This excerpt taken from the PBR 6-K filed Mar 7, 2008.
The behavior of the main components of consolidated net income, in relation to 2006, was as follows:
A R$ 2,875 million increase in gross profit:
(1) New ANP interpretation of the deductibility of projects financing expenses related to the Marlim field when calculating 2006 special participations.
An increase of R$ 4,521 million in the following operating expenses:
Selling expenses (R$ 269 million), reflecting the increase in export volume (R$ 79 million) and off-shore operations (R$ 166 million);
A negative impact of R$ 2,600 million on the net financial result, due to:
The impact of the increase in the appreciation of the Real from 8% to 17% on funds invested abroad via subsidiaries in the International segment, in E&P equipment for use in Brazil and in commercial activities (R$ 1.972 million);
A reduction in relevant interests (R$ 448 million), primarily due to the increase in exchange losses from the conversion of foreign subsidiaries shareholders equity.
A lower non-operating result (R$ 371 million), primarily from expenses from damage to third-party equipment installed in wells in the Campos Basin (R$ 139 million) and the write-off of E&P-related sunk costs (R$ 103 million).