Our Cash Flow for Petrobras (PBR)

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Petrobras (PBR)

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PBR » Topics » Our Cash Flow

This excerpt taken from the PBR 6-K filed Sep 9, 2009.

Our Cash Flow

On June 30, 2009, we had cash and cash equivalents of U.S.$4,870 million compared to U.S.$6,499 million at December 31, 2008. The decrease in our cash and cash equivalents was primarily due to the increase in our capital expenditures in the first half of 2009 compared to the same period last year.

Operating activities provided net cash flows of U.S.$9,771 million in the first half of 2009 compared to U.S.$12,226 million in the first half of 2008. Cash generated by operating activities was mainly affected by net operating revenues, which decreased U.S.$20,043 million during the first half of 2009 compared to the first half of 2008.

Net cash used in investing activities increased to U.S.$14,863 million in the first half of 2009 compared to U.S.$11,666 million in the first half of 2008. This increase was due primarily to capital expenditures totaling U.S.$14,271 million, including U.S.$6,849 million related to our exploration and production projects in Brazil, mainly in the Campos Basin.

Net cash provided by financing activities was U.S.$2,660 million in the first half of 2009 compared to net cash used in financing activities of U.S.$1,966 million in the first half of 2008. This increase was primarily due to a decrease in dividend payments, an increase in funds raised by PifCo from financial institutions and through the issuance of Global Notes.

Our net debt increased to U.S.$29,769 million as of June 30, 2009 compared to U.S.$20,852 million as of December 31, 2008, primarily due to funds raised by PifCo from financial institutions and through the issuance of Global Notes, mentioned above, as well as a reduction in cash and cash equivalents due to increased capital expenditures. Most of the proceeds were allocated to finance our 2009-2013 Business Plan.


			Percent
			Change
Balance sheet data	June 30, 2009	December	(June 30,	June 30,
		31, 2008	2009 versus	2008
			December
			31, 2008)
(U.S.$ million)
Cash and cash equivalents	4,870	6,499	(25.1)	6,648
Short-term debt	2,182	2,399	(9.0)	1,704
Total long-term debt	24,826	17,562	41.4	16,188
Total project financings	7,120	6,795	4.8	7,306
Total capital lease obligations	511	595	(14.1)	654
Net debt ⁽¹⁾	29,769	20,852	42.8	19,204
Petrobras' shareholders equity ⁽²⁾	79,146	61,909	27.8	82,967
Total capitalization ⁽³⁾	113,785	89,260	27.5	108,819

Reconciliation of Net debt	June 30, 2009	December	June 30,
	June 30, 2009	31, 2008	2008
(U.S.$ million)
Total long-term debt	24,826	17,562	16,188
Plus short-term debt	2,182	2,399	1,704
Plus total project financings	7,120	6,795	7,306
Plus total capital lease obligations	511	595	654
Less cash and cash equivalents	4,870	6,499	6,648
Net debt ⁽¹⁾	29,769	20,852	19,204


(1)		Our net debt is not computed in accordance with U.S. GAAP and should not be considered in isolation or as a substitute for total long-term debt calculated in accordance with U.S. GAAP. Our calculation of net debt may not be comparable to the calculation of net debt by other companies. Management believes that net debt is an appropriate supplemental measure that helps investors assess our liquidity and assists management in targeting leverage improvements. Please see the table above for a reconciliation of net debt to total long-term debt.
(2)		Petrobras' shareholders equity includes adjustments in the amount of U.S.$44 million (gain) on June 30, 2009 and U.S.$37 million (gain) on December 31, 2008, related to “Post-retirement benefit reserves adjustments, net of tax - pension and health care costs”.
(3)		Total capitalization is calculated as Petrobras' shareholders equity plus short-term debt, total long-term debt, total project financings and total capital lease obligations.

This excerpt taken from the PBR 6-K filed Jun 1, 2009.

Our Cash Flow

On March 31, 2009, we had cash and cash equivalents of U.S.$8,126 million compared to U.S.$6,499 million at December 31, 2008. The increase in our cash and cash equivalents was primarily due to an increase in domestic investment securities in the three-month period ended March 31, 2009 compared to December 31, 2008.

Operating activities provided net cash flows of U.S.$5,902 million in the three-month period ended March 31, 2009 compared to U.S.$6,127 million in the three-month period ended March 31, 2008. Cash generated by operating activities was mainly affected by net operating revenues, which decreased U.S.$8,130 million during the three-month period ended March 31, 2009 compared to the three-month period ended March 31, 2008.

Net cash used in investing activities increased to U.S.$6,528 million in the three-month period ended March 31, 2009 compared to U.S.$6,070 million in the three-month period ended March 31, 2008. This increase was due primarily to capital expenditures totaling U.S.$6,330 million, including U.S.$3,144 million related to our exploration and production projects in Brazil, mainly in the Campos Basin.

Net cash provided by financing activities amounted to U.S.$2,192 million in the three-month period ended March 31, 2009 compared to net cash used in financing activities of U.S.$908 million in the three-month period ended March 31, 2008. This increase was primarily due to a decrease in dividend payments and funds raised by PifCo through the issuance of Global Notes.

Our net debt increased to U.S.$21,833 million as of March 31, 2009 compared to U.S.$20,852 million as of December 31, 2008, primarily due to funds raised by PifCo through the issuance of Global Notes, and to pre-shipment export financing. Most of the proceeds were allocated to finance our 2009-2013 Business Plan and our oil imports.


			Percent
			Change
Balance sheet data	March 31,	December	(March 31,	March 31,
	2009	31, 2008	2009 versus	2008
			December
			31, 2008)

	(U.S.$ million)

Cash and cash equivalents	8,126	6,499	25.0	6,201
Short-term debt	2,664	2,399	11.0	1,928
Total long-term debt	20,006	17,562	13.9	14,934
Total project financings	6,712	6,795	(1.2)	6,483
Total capital lease obligations	577	595	(3.0)	708
Net debt ⁽¹⁾	21,833	20,852	4.7	17,852
Shareholders’ equity ⁽²⁾	64,499	61,909	4.2	69,980
Total capitalization ⁽³⁾	94,458	89,260	5.8	94,033
	March 31,	December	March 31,
Reconciliation of Net debt	2009	31, 2008	2008
	(U.S.$ million)
Total long-term debt	20,006	17,562	14,934
Plus short-term debt	2,664	2,399	1,928
Plus total project financings	6,712	6,795	6,483
Plus total capital lease obligations	577	595	708
Less cash and cash equivalents	8,126	6,499	6,201
Net debt ⁽¹⁾	21,833	20,852	17,852

(1)	Our net debt is not computed in accordance with U.S. GAAP and should not be considered in isolation or as a substitute for total long-term debt calculated in accordance with U.S. GAAP. Our calculation of net debt may not be comparable to the calculation of net debt by other companies. Management believes that net debt is an appropriate supplemental measure that helps investors assess our liquidity and assists management in targeting leverage improvements. Please see the table above for a reconciliation of net debt to total long-term debt.
(2)	Shareholders’ equity includes adjustments in the amount of U.S.$38 million (gain) on March 31, 2009 and U.S.$37 million (gain) on December 31, 2008, related to “Post-retirement benefit reserves adjustments, net of tax - pension and health care costs”.
(3)	Total capitalization is calculated as shareholders’ equity plus short-term debt, total long-term debt, total project financings and total capital lease obligations.

This excerpt taken from the PBR 6-K filed Mar 30, 2009.

Our Cash Flow

On December 31, 2008, we had cash and cash equivalents of U.S.$6,499 million compared to U.S.$6,987 million at December 31, 2007. The decrease in our cash and cash equivalents was primarily due to increased capital expenditures during 2008 compared to 2007.

Operating activities provided net cash flows of U.S.$28,220 million for 2008 compared to U.S.$22,664 million for 2007. Cash generated by operating activities was mainly affected by net operating revenues, which increased U.S.$30,522 million during 2008 compared to 2007.

Net cash used in investing activities increased to U.S.$29,466 million for 2008 compared to U.S.$24,026 million for 2007. This increase was due primarily to capital expenditures totaling U.S.$29,874 million, including U.S.$14,293 million related to exploration and production projects in Brazil, mainly in the Campos basin.

Net cash provided by financing activities amounted U.S.$2,778 million for 2008 compared to net cash used in financing activities of U.S.$5,988 million for 2007. This increase was primarily due to funds raised by PifCo through the issuance of Global Notes and proceeds from project financing, primarily from the Gasene, Codajás and Companhia de Desenvolvimento e Modernização de Plantas Industriais - CDMPI projects. See Notes 12 and 14 of our consolidated financial statements for the year ended December 31, 2008.

Our net debt increased to U.S.$20,852 million as of December 31, 2008 compared to U.S.$14,908 million as of December 31, 2007, primarily due to increased long-term debt, credit lines taken out to boost ethanol exports, funds raised by PifCo through the issuance of Global Notes, and increased project financing proceeds, as well as a reduction in cash and cash equivalents due to increased capital expenditures. The following table shows the reconciliation of net debt to total long-term debt:


Balance sheet data	December 31, 2008	December 31, 2007	Percent Change (December 31, 2008 versus December 31, 2007)
(U.S.$ Million)

Cash and cash equivalents	6,499	6,987	(7.0)
Short-term debt	2,399	1,458	30.2
Total long-term debt	17,562	13,421	34.6
Total project financings	6,795	6,278	8.2
Total capital lease obligations	595	738	(19.4)
Net debt ⁽¹⁾	20,852	14,908	39.9
Shareholders’ equity ⁽²⁾	61,909	65,179	(5.0)
Total capitalization ⁽³⁾	89,260	87,074	2.5


Reconciliation of Net debt	December 31, 2008	December 31, 2007
(U.S.$ Million)
Total long-term debt	17,562	13,421
Plus short-term debt	2,399	1,458
Plus total project financings	6,795	6,278
Plus total capital lease obligations	595	738
Less cash and cash equivalents	6,499	6,987
Net debt ⁽¹⁾	20,852	14,908

(2) Shareholders’ equity includes adjustments in the amount of U.S.$37 million (gain) on December 31, 2008, and U.S.$2,472 million (loss) on December 31, 2007, related to “Post-retirement benefit reserves adjustments, net of tax - pension and health care costs”. This gain is due to a change in the discount rate from 6% in 2007 to 7.7% in 2008 (See Note 16 (f) to our consolidated financial statements for the year ended December 31, 2008).

(3) Total capitalization is calculated as shareholders’ equity plus short-term debt, total long-term debt, total project financings and total capital lease obligations.

This excerpt taken from the PBR 6-K filed Nov 28, 2008.

Our Cash Flow

On September 30, 2008, we had cash and cash equivalents of U.S.$5,282 million compared to U.S.$6,987 million at December 31, 2007. The decrease in our cash and cash equivalents was primarily due to increased capital expenditures in the nine-month period ended September 30, 2008, compared to the nine-month period ended September 30, 2007.

Operating activities provided net cash flows of U.S.$20,030 million in the nine-month period ended September 30, 2008, compared to U.S.$15,919 million in the nine-month period ended September 30, 2007. Cash generated by operating activities was affected by net operating revenues, which increased to U.S.$33,509 million during the nine-month period ended September 30, 2008.

Net cash used in investing activities increased to U.S.$19,696 million in the nine-month period ended September 30, 2008, compared to U.S.$15,700 million in the nine-month period ended September 30, 2007. This increase was due primarily to capital expenditures totaling U.S.$20,057 million, including U.S.$10,173 million related to our exploration and production projects in Brazil, mainly in the Campos basin.

Net cash used in financing activities was U.S.$1,445 million in the nine-month period ended September 30, 2008, compared to U.S.$6,666 million in the nine-month period ended September 30, 2007. This decrease was primarily due to an increase in the funds raised by PifCo through the issuance of Global Notes, and to increased proceeds from project financing, primarily from the Gasene, Codajás and Cia. de Desenvolvimento e Modernização de Plantas Industriais - CDMPI projects.

Our net debt increased to U.S.$19,494 million as of September 30, 2008, compared to U.S.$14,908 million as of December 31, 2007, primarily due to increased short-term debt, from credit lines taken out to boost ethanol exports, funds raised by PifCo through the issuance of Global Notes, and increased project financing proceeds, as well as a reduction in cash and cash equivalents due to the payment of interest on equity and increased capital expenditures. The following table shows the reconciliation of net debt to total long-term debt:


Balance sheet data	September 30, 2008	December 31, 2007	Percent Change (September 30, 2008 versus December 31, 2007)	September 30, 2007

(U.S.$ million)

Cash and cash equivalents	5,282	6,987	(24.4)	7,421
Short-term debt	1,913	1,458	31.2	844
Total long-term debt	15,162	13,421	13.0	12,697
Total project financings	7,135	6,278	13.7	6,093
Total capital lease obligations	566	738	(23.3)	765
Net debt ⁽¹⁾	19,494	14,908	30.8	12,978
Shareholders’ equity ⁽²⁾	74,599	65,179	14.5	59,647
Total capitalization ⁽³⁾	99,375	87,074	14.1	80,046


Reconciliation of Net debt	September 30, 2008	December 31, 2007	September 30, 2007
(U.S.$ million)
Total long-term debt	15,162	13,421	12,697
Plus short-term debt	1,913	1,458	844
Plus total project financings	7,135	6,278	6,093
Plus total capital lease obligations	566	738	765
Less cash and cash equivalents	5,282	6,987	7,421
Net debt ⁽¹⁾	19,494	14,908	12,978

(1)	Our net debt is not computed in accordance with U.S. GAAP and should not be considered in isolation or as a substitute for total long-term debt calculated in accordance with U.S. GAAP. Our calculation of net debt may not be comparable to the calculation of net debt by other companies. Management believes that net debt is an appropriate supplemental measure that helps investors assess our liquidity and assists management in targeting leverage improvements. Please see the table above for a reconciliation of net debt to total long-term debt.
(2)	Shareholders’ equity includes adjustments in the amount of U.S.$2,289 million on September 30, 2008 and U.S.$2,472 million on December 31, 2007, related to “Post-retirement benefit reserves adjustments, net of tax - pension and health care costs”.
(3)	Total capitalization is calculated as shareholders’ equity plus short-term debt, total long-term debt, total project financings and total capital lease obligations.

The 30.8% increase in our net debt as of September 30, 2008, compared to our net debt as of December 31, 2007, was primarily attributable to the issuance by PifCo of securities in the international capital markets, increased project financings and a reduction in cash and cash equivalents due to the increased capital expenditures.

This excerpt taken from the PBR 6-K filed Sep 4, 2008.

Our Cash Flow

On June 30, 2008, we had cash and cash equivalents of U.S.$6,648 million compared to U.S.$6,987 million at December 31, 2007. The decrease in our cash and cash equivalents was primarily due to the increase in our capital expenditures in the first half of 2008 as compared to the first half of 2007.

Operating activities provided net cash flows of U.S.$12,591 million in the first half of 2008, compared to U.S.$10,678 million in the first half of 2007. Cash generated by operating activities was mainly affected by our net operating revenues that increased U.S.$20,873 million during the first half of 2008 as compared to the first half of 2007.

Net cash used in investing activities increased to U.S.$12,031 million in the first half of 2008, compared to U.S.$9,036 million in the first half of 2007. This increase was due primarily to capital expenditures associated with our operating activities, which totaled U.S.$12,164 million, including U.S.$7,055 million related to our exploration and production projects in Brazil, mainly in the Campos basin.

Net cash used in financing activities was U.S.$1,966 million in the first half of 2008, compared to U.S.$6,220 million in the first half of 2007. This decrease was primarily due to an increase in the funds raised by PifCo through the issuance of Global Notes, and to the increase in proceeds from project financing, mainly in Gasene, Codajás and Cia. de Desenvolvimento e Modernização de Plantas Industriais - CDMPI projects.

Our net debt increased to U.S.$19,204 million as of June 30, 2008 as compared to U.S.$14,908 million as of December 31, 2007, primarily due to an increase in short-term debt, particularly from credit lines taken out to boost ethanol exports, and the funds raised by PifCo through the issuance of Global Notes, an increase in project financing proceeds, mentioned above, as well as a reduction in cash and cash equivalents due to the payment of interest on equity and the increase in our capital expenditures. See table below for a reconciliation of net debt to total long-term debt:


	U.S.$ million
			Percent
			Change
Balance sheet data	06.30.2008	12.31.2007	(06.30.2008	06.30.2007
			versus
			12.31.2007)



Cash and cash equivalents	6,648	6,987	(4.9)	9,007
Short-term debt	1,704	1,458	16.9	1,088
Total long-term debt	16,188	13,421	20.6	12,269
Total project financings	7,306	6,278	16.4	5,777
Total capital lease obligations	654	738	(11.4)	908
Net debt ⁽¹⁾	19,204	14,908	28.8	11,035
Shareholders’ equity ⁽²⁾	82,967	65,179	27.3	54,767
Total capitalization ⁽³⁾	108,819	87,074	25.0	74,809

	U.S.$ million
Reconciliation of Net debt	06.30.2008	12.31.2007	06.30.2007
Total long-term debt	16,188	13,421	12,269
Plus short-term debt	1,704	1,458	1,088
Plus total project financings	7,306	6,278	5,777
Plus total capital lease obligations	654	738	908
Less cash and cash equivalents	6,648	6,987	9,007
Net debt ⁽¹⁾	19,204	14,908	11,035

(1) Our net debt is not computed in accordance with U.S. GAAP and should not be considered in isolation or as a substitute for total long-term debt calculated in accordance with U.S. GAAP. Our calculation of net debt may not be comparable to the calculation of net debt by other companies. Management believes that net debt is an appropriate supplemental measure that helps investors assess our liquidity and assists management in targeting leverage improvements. Please see the table above for a reconciliation of net debt to total long-term debt.
(2) Shareholders’ equity includes obligation adjustments in the amount of U.S.$1,715 million at June 30, 2008 and U.S.$1,544 million at December 31, 2007, related to “Post-retirement benefit reserves adjustments, net of tax - pension cost”; and U.S.$1,032 million at June 30, 2008 and U.S.$928 million at December 31, 2007, related to “Post-retirement benefit reserves adjustments, net of tax - health care cost”.
(3) Total capitalization is calculated as shareholders’ equity plus short-term debt, total long-term debt, total project financings and total capital lease obligations.

Our net debt increased 28.8% in the first half of 2008, as compared to the year ended December 31, 2007, primarily due to proceeds from our long-term debt and project financing, incurred in order to achieve our needs of capital expenditures during 2008.

This excerpt taken from the PBR 6-K filed May 22, 2008.

Our Cash Flow

On March 31, 2008 we had cash and cash equivalents of U.S.$6,201 million compared to U.S.$6,987 million at December 31, 2007. The decrease in our cash and cash equivalents was primarily due to the increase in our capital expenditures in the first quarter of 2008 as compared to the first quarter of 2007.

Operating activities provided net cash flows of U.S.$6,127 million for the first quarter of 2008, compared to U.S.$3,463 million for the first quarter of 2007. Cash generated by operating activities was mainly affected by net operating revenues that increased U.S.$7,942 million during the first quarter of 2008 as compared to the first quarter of 2007. See analysis of results of operations on page 14.

Net cash used in investing activities increased to U.S.$6,070 million for the first quarter of 2008, compared to U.S.$3,545 million for the first quarter of 2007. This increase was due primarily to capital expenditures associated with our operating activities, which totaled U.S.$6,097 million, including U.S.$3,480 million related to our exploration and production projects in Brazil, mainly in the Campos basin.

Net cash used in financing activities was U.S.$908 million for the first quarter of 2008, compared to U.S.$3,278 million for the first quarter of 2007. This decrease was primarily due to an increase in the funds raised by PifCo through the issuance of Global Notes.

Our net debt increased to U.S.$17,852 million as of March 31, 2008 as compared to U.S.$14,908 million as of December 31, 2007, primarily due to an increase in short-term debt, particularly from credit lines taken out to boost ethanol exports, and the funds raised by PifCo through the issuance of Global Notes as well as a reduction in cash and cash equivalents due to the payment of interest on equity.


		U.S.$ million
			Percent
			Change
Balance sheet data	03.31.2008	12.31.2007	(03.31.2008	03.31.2007
			versus
			12.31.2007)

Cash and cash equivalents	6,201	6,987	(11.2)	9,667
Short-term debt	1,928	1,458	32.2	1,347
Total long-term debt	14,934	13,421	11.3	12,027
Total project financings	6,483	6,278	3.3	6,898
Total capital lease obligations	708	738	(4.1)	964
Net debt ⁽¹⁾	17,852	14,908	19.7	11,569
Shareholders’ equity ⁽²⁾	69,980	65,179	7.4	48,319
Total capitalization ⁽³⁾	94,033	87,074	8.0	69,555

	U.S.$ million
Reconciliation of Net debt	03.31.2008	12.31.2007	03.31.2007
Total long-term debt	14,934	13,421	12,027
Plus short-term debt	1,928	1,458	1,347
Plus total project financings	6,483	6,278	6,898
Plus total capital lease obligations	708	738	964
Less cash and cash equivalents	6,201	6,987	9,667
Net debt ⁽¹⁾	17,852	14,908	11,569


(1)		Our net debt is not computed in accordance with U.S. GAAP and should not be considered in isolation or as a substitute for total long-term debt calculated in accordance with U.S. GAAP. Our calculation of net debt may not be comparable to the calculation of net debt by other companies. Management believes that net debt is an appropriate supplemental measure that helps investors assess our liquidity and assists management in targeting leverage improvements. Please see the table above for a reconciliation of net debt to total long-term debt.


(2)		Shareholders’ equity includes obligation adjustments in the amount of U.S.$1,563 million at March 31, 2008 and U.S.$1,544 million at December 31, 2007, respectively, related to “Post-retirement benefit reserves adjustments, net of tax - pension cost”; and U.S.$939 million at March 31, 2008 and U.S.$928 million at December 31, 2007 related to “Post-retirement benefit reserves adjustments, net of tax - health care cost”.

(3)		Total capitalization is calculated as shareholders’ equity plus short-term debt, total long-term debt, total project financings and total capital lease obligations.

This excerpt taken from the PBR 6-K filed Mar 18, 2008.

Our Cash Flow

On December 31, 2007, we had cash and cash equivalents of U.S.$6,987 million compared to U.S.$12,688 million at December 31, 2006. The decrease in our cash and cash equivalents was primarily due to: dividend payments; the acquisition of long-term securities to guarantee liabilities with the Petros pension fund; payments resulting from the amendments to the Petros Plan regulations, and the increase in our capital expenditures during 2007 as compared to 2006.

Operating activities provided net cash flows of U.S.$22,664 million for 2007, compared to U.S.$21,077 million for 2006. Cash generated by operating activities was mainly affected by net operating revenues that increased U.S.$15,388 million during 2007 as compared to 2006. See analysis of results of operations on page 15.

Net cash used in investing activities increased to U.S.$24,026 million for 2007, compared to U.S.$14,681 million for 2006. This increase was due primarily to capital expenditures associated with our operating activities, which used U.S.$20,978 million, including U.S.$9,448 million related to our exploration and production projects in Brazil, mainly in the Campos basin, and to acquire B Series National Treasury Notes in the amount of U.S.$1,907 million in order to match future pension obligations to guarantee future long term agreements.

Net cash used in financing activities was U.S.$5,988 million for 2007, compared to U.S.$4,354 million for 2006. This increase was primarily due to an increase in the amount of dividends paid to shareholders in 2007 as compared to 2006.

Our net debt increased to U.S.$14,908 million as of December 31, 2007 as compared to U.S.$8,650 million as of December 31, 2006, primarily due to a decrease in our cash and cash equivalents. This decrease was largely a result of: dividend payments; the acquisition of long-term securities to more closely match our liabilities associated with the Petros pension fund; payments resulting from the amendments to the Petros Plan regulations, and the increase in our capital expenditures during 2007 as compared to 2006.


	U.S.$ million
Balance sheet data	12.31.2007	12.31.2006	Percent Change (12.31.2007 versus 12.31.2006)

Cash and cash equivalents	6,987	12,688	(44.9)
Short-term debt	1,458	1,293	12.8
Total long-term debt	13,421	12,616	6.4
Total project financings	6,278	6,374	(1.5)
Total capital lease obligations	738	1,055	(30.0)
Net debt ⁽¹⁾	14,908	8,650	72.3
Shareholders’ equity ⁽²⁾	65,179	44,299	47.1
Total capitalization ⁽³⁾	87,074	65,637	32.7


	U.S.$ million
Reconciliation of Net debt	12.31.2007	12.31.2006
Total long-term debt	13,421	12,616
Plus short-term debt	1,458	1,293
Plus total project financings	6,278	6,374
Plus total capital lease obligations	738	1,055
Less cash and cash equivalents	6,987	12,688
Net debt ⁽¹⁾	14,908	8,650

(1)	Our net debt is not computed in accordance with U.S. GAAP and should not be considered in isolation or as a substitute for total long-term debt calculated in accordance with U.S. GAAP. Our calculation of net debt may not be comparable to the calculation of net debt by other companies. Management believes that net debt is an appropriate supplemental measure that helps investors assess our liquidity and assists management in targeting leverage improvements. Please see the table above for a reconciliation of net debt to total long-term debt.

(2)	Shareholders’ equity includes obligation adjustments in the amount of U.S.$1,544 million at December 31, 2007 and U.S.$2,052 million at December 31, 2006 related to “Post-retirement benefit reserves adjustments, net of tax - pension cost”; and U.S.$928 million at December 31, 2007 and U.S.$987 million December 31, 2006 related to “Post-retirement benefit reserves adjustments, net of tax - health care cost”.

(3)	Total capitalization is calculated as shareholders’ equity plus short-term debt, total long-term debt, total project financings and total capital lease obligations.

This excerpt taken from the PBR 6-K filed Nov 29, 2007.

Our Cash Flow

On September 30, 2007, we had cash and cash equivalents of U.S.$ 7,421 million as compared to U.S.$ 12,688 million at December 31, 2006. The decrease in our cash and cash equivalents was primarily as a result of: dividend payments during the nine-month period ended September 30, 2007; the acquisition of long-term securities to set against the liabilities with Petros during the nine-month period ended September 30, 2007; and the increase in our capital expenditures during the nine-month period ended September 30, 2007 as compared to the nine-month period ended September 30, 2006.

Operating activities provided net cash flows of U.S.$ 15,919 million for the nine-month period ended September 30, 2007, as compared to U.S.$ 15,438 million for the nine-month period ended September 30, 2006, remaining relatively constant.

Net cash used in investing activities increased to U.S.$ 15,700 million for the nine-month period ended September 30, 2007, as compared to U.S.$ 9,639 million for the nine-month period ended September 30, 2006. This increase was due primarily to our capital expenditures associated with our operating activities, which used U.S.$ 14,005 million, including U.S.$ 7,837 million related to our exploration and production projects in Brazil, mainly in the Campos basin, and to acquisition of B Series National Treasury Notes in the amount of U.S.$ 1,588 in order to guarantee future long term agreements related to pension obligation.

Net cash used in financing activities was U.S.$ 6,666 million for the nine-month period ended September 30, 2007, as compared to net cash used in financing activities in the amount of U.S.$ 5,205 million for the nine-month period ended September 30, 2006. This increase was primarily due to an increase in the amount of dividends paid to shareholders, in the nine-month period ended September 30, 2007 as compared to the same period of 2006.

This excerpt taken from the PBR 6-K filed Sep 6, 2007.

Our Cash Flow

On June 30, 2007, we had cash and cash equivalents of U.S.$ 9,007 million as compared to U.S.$ 12,688 million at December 31, 2006. The decrease in our cash and cash equivalents was primarily as a result of: dividend payments during the first half of 2007 and the increase in our capital expenditures during the first half of 2007 as compared to the first half of 2006.

Operating activities provided net cash flows of U.S.$ 10,678 million for the first half of 2007, as compared to U.S.$ 9,182 million for the first half of 2006. Cash generated by operating activities was mainly affected by net operating revenues that increased U.S.$ 5,443 million during the first half of 2007 as compared to the first half of 2006. See analysis of results of operations on page 9.

Net cash used in investing activities increased to U.S.$ 9,036 million for the first half of 2007, as compared to U.S.$ 5,778 million for the first half of 2006. This increase was due primarily to our capital expenditures associated with our operating activities, which used U.S.$ 8,867 million, including U.S.$4,676 million related to our exploration and production projects in Brazil, mainly in the Campos basin.

Net cash used in financing activities was U.S.$ 6,220 million for the first half of 2007, as compared to net cash used in financing activities in the amount of U.S.$ 3,553 million for the first half of 2006 This increase was primarily due to an increase in the amount of dividends paid to shareholders, in the first half of 2007 as compared to the same period of 2006.

This excerpt taken from the PBR 6-K filed Jun 13, 2007.

Our Cash Flow

On March 31, 2007, we had cash and cash equivalents of U.S.$ 9,667 million as compared to U.S.$ 12,688 million at December 31, 2006.

Operating activities provided net cash flows of U.S.$ 3,463 million for the first quarter of 2007, as compared to U.S.$ 4,924 million for the first quarter of 2006. Cash generated by operating activities was mainly affected by the decrease in net income due to increases in operating expenses during the first quarter of 2007 as compared to the first quarter of 2006. See analyzes of results of operations on page 9.

Net cash used in investing activities increased to U.S.$ 3,545 million for the first quarter of 2007, as compared to U.S.$ 2,686 million for the first quarter of 2006. This increase was due primarily to our capital expenditures associated with our operating activities, which used U.S.$ 3,674 million, including U.S.$1,811 million related to our exploration and production projects in Brazil, mainly in the Campos basin.

Financing activities used net cash of U.S.$ 3,278 million for the first quarter of 2007, as compared to net cash used in financing activities in the amount of U.S.$ 2,320 million for the first quarter of 2006 This increase was primarily due to an increase in the amount of dividends paid to shareholders, in the first quarter of 2007 as compared to the same period of 2006.

This excerpt taken from the PBR 6-K filed Apr 10, 2007.

Our Cash Flow

On December 31, 2006, we had cash and cash equivalents of U.S.$ 12,688 million as compared to U.S.$ 9,871 million at December 31, 2005.

Operating activities provided net cash flows of U.S.$ 21,077 million for 2006, as compared to U.S.$15,115 million for 2005. Cash generated by operating activities was mainly affected by net operating revenues that increased U.S.$ 16,023 million, primarily due to an increase in sales volume and in prices in both the domestic market and outside of Brazil.

Net cash used in investing activities increased to U.S.$ 14,681 million for 2006, as compared to U.S.$ 10,207 million for 2005. This increase was due primarily to our capital expenditures associated with our operating activities, which used U.S.$ 14,643 million, including U.S.$ 7,329 million related to our exploration and production projects in Brazil, mainly in the Campos basin.

Financing activities used net cash of U.S.$ 4,354 million for 2006, as compared to net cash used in financing activities in the amount of U.S.$ 2,625 million for 2005. This increase was primarily due to an increase in the amount of dividends paid to shareholders, in 2006 as compared to 2005, and to the debt repurchase tender offer of notes of PIFCo, in the amount of U.S.$ 1,046 million.

This excerpt taken from the PBR 6-K filed Nov 28, 2006.

Our Cash Flow

On September 30, 2006, we had cash and cash equivalents of U.S.$ 11,097 million as compared to U.S.$ 9,871 million at December 31, 2005.

Operating activities provided net cash flows of U.S.$ 15,673 million for the nine-month period ended September 30, 2006, as compared to U.S.$10,809 million for the nine-month period ended September 30, 2005. Cash generated by operating activities was mainly affected by net operating revenues that increased U.S.$ 13,266 million, primarily due to an increase in sales volume and in prices in both the domestic market and outside of Brazil.

Net cash used in investing activities increased to U.S.$ 9,874 million for the nine-month period ended September 30, 2006, as compared to U.S.$ 6,911 million for the nine-month period ended September 30, 2005. This increase was due primarily to our capital expenditures associated with our operating activities, which used U.S.$ 9,598 million, including U.S.$ 5,806 million related to our exploration and production projects, principally in the Campos basin.

Financing activities used net cash of U.S.$ 5,205 million for the nine-month period ended September 30, 2006, as compared to net cash used in financing activities in the amount of U.S.$ 2,450 million for the nine-month period ended September 30, 2005. This increase was primarily due to an increase in the amount of dividends paid to shareholders, in the nine-month period ended September 30, 2006 as compared to the same period in 2005.

This excerpt taken from the PBR 6-K filed Sep 6, 2006.

Our Cash Flow

On June 30, 2006, we had cash and cash equivalents of U.S.$ 10,385 million as compared to U.S.$ 9,871 million at December 31, 2005.

Operating activities provided net cash flows of U.S.$ 9,182 million for the first half of 2006, as compared to U.S.$ 6,877 million for the first half of 2005. Cash generated by operating activities was mainly affected by net operating revenues that increased U.S.$ 9,093 million, primarily due to an increase in sales volume and in prices in both the domestic market and outside Brazil.

Net cash used in investing activities increased to U.S.$ 5,778 million for the first half of 2006, as compared to U.S.$ 4,516 million for the first half of 2005. This increase was due primarily to our capital expenditures associated with our operating activities, which used U.S.$ 5,979 million, including U.S.$ 3,476 million related to our exploration and production projects, principally in the Campos basin.

Financing activities used net cash of U.S.$ 3,553 million for the first half of 2006, as compared to net cash used in financings activities in the amount of U.S.$ 2,588 million for the first half of 2005. This increase was primarily due to an increase in the amount of dividends paid to shareholders, in the first half of 2006 as compared to the same period in 2005.

This excerpt taken from the PBR 6-K filed Jun 28, 2006.

Our Cash Flow

On March 31, 2006, we had cash and cash equivalents of U.S.$ 10,418 million as compared to U.S.$ 9,871 million at December 31, 2005.

Operating activities provided net cash flows of U.S.$ 4,924 million for the first quarter of 2006, as compared to U.S.$ 3,580 million for the first quarter of 2005. Cash generated by operating activities was mainly affected by net operating revenues that increased U.S.$ 5,480 million, primarily due to an increase in sales volume and in prices in both the domestic market and outside Brazil and an increase of exports of oil and oil products.

Net cash used in investing activities increased to U.S.$ 2,686 million for the first quarter of 2006, as compared to U.S.$ 2,191 million for the first quarter of 2005. This increase was due primarily to our capital expenditures associated with our operating activities, which used U.S.$ 2,666 million, including U.S.$ 1,565 million related to our exploration and production projects, principally in the Campos Basin.

Financing activities used net cash of U.S.$ 2,320 million for the first quarter of 2006, as compared to providing net cash used in financings activities in the amount of U.S.$ 1,655 million for the first quarter of 2005. This increase was primarily due to an increase in payments of project financing and the increase in the amount of dividends paid to shareholders, in the first quarter of 2006 as compared to the same period in 2005.

This excerpt taken from the PBR 6-K filed Mar 21, 2006.

Our Cash Flow

At December 31, 2005, we had cash and cash equivalents of U.S.$ 9,871 million as compared to U.S.$ 6,856 million at December 31, 2004.

Operating activities provided net cash flows of U.S.$ 15,115 million in 2005, as compared to U.S.$ 8,155 million in 2004. Major effects to cash generated by operating activities were net operating revenues that increased U.S.$ 17,896 million, primarily due to an increase in sales volume in the domestic market, an increase in prices in both the domestic market and outside Brazil and an increase of exports of oil and oil products.

Net cash used in investing activities increased to U.S.$10,207 million in 2005, as compared to U.S.$ 7,743 million in 2004. This increase was due primarily to our investments in capital expenditures associated with our operating activities, which used U.S.$ 10,365 million of cash including U.S.$ 6,127 million in relation to our exploration and production projects, principally in the Campos Basin.

Financing activities used net cash of U.S.$ 2,625 million in 2005, as compared to providing net cash in the amount of U.S.$ 2,204 million in 2004. Levels of financing activities for year ended December 31, 2005 and 2004 remained significantly unchanged. Dividends paid in the year ended December 31, 2005 were U.S.$ 2,110 million.

Short-Term Debt

Our outstanding short-term debt serves mainly to support our imports of crude oil and oil products, and is provided almost completely by international banks and under our commercial paper program. At December 31, 2005, our short-term debt (excluding current portions of long-term obligations) increased to U.S.$ 950 million as compared to U.S.$ 547 million at December 31, 2004. This increased use of short-term credit facilities was due to advantageous market conditions in Argentina.

Long-Term Debt

Our outstanding long-term debt consists primarily of the issuance of securities in the international capital markets, debentures in the domestic capital markets, amounts outstanding under facilities guaranteed by export credit agencies and multilateral agencies and financing from the Banco Nacional de Desenvolvimento Econômico e Social (the Brazilian National Development Bank, or BNDES) and other financial institutions. Outstanding long-term debt, plus the current portion of our long-term debt, totaled U.S.$ 12,931 million at December 31, 2005, as compared to U.S.$ 13,344 million at December 31, 2004. This decrease was a result of our decision to pay down some of our long-term obligations.

Included in these figures at December 31, 2005 are the following international debt issues:

Notes

Principal Amount

10.00% Notes due 2006
6.625% Step Down Notes due 2007(1)
9.125% Notes due 2007(2)
9.875% Notes due 2008(2)
6.750% Senior Trust Certificates due 2010(3)
Floating Rate Senior Trust Certificates due 2010(3)
9.750% Notes due 2011(2)
6.600% Senior Trust Certificates due 2011(3)
Floating Rate Senior Trust Certificates due 2013(3)
4.750% Senior Exchangeable Notes due 2007(4)
Global Step-up Notes due 2008(5)
9.125% Global Notes due 2013(6)
8.375% Global Notes due 2018(6)
3.748% Senior Trust Certificates due 2013(3)
6.436% Senior Trust Certificates due 2015 (3)
9.375% Notes due 2013(7)
7.75% Global Notes due 2014(2)

U.S.$ 250 million
EUR 134 million
U.S.$ 500 million
U.S.$ 450 million
U.S.$ 95 million
U.S.$ 55 million
U.S.$ 600 million
U.S.$ 300 million
U.S.$ 300 million
U.S.$ 338 million
U.S.$ 400 million
U.S.$ 750 million
U.S.$ 750 million
U.S.$ 200 million
U.S.$ 550 million
U.S.$ 100 million
U.S.$ 600 million

(1)	Euro; U.S.$ 1.1825 = EUR 1.00 at December 31, 2005.
(2)	Issued by PIFCo, with support from us through a standby purchase agreement and with insurance against 18 months of inconvertibility and transfer risk for interest payments.
(3)	Issued by PIFCo in connection with a financing program supported by future sales of bunker fuel and fuel oil.
(4)	Issued by PIFCo on October 17, 2002 in connection with our acquisition of PEPSA.
(5)	The Global Step-up Notes bear interest from March 31, 2003 at a rate of 9.00 % per year until April 1, 2006 and at rate of 12.375% per year thereafter, with interest payable semi-annually. Issued by PIFCo, with support from us through a standby purchase agreement.
(6)	Issued by PIFCo for general corporate purposes, with support from us through a standby purchase agreement.
(7)	Issued by PEPSA on October 31, 2003 to cancel existing liabilities.

Project financings

Since 1997, we have utilized project financings to provide capital for our large exploration and production and related projects, including some natural gas processing and transportation systems. All of these projects, and the related debt obligations of special purpose companies established for these financings, are on-balance sheet and accounted for under the line item “Project Financings”. Under typical contractual arrangements, we are responsible for completing the development of the oil and gas fields, operating the fields, paying all operating expenses relating to the projects and remitting a portion of the net proceeds generated from the fields to fund the special purpose companies’ debt and return on equity payments. At the end of each financing project, we have the option to purchase the project assets from the special purpose company or, in some cases, acquire control over the special purpose company itself.

Outstanding project financings, plus the current portion of our project financings, totaled U.S.$ 6,042 million at December 31, 2005, as compared to U.S.$ 5,712 million at December 31, 2004.

Extinguished securities

At December 31, 2005 and 2004, we had amounts invested abroad in an exclusive investment fund that held debt securities of some of our group companies in the amount of U.S.$ 2,078 million and U.S.$ 2,013 million, respectively. Once these securities are purchased by the fund, the related amounts, together with applicable interest are removed from the presentation of marketable securities and long-term debt. See Note 13 to our consolidated financial statements for the year ended December 31, 2005.

Off Balance Sheet Arrangements

At December 31, 2005, we had no off-balance sheet arrangements that have, or are reasonably likely to have, a material effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

This excerpt taken from the PBR 6-K filed Nov 23, 2005.

Our Cash Flow

At September 30, 2005, we had cash and cash equivalents of U.S.$ 9,412 million as compared to U.S.$ 5,814 million at September 30, 2004.

Operating activities provided net cash flows of U.S.$ 10,809 million for the nine-month period ended September 30, 2005, as compared to U.S.$ 5,032 million for the nine-month period ended September 30, 2004. Major effects to cash generated by operating activities were net operating revenues that increased U.S.$ 12,729 million, primarily due to an increase in sales volume in the domestic market, an increase in prices in both the domestic market and outside Brazil and an increase of exports of oil and oil products.

Investing activities used net cash of U.S.$ 6,911 million for the nine-month period ended September 30, 2005, as compared to U.S.$ 5,326 million for the nine-month period ended September 30, 2004. This increase was due primarily to our investments in capital expenditures associated with our operating activities, which used U.S.$ 6,811 million of cash including U.S.$ 4,093 million in relation to our exploration and production projects, principally in Campos Basin.

Financing activities used net cash of U.S.$ 2,450 million in the nine-month period ended September 30, 2005, as compared to using net cash in the amount of U.S.$ 2,256 million in the nine-month period ended September 30, 2004. Levels of financing activities for the nine-month period ended September 30, 2004 to the nine-month period ended September 30, 2005 remained significantly unchanged. Dividends paid in the nine-month period ended September 30, 2005 were U.S.$ 1,909 million.

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