Petrobras (PBR)

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• An increase in the financial result (R$ 3,168 million), due to exchange gains on net dollar assets and the positive effect of the monetary variation on financings, as shown in the table below:

(1) Includes monetary variation over loans in domestic currency attached to the variation of dollar.

• The positive effect of minority interests (R$ 949 million), due to lower exchange gains over SPE’s and controlled companies’ debts.

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• A R$ 1,405 million increase in operating expenses, notably:

• Exploration costs (R$ 508 million), due to the increase in the write-off of dry and economically unviable wells (R$ 114 million) and increased geological and geophysical costs (R$ 357 million) in Brazil, in turn caused by the intensification of the Company’s investment program;

• General and administrative expenses (R$ 417 million), due to the rise in personnel costs (R$ 127 million) as a result of the increase in the workforce, the 2008/09 collective bargaining agreement and salary-level advancements and promotions in 2008, higher third-party service costs (R$ 97 million), especially expenses related to data processing and the incorporation of new companies (R$ 43 million); and the exchange impact on the conversion of expenses from foreign subsidiaries (R$ 121 million);

• Other operating expenses (R$ 285 million), due to the recognition of losses from the depreciation of commodities (R$ 454 million) due to the change in the commodity price level, and expenses from non-operational equipment (R$ 161 million) from the docking of drills that will be used in maritime fields, offset by the decline in regulatory and contractual fines that occurred in 2008 (R$ 282 million), resulting from failures in gas supplies to thermal plants, and lower expenses from institutional relations and cultural projects (R$ 133 million);

• Selling expenses (R$ 250 million), due to higher export and trading volumes, which pushed up ship chartering expenses, and expenses from chartering in the cabotage segment (R$ 237 million), as well as the inclusion of new companies and the exchange impact on the conversion of expenses from foreign subsidiaries (R$ 117 million), offset by the reduction in provisions for doubtful debts (R$ 97 million).

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