This excerpt taken from the PBR 20-F filed Jun 30, 2005.
We derive financial income primarily from interest on cash and cash equivalents. The bulk of our cash equivalents are short- term Brazilian government securities, including securities indexed to the U.S. dollar. We also hold substantial balances in U.S. dollar deposits.
Our financial income was U.S.$911 million in 2004, U.S.$602 million in 2003 and U.S.$1,142 million in 2002.
We incur financial expenses from short and long-term debt denominated in U.S. dollars, Reais and other currencies. Our financial expenses were U.S.$1,733 million in 2004, U.S.$1,247 million in 2003 and U.S.$774 million in 2002. In addition, we capitalized U.S.$267 million in interest in 2004, as compared to U.S.$184 million in 2003 and U.S.$139 million in 2002.