31.2007 | 12.31.2006 | |||
| Current Assets | 59.665 | 67.219 | ||
| Cash and Cash Equivalents | 20.463 | 27.829 | ||
| Accounts Receivable | 14.373 | 14.412 | ||
| Inventories | 15.065 | 15.941 | ||
| Recoverable Taxes | 7.160 | 6.826 | ||
| Other | 2.604 | 2.211 | ||
| Non-current Assets | 147.906 | 143.319 | ||
| Long-term Assets | 17.255 | 16.361 | ||
| Petroleum & Alcohol Account | 789 | 786 | ||
| Advances to Suppliers | 651 | 707 | ||
| Marketable Securities | 538 | 410 | ||
| Deferred Taxes and Social Contribution | 6.952 | 6.399 | ||
| Advance for Pension Plan Migration | 1.277 | 1.242 | ||
| Prepaid Expenses | 1.950 | 1.839 | ||
| Accounts Receivable | 1.830 | 1.776 | ||
| Judicial Deposits - Legal Matters | 1.663 | 1.750 | ||
| Other | 1.605 | 1.452 | ||
| Investments | 4.471 | 4.755 | ||
| Fixed Assets | 118.295 | 115.341 | ||
| Intangible | 5.628 | 4.414 | ||
| Deferred | 2.257 | 2.448 | ||
| Total Assets | 207.571 | 210.538 | ||
| Liabilities | R$ million | |||
| 03.31.2007 | 12.31.2006 | |||
| Current Liabilities | 40.541 | 48.157 | ||
| Short-term Debt | 11.366 | 12.522 | ||
| Suppliers | 9.546 | 11.510 | ||
| Taxes and Social Contribution Payable | 9.533 | 8.413 | ||
| Project Finance and Joint Ventures | 62 | 34 | ||
| Pension Fund Obligations | 314 | 415 | ||
| Dividends | 1.582 | 7.897 | ||
| Salaries, Benefits and Charges | 1.443 | 1.452 | ||
| Other | 6.695 | 5.914 | ||
| Non Current Liabilities | 57.234 | 56.962 | ||
| Long-term Debt | 30.793 | 31.543 | ||
| Pension Fund Obligations | 3.358 | 3.048 | ||
| Health Care Benefits | 8.758 | 8.419 | ||
| Deferred Taxes and Social Contribution | 9.294 | 9.116 | ||
| Other | 5.031 | 4.836 | ||
| Deferred Income | 393 | 413 | ||
| Minority interest | 7.656 | 7.475 | ||
| Shareholders’ Equity | 101.747 | 97.531 | ||
| Capital Stock | 48.264 | 48.264 | ||
| Reserves | 49.352 | 49.267 | ||
| Net Income | 4.131 | - | ||
| Total Liabilities | 207.571 | 210.538 | ||
In line with international accounting practices, CVM Resolution No. 488 approved Proclamation NPC 27 of the Institute of Independent Auditors of Brazil (IBRACON), which establishes new standards for the presentation and publication of financial statements. According to this proclamation, assets must be classified as “Current” and “Non-current”, the latter further divided into long-term, investments, fixed assets, intangible assets and deferred assets. Liabilities must be classified as “Current” and “Non-current”.
22
Statement of Cash Flow - Consolidated
| R$ million | ||||||
| First Quarter | ||||||
| 4Q-2006 | 2007 | 2006 | ||||
| 5.200 | Net Income | 4.131 | 6.675 | |||
| 8.044 | (+) Adjustments | 3.362 | 3.487 | |||
| 2.765 | Depreciation & Amortization | 2.411 | 2.103 | |||
| 532 | Charges on Financing and Connected Companies | (676) | (1.078) | |||
| 342 | Minority interest | 476 | 504 | |||
| (20) | Result of Participation in Material Investments | 84 | 426 | |||
| 486 | Foreign Exchange on Fixed Assets | 1.749 | 2.575 | |||
| 1.307 | Deferred Income Tax and Social Contribution | 106 | 775 | |||
| 651 | Inventory Variation | 876 | (1.707) | |||
| 534 | Suppliers Variation | (1.895) | 1.290 | |||
| 601 | Pension and Health Plan Variation | 548 | 604 | |||
| 846 | Other | (317) | (2.005) | |||
| 13.244 | (=) Net Cash Generated by Operating Activities | 7.493 | 10.162 | |||
| (12.061) | (-) Cash used for Cap.Expend. | (7.951) | (6.020) | |||
| (5.558) | Investment in E&P | (4.364) | (3.884) | |||
| (1.687) | Investment in Refining & Transport | (1.102) | (728) | |||
| (1.351) | Investment in Gas and Energy | (704) | (283) | |||
| (232) | Project Finance | (104) | (138) | |||
| (2.990) | Investment in International Segment | (1.526) | (656) | |||
| 24 | Dividends | 86 | 21 | |||
| (267) | Other investments | (237) | (352) | |||
| 1.183 | (=) Free cash flow | (458) | 4.142 | |||
| 2.127 | (-) Cash used in Financing Activities | (6.908) | (4.576) | |||
| 2.128 | Financing | (1.035) | (499) | |||
| (1) | Dividends | (5.873) | (4.077) | |||
| 3.310 | (=) Net cash generated in the period | (7.366) | (434) | |||
| 24.519 | Cash at the Beginning of Period | 27.829 | 23.417 | |||
| 27.829 | Cash at the End of Period | 20.463 | 22.983 | |||
Certain figures relating to previous periods have been reclassified to bring them into line with the current financial statements, thereby facilitating comparisons.
23
Statement of Value Added – Consolidated
| R$ million | ||||
| First Quarter | ||||
| 2007 | 2006 | |||
| Description | ||||
| Sales of Products and Services and Non-Operating Revenues* | 50.687 | 46.915 | ||
| Raw Materials Used | (5.576) | (4.988) | ||
| Products for Resale | (7.949) | (5.395) | ||
| Materials, Energy, Services & Other | (7.124) | (3.167) | ||
| Added Value Generated | 30.038 | 33.365 | ||
| Depreciation & Amortization | (2.411) | (2.103) | ||
| Participation in Related Companies, Goodwill & Negative Goodwill | (84) | (426) | ||
| Financial Result | 669 | 143 | ||
| Rent and Royalties | 126 | 149 | ||
| Total Distributable Added Value | 28.338 | 31.128 | ||
| Distribution of Added Value | ||||
| Personnel | ||||
| Salaries, Benefits and Charges | 3.569 | 2.538 | ||
| 3.569 | 2.538 | |||
| Government Entities | ||||
| Taxes, Fees and Contributions | 13.170 | 13.758 | ||
| Government Take | 3.468 | 3.998 | ||
| 16.638 | 17.756 | |||
| Financial Institutions and Suppliers | ||||
| Interest, FX Rate and Monetary Changes | 1.620 | 858 | ||
| Rent and Freight Expenses | 1.904 | 2.797 | ||
| 3.524 | 3.655 | |||
| Shareholders | ||||
| Minority Interest | 476 | 504 | ||
| Retained Earnings | 4.131 | 6.675 | ||
| 4.607 | 7.179 | |||
| Distributed Added Value | 28.338 | 31.128 | ||
| * Net of Provisions for Doubtful Debts. | ||||
24
Consolidated Result by Business Area - 1Q-2007
| R$ MILLION | ||||||||||||||||
| GAS | ||||||||||||||||
| & | ||||||||||||||||
| E&P | SUPPLY | ENERGY | DISTRIB. | INTERN. | CORPOR. | ELIMIN. | TOTAL | |||||||||
| INCOME STATEMENTS | ||||||||||||||||
| Net Operating Revenues | 16.967 | 29.690 | 2.145 | 10.223 | 4.671 | - | (24.802) | 38.894 | ||||||||
| Intersegments | 15.376 | 8.024 | 552 | 182 | 668 | - | (24.802) | - | ||||||||
| Third Parties | 1.591 | 21.666 | 1.593 | 10.041 | 4.003 | - | - | 38.894 | ||||||||
| Cost of Goods Sold | (7.922) | (25.241) | (1.885) | (9.253) | (3.926) | - | 24.598 | (23.629) | ||||||||
| Gross Profit | 9.045 | 4.449 | 260 | 970 | 745 | - | (204) | 15.265 | ||||||||
| Operating Expenses | (970) | (1.239) | (563) | (678) | (899) | (2.373) | 39 | (6.683) | ||||||||
| Sales, General & Administrative | (173) | (892) | (259) | (593) | (384) | (794) | 39 | (3.056) | ||||||||
| Taxes | (12) | (42) | (26) | (49) | (28) | (142) | - | (299) | ||||||||
| Exploratory Costs | (216) | - | - | - | (439) | - | - | (655) | ||||||||
| Research & Development | (187) | (71) | (40) | (3) | (1) | (74) | - | (376) | ||||||||
| Health and Pension Plans | - | - | - | - | - | (453) | - | (453) | ||||||||
| Other | (382) | (234) | (238) | (33) | (47) | (910) | - | (1.844) | ||||||||
| Operating Profit (Loss) | 8.075 | 3.210 | (303) | 292 | (154) | (2.373) | (165) | 8.582 | ||||||||
| Interest Income (Expenses) | - | - | - | - | - | (950) | - | (950) | ||||||||
| Equity Income | - | 42 | 6 | (4) | 9 | (137) | - | (84) | ||||||||
| Non-operating Income (Expenses) | (3) | 7 | 3 | - | 23 | (3) | - | 27 | ||||||||
| Income (Loss) Before Taxes and Minority | ||||||||||||||||
| Interests | 8.072 | 3.259 | (294) | 288 | (122) | (3.463) | (165) | 7.575 | ||||||||
| Income Tax & Social Contribution | (2.744) | (1.094) | 102 | (99) | (66) | 877 | 56 | (2.968) | ||||||||
| Minority Interests | (232) | (21) | (122) | - | (71) | (30) | - | (476) | ||||||||
| Net Income (Loss) | 5.096 | 2.144 | (314) | 189 | (259) | (2.616) | (109) | 4.131 | ||||||||
Consolidated Result by Business Area - 1Q-2006
| R$ MILLION | ||||||||||||||||
| GAS | ||||||||||||||||
| & | ||||||||||||||||
| E&P | SUPPLY | ENERGY | DISTRIB. | INTERN. | CORPOR. | ELIMIN. | TOTAL | |||||||||
| INCOME STATEMENTS | ||||||||||||||||
| Net Operating Revenues | 18.902 | 29.144 | 2.165 | 9.510 | 2.779 | - | (26.614) | 35.886 | ||||||||
| Intersegments | 17.405 | 7.672 | 693 | 144 | 700 | - | (26.614) | - | ||||||||
| Third Parties | 1.497 | 21.472 | 1.472 | 9.366 | 2.079 | - | - | 35.886 | ||||||||
| Cost of Goods Sold | (7.953) | (25.318) | (1.709) | (8.596) | (1.761) | - | 25.693 | (19.644) | ||||||||
| Gross Profit | 10.949 | 3.826 | 456 | 914 | 1.018 | - | (921) | 16.242 | ||||||||
| Operating Expenses | (426) | (813) | (406) | (669) | (521) | (1.472) | 75 | (4.232) | ||||||||
| Sales, General & Administrative | (219) | (692) | (208) | (582) | (268) | (604) | 45 | (2.528) | ||||||||
| Taxes | (17) | (34) | (15) | (42) | (29) | (103) | - | (240) | ||||||||
| Exploratory Costs | (106) | - | - | - | (204) | - | - | (310) | ||||||||
| Research & Development | (91) | (46) | (15) | (2) | (2) | (86) | - | (242) | ||||||||
| Health and Pension Plan | - | - | - | - | - | (484) | - | (484) | ||||||||
| Other | 7 | (41) | (168) | (43) | (18) | (195) | 30 | (428) | ||||||||
| Operating Profit (Loss) | 10.523 | 3.013 | 50 | 245 | 497 | (1.472) | (846) | 12.010 | ||||||||
| Interest Income (Expenses) | - | - | - | - | - | (444) | - | (444) | ||||||||
| Equity Income | - | 37 | (22) | - | 16 | (457) | - | (426) | ||||||||
| Non-operating Income (Expense) | (87) | (4) | (1) | 2 | (3) | - | - | (93) | ||||||||
| Income (Loss) Before Taxes and Minority | ||||||||||||||||
| Interests | 10.436 | 3.046 | 27 | 247 | 510 | (2.373) | (846) | 11.047 | ||||||||
| Income Tax & Social Contribution | (3.549) | (1.023) | (17) | (84) | (163) | 680 | 288 | (3.868) | ||||||||
| Minority Interests | (113) | (23) | (88) | - | (111) | (169) | - | (504) | ||||||||
| Net Income (Loss) | 6.774 | 2.000 | (78) | 163 | 236 | (1.862) | (558) | 6.675 | ||||||||
25
EBITDA(1) Consolidated Statement by Business Area - 1Q-2007
| R$ MILLION | ||||||||||||||||
| GAS | ||||||||||||||||
| & | ||||||||||||||||
| E&P | SUPPLY | ENERGY | DISTRIB. | INTERN. | CORPOR. | ELIMIN. | TOTAL | |||||||||
| Operating Profit (Loss) | 8.075 | 3.210 | (303) | 292 | (154) | (2.373) | (165) | 8.582 | ||||||||
| Depreciation & Amortization | 1.367 | 391 | 199 | 72 | 287 | 95 | - | 2.411 | ||||||||
| EBITDA (1) | 9.442 | 3.601 | (104) | 364 | 133 | (2.278) | (165) | 10.993 | ||||||||
(1) Operating income before the financial results and equity income + depreciation /amortization.
Statement of Other Operating Revenues (Expenses) - 1Q-2007
| R$ MILLION | ||||||||||||||||
| GAS | ||||||||||||||||
| & | ||||||||||||||||
| E&P | SUPPLY | ENERGY | DISTRIB. | INTERN. | CORPOR. | ELIMIN. | TOTAL | |||||||||
| Expenses with Renegotiation of Petros Fund Plan | (220) | (129) | (11) | (40) | (8) | (632) | - | (1.040) | ||||||||
| Institutional relations and cultural projects | (21) | (15) | - | (7) | - | (247) | - | (290) | ||||||||
| Operating expenses with thermoelectric | - | - | (205) | - | - | - | - | (205) | ||||||||
| Unscheduled stoppages at installations and production equipment | (19) | (41) | - | - | - | - | - | (60) | ||||||||
| Contractual losses from ship-or-pay transport services | - | - | - | - | (15) | - | - | (15) | ||||||||
| Losses and Contingencies related to Legal Proceedings | (6) | (12) | - | 1 | (2) | 9 | - | (10) | ||||||||
| Result from hedge operations | - | 15 | - | - | - | - | - | 15 | ||||||||
| Other | (116) | (52) | (22) | 13 | (22) | (40) | - | (239) | ||||||||
| (382) | (234) | (238) | (33) | (47) | (910) | - | (1.844) | |||||||||
Statement of Other Operating Revenues (Expenses) - 1Q-2006
| R$ MILLION | ||||||||||||||||
| GAS | ||||||||||||||||
| & | ||||||||||||||||
| E&P | SUPPLY | ENERGY | DISTRIB. | INTERN. | CORPOR. | ELIMIN. | TOTAL | |||||||||
| Institutional relations and cultural projects | - | (9) | - | (14) | - | (182) | - | (205) | ||||||||
| Operating expenses with thermoelectric | - | - | (196) | - | - | - | - | (196) | ||||||||
| Unscheduled stoppages at installations and production equipment | (5) | (29) | - | - | - | - | - | (34) | ||||||||
| Contractual losses from ship-or-pay transport services | - | - | - | - | (30) | - | - | (30) | ||||||||
| Losses and Contingencies related to Legal Proceedings | (8) | (11) | - | (2) | (1) | (9) | - | (31) | ||||||||
| Result from hedge operations | - | (12) | 39 | - | - | - | - | 27 | ||||||||
| Other | 20 | 20 | (11) | (27) | 13 | (4) | 30 | 41 | ||||||||
| 7 | (41) | (168) | (43) | (18) | (195) | 30 | (428) | |||||||||
26
Consolidated Assets by Business Area - 03.31.2007
| R$ MILLION | ||||||||||||||||
| GAS | ||||||||||||||||
| & | ||||||||||||||||
| E&P | SUPPLY | ENERGY | DISTRIB. | INTERN. | CORPOR. | ELIMIN. | TOTAL | |||||||||
| ASSETS | 79.698 | 43.897 | 22.230 | 8.048 | 24.434 | 37.570 | (8.306) | 207.571 | ||||||||
| CURRENT ASSETS | 6.918 | 20.910 | 2.922 | 4.307 | 5.692 | 26.659 | (7.743) | 59.665 | ||||||||
| CASH AND CASH EQUIVALENTS | - | - | - | - | - | 20.463 | - | 20.463 | ||||||||
| OTHER | 6.918 | 20.910 | 2.922 | 4.307 | 5.692 | 6.196 | (7.743) | 39.202 | ||||||||
| NON-CURRENT ASSETS | 72.780 | 22.987 | 19.308 | 3.741 | 18.742 | 10.911 | (563) | 147.906 | ||||||||
| LONG-TERM ASSETS | 4.567 | 1.102 | 2.057 | 685 | 1.323 | 8.080 | (559) | 17.255 | ||||||||
| PROPERTY, PLANTS AND EQUIPMENT | 65.338 | 20.655 | 16.223 | 2.630 | 11.877 | 1.576 | (4) | 118.295 | ||||||||
| OTHER | 2.875 | 1.230 | 1.028 | 426 | 5.542 | 1.255 | - | 12.356 | ||||||||
Consolidated Assets by Business Area - 12.31.2006
| R$ MILLION | ||||||||||||||||
| GAS | ||||||||||||||||
| & | ||||||||||||||||
| E&P | SUPPLY | ENERGY | DISTRIB. | INTERN. | CORPOR. | ELIMIN. | TOTAL | |||||||||
| ASSETS | 77.642 | 42.917 | 21.951 | 7.814 | 23.713 | 43.926 | (7.425) | 210.538 | ||||||||
| CURRENT ASSETS | 6.892 | 20.852 | 2.965 | 4.176 | 5.429 | 33.812 | (6.907) | 67.219 | ||||||||
| CASH AND CASH EQUIVALENTS | - | - | - | - | - | 27.829 | - | 27.829 | ||||||||
| OTHER | 6.892 | 20.852 | 2.965 | 4.176 | 5.429 | 5.983 | (6.907) | 39.390 | ||||||||
| NON-CURRENT ASSETS | 70.750 | 22.065 | 18.986 | 3.638 | 18.284 | 10.114 | (518) | 143.319 | ||||||||
| LONG-TERM ASSETS | 4.464 | 1.102 | 2.201 | 596 | 1.023 | 7.493 | (518) | 16.361 | ||||||||
| PROPERTY, PLANTS AND EQUIPMENT | 63.173 | 19.924 | 15.720 | 2.599 | 12.533 | 1.392 | - | 115.341 | ||||||||
| OTHER | 3.113 | 1.039 | 1.065 | 443 | 4.728 | 1.229 | - | 11.617 | ||||||||
27
Consolidated Results – International Business Area - 1Q-2007
| R$ MILLION INTERNATIONAL |
||||||||||||||
| E&P | SUPPLY | GAS |
DISTRIBUTION | CORPOR. | ELIMIN. | TOTAL | ||||||||
| INTERNATIONAL AREA | ||||||||||||||
| ASSETS (03.31.2007) | 17.221 | 5.034 | 4.565 | 749 | 2.155 | (5.290) | 24.434 | |||||||
| Income Statement | ||||||||||||||
| Net Operating Revenues | 1.211 | 2.974 | 634 | 889 | 16 | (1.053) | 4.671 | |||||||
| Intersegments | 914 | 706 | 99 | 2 | - | (1.053) | 668 | |||||||
| Third Parties | 297 | 2.268 | 535 | 887 | 16 | - | 4.003 | |||||||
| Operating Profit (Loss) | (153) | (74) | 195 | 21 | (168) | 25 | (154) | |||||||
| Net Income (Loss) | (239) | (38) | 144 | 17 | (168) | 25 | (259) | |||||||
Consolidated Results – International Business Area
| R$ MILLION INTERNATIONAL |
||||||||||||||
| E&P | SUPPLY | GAS & ENERGY |
DISTRIBUTION | CORPOR. | ELIMIN. | TOTAL | ||||||||
| INTERNATIONAL AREA | ||||||||||||||
| ASSETS (12.31.2006) | 16.351 | 4.967 | 4.483 | 749 | 2.072 | (4.909) | 23.713 | |||||||
| Income Statement (03.31.2006) | ||||||||||||||
| Net Operating Revenues | 1.345 | 1.309 | 622 | 582 | 1 | (1.080) | 2.779 | |||||||
| Intersegments | 869 | 798 | 109 | 4 | - | (1.080) | 700 | |||||||
| Third Parties | 476 | 511 | 513 | 578 | 1 | - | 2.079 | |||||||
| Operating Profit (Loss) | 414 | 45 | 140 | (37) | (124) | 59 | 497 | |||||||
| Net Income (Loss) | 198 | 22 | 79 | (15) | (86) | 38 | 236 | |||||||
28
| PETROBRAS SYSTEM | Appendices | |
1. Petroleum and Alcohol Accounts – STN
In order to settle the accounts with the federal government, in accordance with Provisional Measure No. 2181 of August 24, 2001, Petrobras has already submitted all the information required by the National Treasury (STN) and is in discussion with the latter institution in order to reconcile the differences between the parties.
The account balance of R$ 789 million (R$ 786 million on December 31, 2006) 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 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$ 12,282 million on March 31, 2007.
| R$ million | ||||||||
| First Quarter | ||||||||
| 4Q-2006 | 2007 | 2006 | D% | |||||
| Economic Contribution - Country | ||||||||
| 4.447 | Value Added Tax (ICMS) | 4.132 | 4.085 | 1 | ||||
| 2.033 | CIDE (1) | 1.853 | 1.847 | - | ||||
| 2.914 | PASEP/COFINS | 2.749 | 3.420 | (20) | ||||
| 1.880 | Income Tax & Social Contribution | 2.892 | 2.973 | (3) | ||||
| 644 | Other | 656 | 590 | 11 | ||||
| 11.918 | Subtotal | 12.282 | 12.915 | (5) | ||||
| 923 | Economic Contribution - Foreign | 888 | 843 | 5 | ||||
| 12.841 | Total | 13.170 | 13.758 | (4) | ||||
(1) CIDE – CONTRIBUTION FOR INTERVENTION IN THE ECONOMIC DOMAIN.
3. Government Participations
| R$ million | ||||||||
| First Quarter | ||||||||
| 4Q - 2006 | 2007 | 2006 | D% | |||||
| Country | ||||||||
| 1.842 | Royalties | 1.627 | 1.758 | (7) | ||||
| 2.008 | Special Participation | 1.509 | 2.000 | (25) | ||||
| 26 | Surface Rental Fees | 32 | 24 | 33 | ||||
| 3.876 | Subtotal Country | 3.169 | 3.782 | (16) | ||||
| 312 | Foreign | 299 | 216 | 39 | ||||
| 4.188 | Total | 3.468 | 3.998 | (13) | ||||
Government participation in Brazil declined by 16% in relation to 1Q-2006, due to the 12% decrease in the reference price for local oil, which averaged R$ 98.40 (US$ 46.72), versus R$ 111.80 (US$ 50.93) in 1Q-2006, reflecting the lower average Brent price on the international market, as well as the lower tax rate bracket use to calculate Special Participation, especially in relation to the Marlim and Marlim Sul fields due to the natural decline in production, as well as the scheduled maintenance stoppage in the P-37 (Marlim) platform in January 2007.
29
4. Reconciliation of Consolidated Shareholders’ Equity and Net Income
| R$ million | ||||
| Shareholders' Equity | Result | |||
| . According to PETROBRAS information as of March 31, 2007 | 103.718 | 4.336 | ||
| . Profit in the sales of products in affiliated inventories | (321) | (321) | ||
| . Reversal of profits on inventory in previous years | - | 438 | ||
| . Capitalized interest | (780) | (47) | ||
| . Absorption of negative net worth in affiliated companies * | (267) | (187) | ||
| . Other eliminations | (603) | (88) | ||
| . According to consolidated information as of March 31, 2007 | 101.747 | 4.131 | ||
* 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 reconciling item between the Financial Statements of Petrobras and the Consolidated Financial Statements.
5. Performance of Petrobras Shares and ADRs
| Nominal Change | ||||||
| First Quarter | ||||||
| 4Q-2006 | 2007 | 2006 | ||||
| 20,15% | Petrobras ON | -5,05% | 12,83% | |||
| 22,69% | Petrobras PN | -7,35% | 15,94% | |||
| 22,86% | ADR- Nível III - ON | -3,38% | 21,61% | |||
| 23,94% | ADR- Nível III - PN | -3,68% | 24,05% | |||
| 22,01% | IBOVESPA | 2,99% | 13,44% | |||
| 6,71% | DOW JONES | -0,87% | 3,66% | |||
| 6,95% | NASDAQ | 0,26% | 6,10% | |||
Petrobras’ shares had a book value of R$ 23, 64 per share on March 31, 2007.
6. Dividends and Interest on Equity
The allowance for dividends in the financial statements on December 31, 2006, in the amount of R$ 7,897 million, corresponding to R$ 1.80 (one Real and eighty cents of a Real) per common share and preferred share, includes the installments of interest on capital, the first of which having been approved by the Board of Directors on October 20, 2006 and paid to shareholders on January 4, 2007, in the amount of R$ 4,387 million, corresponding to R$ 1.00 per common and preferred share, based on shareholders’ positions on October 31, 2006, monetarily restated as of December 31, 2006 according to the Selic interest rate. The second installment, approved by the Board of Directors on December 15, 2006, was paid on March 30, 2007, based on shareholders’ positions on December 28, 2006, in the amount of R$ 1,974 million, corresponding to R$ 0.45 per common and preferred share, with monetary restatement of R$ 0.0137 by the Selic interest rate for the period between December 31, 2006 and March 30, 2007. Interest on capital is subject to withholding income tax of 15%, except for shareholders who are exempt from said tax pursuant to Law 9.249/95. A total of R$ 1,535 million will be paid as dividends, equivalent to R$ 0.35 per common and preferred share, as approved by the Board of Directors on February 12, 2007 and ratified by the General Shareholders Meeting of February 12, 2007, based on shareholders’ positions on April 2, 2007.
30
7. Foreign Exchange Exposure
The Petrobras System’s foreign exchange exposure is measured according to the following table:
| Assets | R$ million | |||
| 03.31.2007 | 12.31.2006 | |||
| Current Assets | 21.796 | 25.537 | ||
| Cash and Cash Equivalents | 9.732 | 13.494 | ||
| Other Current Assets | 12.064 | 12.043 | ||
| Non-current Assets | 31.701 | 38.008 | ||
| Long-term Assets | 4.018 | 5.264 | ||
| Investments | 1.254 | 941 | ||
| Property, plant and equipment | 23.186 | 29.338 | ||
| Intangible | 2.613 | 1.446 | ||
| Deferred | 630 | 1.019 | ||
| Total Assets | 53.497 | 63.545 | ||
| Liabilities | R$ million | |||
| 03.31.2007 | 12.31.2006 | |||
| Current Liabilities | 15.656 | 18.286 | ||
| Short-term Debt | 7.415 | 8.948 | ||
| Suppliers | 4.920 | 5.732 | ||
| Other Current Liabilities | 3.321 | 3.606 | ||
| Long-term Liabilities | 23.904 | 26.367 | ||
| Long-term Debt | 22.976 | 23.647 | ||
| Other Long-term Liabilities | 928 | 2.720 | ||
| Total Liabilities | 39.560 | 44.653 | ||
| Net Assets (Liabilities) in Reais | 13.937 | 18.892 | ||
| (+) Investment Funds - Exchange | 1.745 | 3.644 | ||
| (-) FINAME Loans - dollar-indexed reais | 487 | 553 | ||
| Net Assets (Liabilities) in Reais | 15.195 | 21.983 | ||
| Net Assets (Liabilities) in Dollar | 7.411 | 10.282 | ||
| Exchange rate (*) | 2,0504 | 2,1380 | ||
(*) US dollars are converted into Reais at the dollar sell price at the close of the period.
31
| PETROBRAS SYSTEM | Demonstrações Contábeis | |
Income Statement – Parent Company
| R$ million | ||||||
| First Quarter | ||||||
| 4Q-2006 | 2007 | 2006 | ||||
| 41.709 | Gross Operating Revenues | 37.986 | 37.920 | |||
| (11.118) | Sales Deductions | (10.118) | (9.809) | |||
| 30.591 | Net Operating Revenues | 27.868 | 28.111 | |||
| (18.270) | Cost of Products Sold | (15.233) | (14.025) | |||
| 12.321 | Gross Profit | 12.635 | 14.086 | |||
| Operating Expenses | ||||||
| (1.318) | Sales | (1.257) | (1.163) | |||
| (1.135) | General & Administrative | (1.136) | (832) | |||
| (412) | Exploratory Costs | (216) | (106) | |||
| (40) | Impairment | - | - | |||
| (470) | Research & Development | (373) | (240) | |||
| (199) | Taxes | (155) | (116) | |||
| (456) | Benefit expenses | (424) | (456) | |||
| (1.198) | Other | (1.745) | (484) | |||
| (5.228) | (5.306) | (3.397) | ||||
| Net Financial Expense | ||||||
| 970 | Income | 971 | 302 | |||
| (567) | Expense | (588) | (489) | |||
| (628) | Monetary & Foreign Exchange Variation - Assets | (2.112) | (2.463) | |||
| 375 | Monetary & Foreign Exchange Variation - Liabilities | 1.140 | 1.971 | |||
| 150 | (589) | (679) | ||||
| (5.078) | (5.895) | (4.076) | ||||
| (155) | Equity Results | 52 | 343 | |||
| 7.088 | Operating Income | 6.792 | 10.353 | |||
| (27) | Non-operating Income (Expense) | (1) | (85) | |||
| (1.824) | Income Tax & Social Contribution | (2.455) | (3.354) | |||
| 5.237 | Net Income (Loss) | 4.336 | 6.914 | |||
32
| PETROBRAS SYSTEM | Financial Statements | |
Balance Sheet – Parent Company
| Assets | R$ million | |||
| 03.31.2007 | 12.31.2006 | |||
| Current Assets | 43.379 | 49.443 | ||
| Cash and Cash Equivalents | 13.139 | 20.099 | ||
| Accounts Receivable | 11.175 | 10.376 | ||
| Inventories | 12.282 | 12.969 | ||
| Dividends Receivable | 579 | 777 | ||
| Deferred Taxes & Social Contribution | 4.942 | 4.382 | ||
| Other | 1.262 | 840 | ||
| Non-current assets | 137.298 | 130.171 | ||
| Long-term Assets | 49.216 | 45.185 | ||
| Petroleum & Alcohol Account | 789 | 786 | ||
| Subsidiaries and affiliated companies | 37.515 | 34.283 | ||
| Ventures under Negotiation | 1.007 | 928 | ||
| Advances to Suppliers | 514 | 564 | ||
| Advance for Pension Plan Migration | 1.277 | 1.242 | ||
| Deferred Taxes and Social Contribution | 4.335 | 3.763 | ||
| Judicial Deposits | 1.358 | 1.438 | ||
| Antecipated Expenses | 966 | 819 | ||
| Others | 1.455 | 1.362 | ||
| Investments | 23.167 | 22.777 | ||
| Property, plant and equipment | 61.517 | 58.682 | ||
| Intangible | 2.825 | 2.779 | ||
| Deferred | 573 | 748 | ||
| Total Assets | 180.667 | 179.614 | ||
| Liabilities | R$ million | |||
| 03.31.2007 | 12.31.2006 | |||
| Current Liabilities | 47.022 | 50.797 | ||
| Short-term Debt | 1.281 | 1.279 | ||
| Suppliers | 29.278 | 28.900 | ||
| Taxes & Social Contribution Payable | 8.087 | 6.855 | ||
| Dividends / Interest on Own Capital | 1.582 | 7.897 | ||
| Project Finance and Joint Ventures | 1.551 | 1.565 | ||
| Pension fund obligations | 294 | 392 | ||
| Clients Anticipation | 1.751 | 1.120 | ||
| Other | 3.198 | 2.789 | ||
| Long-term Liabilities | 29.937 | 29.435 | ||
| Long-term Debt | 4.820 | 5.094 | ||
| Subsidiaries and affiliated companies | 2.599 | 2.507 | ||
| Pension plan | 3.051 | 2.777 | ||
| Health Care Benefits | 8.085 | 7.769 | ||
| Deferred Taxes & Social Contribution | 7.635 | 7.522 | ||
| Other | 3.747 | 3.766 | ||
| Shareholders' Equity | 103.718 | 99.382 | ||
| Capital | 48.264 | 48.264 | ||
| Capital Reserves | 51.118 | 25.055 | ||
| Net Income | 4.336 | 26.063 | ||
| Total liabilities | 180.667 | 179.614 | ||
In line with international accounting practices, CVM Resolution No. 488 approved Proclamation NPC 27 of the Institute of Independent Auditors of Brazil (IBRACON), which establishes new standards for the presentation and publication of financial statements. According to this proclamation, assets must be classified as “Current” and “Non-current”, the latter further divided into long-term, investments, fixed assets, intangible assets and deferred assets. Liabilities must be classified as “Current” and “Non-current”.
33
Statement of Cash Flow – Parent Company
| R$ million | ||||||
| First Quarter | ||||||
| 4Q-2006 | 2007 | 2006 | ||||
| 5.237 | Net Income (Loss) | 4.336 | 6.914 | |||
| 2.715 | (+) Adjustments | 3.384 | 1.919 | |||
| 1.361 | Depreciation & Amortization | 1.260 | 943 | |||
| (4) | Oil and Alcohol Accounts | (3) | (4) | |||
| 596 | Oil and Oil Products Supply - Foreign | 159 | 1.207 | |||
| 79 | Charges on Financing and Affiliated Companies | 784 | 1.055 | |||
| 683 | Other Adjustments | 1.184 | (1.282) | |||
| 7.952 | (=) Net Cash Generated by Operating Activities | 7.720 | 8.833 | |||
| (5.201) | (-) Cash used for Cap.Expend. | (4.634) | (3.841) | |||
| (2.848) | Investment in E&P | (3.112) | (2.947) | |||
| (1.874) | Investment in Refining & Transport | (1.015) | (545) | |||
| (230) | Investment in Gas and Energy | (298) | (136) | |||
| (100) | Structured Projects Net of Advance | (94) | (153) | |||
| 6 | Dividends | 36 | 171 | |||
| (155) | Other Investments | (151) | (231) | |||
| (2.751) | (=) Free Cash Flow | 3.086 | 4.992 | |||
| (203) | (-) Cash used in Financing Activities | (10.046) | (4.576) | |||
| (2.548) | (=) Cash Generated in the Period | (6.960) | 416 | |||
| 17.551 | Cash at the Beginning of Period | 20.099 | 17.482 | |||
| 20.099 | Cash at the End of Period | 13.139 | 17.898 | |||
34
Statement of Value Added - Parent Company
| R$ million | ||||
| First Quarter | ||||
| 2007 | 2006 | |||
| Description | ||||
| Sale of products and services and non operating income* | 38.320 | 38.104 | ||
| Raw Materials Used | (2.824) | (3.622) | ||
| Products for Resale | (1.889) | (2.217) | ||
| Materials, Energy, Services & Others | (6.043) | (2.577) | ||
| Added Value Generated | 27.564 | 29.688 | ||
| Depreciation & Amortization | (1.260) | (943) | ||
| Participation in subsidiaries, goodwill / discount amortization | 52 | 343 | ||
| Financial Income | 491 | (167) | ||
| Rent and royalties | 98 | 97 | ||
| Total Distributable Added Value | 26.945 | 29.018 | ||
| Distribution of Added Value | ||||
| Personnel | ||||
| Salaries, Benefits and Charges | 2.974 | 2.020 | ||
| 2.974 | 2.020 | |||
| Government Entities | ||||
| Taxes, Fees and Contributions | 13.093 | 12.954 | ||
| Government Participation | 3.169 | 3.782 | ||
| Deferred Income Tax & Social Contribution | 36 | 726 | ||
| 16.298 | 17.462 | |||
| Financial Institutions and Suppliers | ||||
| Interest, FX Rate and Monetary Variations | 1.081 | 511 | ||
| Rent and Freight Expenses | 2.256 | 2.111 | ||
| 3.337 | 2.622 | |||
| Shareholders | ||||
| Net Income | 4.336 | 6.914 | ||
| 4.336 | 6.914 | |||
| Value Added distributed | 26.945 | 29.018 | ||
* Net of Provisions for Doubtful Debts.
35
| PETROBRAS |
| PETROBRAS SYSTEM | |
|
http: //www.petrobras.com.br/ri/english
Contacts:
 |
Petróleo Brasileiro S.A – PETROBRAS
Investor Relations Department
Raul Adalberto de Campos– Executive Manager
E-mail: petroinvest@petrobras.com.br
Av. República do Chile, 65 - 22nd floor
20031-912 – Rio de Janeiro, RJ
(55-21) 3224-1510 / 9947 |
 |
| 0800-282-1540 |
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 must not base their expectations exclusively on the information presented herein.
36
|
PETRÓLEO BRASILEIRO S.A--PETROBRAS |
||
|
By: |
/S/ Almir Guilherme Barbassa
|
|
|
Almir Guilherme Barbassa
Chief Financial Officer and Investor Relations Officer |
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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.