PBR » Topics » Changes 4Q-2006 X 3Q-2006 MAIN INFLUENCES
This excerpt taken from the PBR 6-K filed Mar 12, 2007.
Changes 4Q-2006 X 3Q-2006
. Domestic Market: - Effect of Volumes Sold
- Effect of Prices
. Intl. Market: - Effect of Export Volumes
- Effect of Export Price
. Increase in expenses: (*)
. Extraordinary items in 3Q06: - adjustment to special participations (**)
-expenses with re-injected gas (***)
. Increase in Profitability of Distribution Segment
. Increase (Decrease) in operations of commercialization abroad
. Increase (Decrease) in international sales
. FX effect on controlled companies abroad
(**) New interpretation by the ANP disallowing deductibility of charges associated with project finance expenses for the Marlim field.
(***) Expense adjustments with gas produced and re-injected in Solimões, Campos and Espírito Santo basins.
(*) Expenses Composition:
- Import of gas, crude oil and oil products
- Domestic Government Take
- Third-Party Services
The increase in operational expenses was primarily a result of the following items:
General and administrative expenses increased (R$ 269 million) due to higher personnel expenses related to the Collective Bargaining Agreement 2005/2006 (R$ 96 million); and services related to consulting and administrative support (R$ 92 million);
Exploration expenses increased (R$ 287 million) as a result of wells write-offs in Campos, Espírito Santo, Ceará and Sergipe basins (R$ 166 million), and internationally in the U.S. (R$ 111 million), Argentina (R$ 20
million) and Nigeria (R$ 13 million). The increase in exploration expenses were partially offset by the positive effect of the revision of estimated costs related to wells write-offs (R$ 89 million);
Research and technology development increased (R$ 103 million) with R$ 116 million destined to ANP settlement;
Other taxes increased (R$ 94 million) primarily as a result of higher CPMF expenses (R$ 19 million) and higher taxes on international remittances and financial payments (R$ 35 million).
Such effects were partially compensated by a favorable financial income of R$ 602 million given:
Premium related to the bond buyback during 3Q06, affecting the comparison with the 4Q06 (R$ 348 million);
Greater capitalization of financing interests related to projects (R$ 170 million) and the reduction of extraordinary expenses related to tax charges (R$ 79 million).
Financial gains as a result of the renegotiation with the electric sector (R$ 70 million) and a crude oil and oil products hedge (R$ 44 million);
Despite the appreciation of the Real in 4Q06 (1.66%) and the interest rate reduction in the country, the financial earnings from cash equivalent investments tied to the exchange rate and the DI were below those of 3Q06 (R$ 153 million).
Improved non-operating result (R$ 73 million) stems mainly from the sale of E&P assets in Argentina amounting to R$ 69 million.
Tax benefits for interests of own capital of R$ 671 million in 4Q06 were below the R$ 1.492 million in 3Q06, and did not trigger higher taxes or social contributions than those paid in 3Q06, on the contrary, they allowed for a reduction of
the taxable income in 4Q06 as stated above.
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