Petrobras (PBR)

Selling, General and Administrative Expenses

Selling, general and administrative expenses decreased 10.9% to U.S.$3,125 million in the first half of 2009 compared to U.S.$3,507 million in the first half of 2008.

Selling expenses decreased 11.4% to U.S.$1,532 million in the first half of 2009 compared to U.S.$1,729 million in the same period last year. Excluding the impact of the depreciation of the Real, selling expenses increased 6.4% in the first half of 2009 compared to the same period of 2008, due to higher exports and trading volumes, which led to increased ship chartering and higher freight cabotage services (U.S.$108 million of the total increase). These increases were partially offset by a U.S.$44 million reduction in the allowance for doubtful accounts.

General and administrative expenses decreased 10.4% to U.S.$1,593 million in the first half of 2009 compared to U.S.$1,778 million during the same period last year. Excluding the impact of the depreciation of the Real, general and administrative expenses increased 9.5% in the first half of 2009 compared to the same period of 2008, due to higher personnel costs (U.S.$58 million of the total increase) as a result of an increased workforce and pay raises in Brazil, and increased third-party data processing services (U.S.$44 million of the total increase).

Selling, General and Administrative Expenses

Selling, general and administrative expenses decreased 15.6% to U.S.$1,440 million in the three-month period ended March 31, 2009 compared to U.S.$1,706 million in the three-month period ended March 31, 2008.

Selling expenses decreased 12.7% to U.S.$718 million in the three-month period ended March 31, 2009 compared to U.S.$822 million in the same period last year. Excluding the impact of the depreciation of the Real, selling expenses increased 7.6% in the first quarter of 2009 compared to the same period of 2008, due to higher exports and trading, which led to increased ship chartering (U.S.$27.3 million of the total increase), higher personnel expenses (U.S.$5.6 million of the total increase) and additional technical consulting services (U.S.$54.7 million of the total increase). These increases were partially offset by a U.S.$27 million reduction in allowance for doubtful accounts.

General and administrative expenses decreased 18.3% to U.S.$722 million in the three-month period ended March 31, 2009 compared to U.S.$884 million during the same period last year. Excluding the impact of the depreciation of the Real, general and administrative expenses increased in the first quarter of 2009 compared to the same period of 2008, due to higher personnel costs as a result of an increased workforce and pay raises in Brazil and the inclusion of expenses from the NSS Refinery in Japan.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased 18.9% to U.S.$7,429 million for 2008 compared to U.S.$6,250 million for 2007.

Selling expenses increased 19.0% to U.S.$3,517 million for 2008 from U.S.$2,956 million for 2007. This increase was primarily attributable to a U.S.$367 million increase in transportation costs due primarily to increased sales volumes.

General and administrative expenses increased 18.8% to U.S.$3,912 million for 2008, from U.S.$3,294 million for 2007. Excluding the impact of the appreciation of the Real, the increase in general and administrative expenses was primarily due to higher personnel expenses in 2008 due to an increase in salaries and number of employees and increased costs for third-party technical consulting, auditing and data processing services in Brazil.

Selling, general and administrative expenses

Selling, general and administrative expenses increased 29.3% to U.S.$5,663 million in the nine-month period ended September 30, 2008, compared to U.S.$4,381 million in the nine-month period ended September 30, 2007.

Selling expenses increased 24.1% to U.S.$2,637 million in the nine-month period ended September 30, 2008, from U.S.$2,125 million in the nine-month period ended September 30, 2007. This increase was primarily attributable to a U.S.$245 million increase in transportation costs due mainly to increased sales volumes.

General and administrative expenses increased 34.1% to U.S.$3,026 million in the nine-month period ended September 30, 2008, from U.S.$2,256 million in the nine-month period ended September 30, 2007. Excluding the impact of the appreciation of the Real, the increase in general and administrative expenses was primarily due to higher personnel expenses in the nine-month period ended September 30, 2008, due to the increase in the workforce, the increase in salaries as a result of the 2007/08 collective bargaining agreement and an increase in costs related to third-party technical consulting, auditing and data processing services in Brazil.

Selling, general and administrative expenses

Selling, general and administrative expenses increased 29.6% to U.S.$3,507 million in the first half of 2008, compared to U.S.$2,706 million in the first half of 2007.

Selling expenses increased 37.0% to U.S.$1,729 million in the first half of 2008 from U.S.$1,262 million in the first half of 2007. This increase was primarily attributable to:

• approximately U.S.$160 million in higher transportation costs due mainly to increased sales volumes;

• approximately U.S.$61 million in additional technical consulting services due to increased outsourcing of selected non-core general activities; and

• an increase of approximately U.S.$34 million in allowance for uncollectible accounts.

General and administrative expenses increased 23.1% to U.S.$ 1,778 million in the first half of 2008 from U.S.$1,444 million in the first half of 2007. Excluding the impact of the appreciation of the Real, the increase in general administrative expenses was primarily attributable to the increase in personnel expenses in the first half of 2008, due to the increase in the workforce, the increase in salaries as a result of the 2007/08 collective bargaining agreement, the new jobs and salaries plan and the 2007 advancement and promotion plan.

Selling, general and administrative expenses

Selling, general and administrative expenses increased 29.9% to U.S.$1,706 million for the first quarter of 2008, compared to U.S.$1,313 million for the first quarter of 2007.

Selling expenses increased 37.0% to U.S.$822 million for the first quarter of 2008 from U.S.$600 million for the first quarter of 2007. This increase was primarily attributable to:

• approximately U.S.$59 million in higher transportation costs due mainly to increased sales volumes;
  
  
• approximately U.S.$22 million in additional technical consulting services due to increased outsourcing of selected non-core general activities;
  
  
• an increase of approximately U.S.$11 million in expenses related to increased consumption of materials; and
  
  
• approximately U.S.$6 million in higher personnel expenses, due to the increase in our workforce and salaries.

General and administrative expenses increased 24.0% to U.S.$884 million for the first quarter of 2008 from U.S.$713 million for the first quarter of 2007. Excluding the impact of the appreciation of the Real, the increase in general and administrative expenses was primarily attributable to the increase in personnel expenses in the first quarter of 2008, due to the increase in our workforce and salaries, as compared to the first quarter of 2007.

Selling, general and administrative expenses

Selling, general and administrative expenses increased 29.6% to U.S.$6,250 million for 2007, compared to U.S.$4,824 million for 2006.

Selling expenses increased 23.5% to U.S.$2,956 million for 2007 from U.S.$2,394 million for 2006. This increase was primarily attributable to:

• approximately U.S.$182 million in higher transportation costs due mainly to increased exports; and
  
  
• approximately U.S.$75 million in higher personnel expenses.

General and administrative expenses increased 35.6% to U.S.$3,294 million for 2007 from U.S.$2,430 million for 2006. This increase was primarily attributable to:

• approximately U.S.$309 million in increased personnel expenses; and
  
  
• approximately U.S.$229 million in additional technical consulting services due to increased outsourcing of selected non-core general activities.

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Selling, general and administrative expenses

Selling, general and administrative expenses increased 24.5% to U.S.$ 4,381 million for the nine-month period ended September 30, 2007 as compared to U.S.$ 3,520 million for the nine-month period ended September 30, 2006.

Selling expenses increased 13.1% to U.S.$ 2,125 million for the nine-month period ended September 30, 2007, as compared to U.S.$ 1,777 million for the nine-month period ended September 30, 2006. This increase was primarily attributable to the 8.3% increase in the value of the Real against the U.S. dollar in the nine-month period ended September 30, 2007, as compared to the nine-month period ended September 30, 2006.

General and administrative expenses increased 29,4% to U.S.$ 2,256 million for the nine-month period ended September 30, 2007 as compared to U.S.$ 1,743 million for the nine-month period ended September 30, 2006. This increase was primarily attributable to:

• an increase of approximately U.S.$ 156 million in expenses related to technical consulting services in connection with our increased outsourcing of selected non-core general activities;

• an increase of approximately U.S.$ 71 million in personnel expenses due to: (1) the increase in our workforce and salaries; (2) personnel training and development programs; and (3) new companies abroad; and

• the 8.3% increase in the value of the Real against the U.S. dollar in the nine-month period ended September 30, 2007, as compared to the nine-month period ended September 30, 2006.

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Selling, general and administrative expenses

Selling, general and administrative expenses increased 18.1% to U.S.$ 2,706 million for the first half of 2007 as compared to U.S.$ 2,292 million for the first half of 2006.

Selling expenses increased 9.2% to U.S.$ 1,262 million for the first half of 2007, as compared to U.S.$ 1,156 million for the first half of 2006. This increase was primarily attributable to the 6.6% increase in the value of the Real against the U.S. dollar in the first half of 2007, as compared to the first half of 2006.

General and administrative expenses increased 27.1% to U.S.$ 1,444 million for the first half of 2007 as compared to U.S.$ 1,136 million for the first half of 2006. This increase was primarily attributable to:

• an increase of approximately U.S.$ 125 million in personnel expenses due to: (1) the increase in our workforce and salaries; (2) personnel training and development programs; and (3) new companies abroad;
  
  
• an increase of approximately U.S.$ 91 million in expenses related to technical consulting services in connection with our increased outsourcing of selected non-core general activities; and
  
  
• the 6.6% increase in the value of the Real against the U.S. dollar in the first half of 2007, as compared to the first half of 2006.

Selling, general and administrative expenses

Selling, general and administrative expenses increased 19.4% to U.S.$ 1,358 million for the first quarter of 2007 as compared to U.S.$ 1,137 million for the first quarter of 2006.

Selling expenses increased 2.4% to U.S.$ 600 million for the first quarter of 2007, as compared to U.S.$ 586 million for the first quarter of 2006. This increase was primarily attributable to the 3.9% increase in the value of the Real against the U.S. dollar in the first quarter of 2007, as compared to the first quarter of 2006.

General and administrative expenses increased 37.6% to U.S.$ 758 million for the first quarter of 2007 as compared to U.S.$ 551 million for the first quarter of 2006. This increase was primarily attributable to:

• an increase of approximately U.S.$ 81 million in employee expenses due to: (1) the increase in our workforce and salaries; (2) personnel training and development programs; and (3) new companies abroad;
  
  
• an increase of approximately U.S.$ 57 million in expenses related to technical consulting services in connection with our increased outsourcing of selected non-core general activities; and
  
  
• the 3.9% increase in the value of the Real against the U.S. dollar in the first quarter of 2007, as compared to the first quarter of 2006.

Selling, general and administrative expenses

Selling, general and administrative expenses increased 11.5% to U.S.$ 4,989 million for 2006, as compared to U.S.$ 4,474 million for 2005.

Selling expenses increased 11.8% to U.S.$ 2,394 million for 2006, as compared to U.S.$ 2,141 million for 2005. This increase was primarily attributable to the following:

• an increase of approximately U.S.$ 43 million in expenses related to the increased consumption of materials;
  
  
• an increase of approximately U.S.$ 23 million in personnel expenses due to the increase in our workforce and salaries;
  
  
• an increase of approximately U.S.$ 13 million in expenses mainly associated with transportation costs of oil products, due mainly to an increase in the exports; and
  
  
• the 10.7% increase in the value of the Real against the U.S. dollar in 2006, as compared to 2005.

General and administrative expenses increased 11.2% to U.S.$ 2,595 million for 2006, as compared to U.S.$ 2,333 million for 2005. This increase was primarily attributable to the 10.7% increase in the value of the Real against the U.S. dollar in 2006, as compared to 2005.

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Selling, general and administrative expenses

Selling, general and administrative expenses increased 23.0% to U.S.$ 3,636 million for the nine-month period ended September 30, 2006, as compared to U.S.$ 2,957 million for the nine-month period ended September 30, 2005.

Selling expenses increased 22.6% to U.S.$ 1,777 million for the nine-month period ended September 30, 2006, as compared to U.S.$ 1,449 million for the nine-month period ended September 30, 2005. This increase was primarily attributable to the following:

• an increase of approximately U.S.$ 113 million in expenses mainly associated with transportation costs of oil products, due mainly to an increase in the exports;
  
  
• an increase of approximately U.S.$ 43 million in personnel expenses due to the increase in our workforce and salaries;
  
  
• an increase of approximately U.S.$ 27 million in expenses related to the increased consumption of materials; and

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• the 12.6% increase in the value of the Real against the U.S. dollars in the nine-month period ended September 30, 2006, as compared to the nine-month period ended September 30, 2005. 

General and administrative expenses increased 23.3% to U.S.$ 1,859 million for the nine-month period ended September 30, 2006, as compared to U.S.$ 1,508 million for the nine-month period ended September 30, 2005. This increase was primarily attributable to: 

• an increase of approximately U.S.$ 126 million in employee expenses due to the increase in our  workforce and salaries, and an increase in the actuarial calculations relating to future health care and pension benefits due to changes in actuarial assumptions; 
  
• an increase of approximately U.S.$ 25 million in expenses related to technical consulting services  in connection with our increased outsourcing of selected non-core general activities; and 
  
• the 12.6% increase in the value of the Real against the U.S. dollars in the nine-month period  ended September 30, 2006, as compared to the nine-month period ended September 30, 2005. 
  
  
  

Selling, general and administrative expenses

Selling, general and administrative expenses increased 25.1% to U.S.$ 2,361 million for the first half of 2006, as compared to U.S.$ 1,887 million for the first half of 2005.

Selling expenses increased 23.0% to U.S.$ 1,156 million for the first half of 2006, as compared to U.S.$ 940 million for the first half of 2005. This increase was primarily attributable to the following:

• an increase of approximately U.S.$ 37 million in personnel expenses due to the increase in our workforce and salaries;
  
  
• an increase of approximately U.S.$ 19 million in expenses related to the increased consumption of materials; and
  
  
• the 15.0% increase in the value of the Real against the U.S. dollars in the first half of 2006, as compared to the first half of 2005.

General and administrative expenses increased 27.2% to U.S.$ 1,205 million for the first half of 2006, as compared to U.S.$ 947 million for the first half of 2005. This increase was primarily attributable to:

• an increase of approximately U.S.$ 72 million in employee expenses due to the increase in our workforce and salaries; and an increase in the actuarial calculations relating to future health care and pension benefits due to changes in actuarial assumptions;
  
  
• an increase of approximately U.S.$ 41 million in expenses related to technical consulting services in connection with our increased outsourcing of selected non-core general activities; and
  
  
• the 15.0% increase in the value of the Real against the U.S. dollars in the first half of 2006, as compared to the first half of 2005.

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Selling, general and administrative expenses

Selling, general and administrative expenses increased 29.9% to U.S.$ 1,137 million for the first quarter of 2006, as compared to U.S.$ 875 million for the first quarter of 2005.

Selling expenses increased 33.2% to U.S.$ 586 million for the first quarter of 2006, as compared to U.S.$ 440 million for the first quarter of 2005. This increase was primarily attributable to the following:

• an increase of U.S.$ 124 million in expenses mainly associated with the transportation costs of oil products due mainly to an increase in exports; and

• the 17.7% increase in the value of the Real against the U.S. dollars in the first quarter of 2006, as compared to the first quarter of 2005.

General and administrative expenses increased 26.7% to U.S.$ 551 million for the first quarter of 2006, as compared to U.S.$ 435 million for the first quarter of 2005. This increase was primarily attributable to the following:

• an increase of approximately U.S.$ 68 million in expenses related to technical consulting services in connection with our increased outsourcing of selected non-core general activities;

• an increase of approximately U.S.$ 19 million in employee expenses due to the increase in our workforce and salaries; and an increase in the actuarial calculations relating to future health care and pension benefits due to changes in actuarial assumptions; and

• the 17.7% increase in the value of the Real against the U.S. dollars in the first quarter of 2006, as compared to the first quarter of 2005.

Selling, general and administrative expenses

Selling, general and administrative expenses increased 48.7% to U.S.$ 2,957 million for the nine-month period ended September 30, 2005, as compared to U.S.$ 1,989 million for the nine-month period ended September 30, 2004.

Selling expenses increased 32.3% to U.S.$ 1,449 million for the nine-month period ended September 30, 2005, as compared to U.S.$ 1,095 million for the nine-month period ended September 30, 2004. This increase was primarily attributable to the following:

• an increase of U.S.$ 173 million in expenses mainly associated with the transportation costs of oil products due mainly to an increase in the exports; and
  
  
• 16.0% increase in the value of the Real against the U.S. dollar in the nine-month period ended September 30, 2005, as compared to the nine-month period ended September 30, 2004.

General and administrative expenses increased 68.7% to U.S.$ 1,508 million for the nine-month period ended September 30, 2005, as compared to U.S.$ 894 million for the nine-month period ended September 30, 2004. This increase was primarily attributable to the following:

• an increase of approximately U.S.$ 185 million in expenses related to technical consulting services in connection with our increased outsourcing of selected non-core general activities;
  
  
• an increase of approximately U.S.$ 139 million in employee expenses due to the increase in our workforce and salaries; and an increase in the actuarial calculations relating to future health care and pension benefits due to changes in actuarial assumptions; and
  
  
• 16.0% increase in the value of the Real against the U.S. dollar in the nine-month period ended September 30, 2005, as compared to the nine-month period ended September 30, 2004.

Selling, general and administrative expenses

Selling, general and administrative expenses increased 60.1% to U.S.$ 1,887 million for the first half of 2005, as compared to U.S.$ 1,179 million for the first half of 2004.

Selling expenses increased 52.8% to U.S.$ 923 million for the first half of 2005, as compared to U.S.$ 604 million for the first half of 2004. This increase was primarily attributable to the following:

• an increase of U.S.$ 171 million in expenses mainly associated with the transportation costs of oil products due mainly to an increase in the exports; and
  
  
• the 13.4% increase in the value of the Real against the U.S. dollar in the first half of 2005, as compared to the first half of 2004.

General and administrative expenses increased 64.7% to U.S.$ 947 million for the first half of 2005, as compared to U.S.$ 575 million for the first half of 2004. This increase was primarily attributable to the following:

• an increase of approximately U.S.$ 122 million in expenses related to technical consulting services in connection with our increased outsourcing of selected non-core general activities;

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• an increase of approximately U.S.$ 92 million in employee expenses due to the increase in our workforce and salaries; and an increase in the actuarial calculations relating to future health care and pension benefits due to changes in actuarial assunptions; and
  
  
• the 13.4% increase in the value of the Real against the U.S. dollar in the first half of 2005, as compared to the first half of 2004.

Selling, General and Administrative Expenses

PIFCo’s selling, general and administrative expenses consist primarily of shipping costs and fees for services, including accounting and legal services. These expenses increased to U.S.$18.6 million in 2003, as compared to

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U.S.$1.2 million in 2002, of which U.S.$17.1 million consisted of shipping expenses. In 2003, our management decided to assign to PIFCo the responsibility for payment of shipping expenses previously paid by us. From this point forward, PIFCo expects shipping costs to figure permanently as part of its selling, general and administrative expenses.

Selling, general and administrative expenses

Selling, general and administrative expenses increased 53.2 % to U.S.$ 875 million for the first quarter of 2005, as compared to U.S.$ 571 million for the first quarter of 2004.

Selling expenses increased 51.7% to U.S.$ 440 million for the first quarter of 2005, as compared to U.S.$ 290 million for the first quarter of 2004. This increase was primarily attributable to the following:

General and administrative expenses increased 54.8% to U.S.$ 435 million for the first quarter of 2005, as compared to U.S.$ 281 million for the first quarter of 2004. This increase was primarily attributable to the following:

Selling, general and administrative expenses

Selling, general and administrative expenses increased 38.7 % to U.S.$ 2,901 million for 2004, as compared to U.S.$ 2,091 million for 2003.

Selling expenses increased 51.4% to U.S.$ 1,544 million for 2004, as compared to U.S.$ 1,020 million for 2003. This increase was primarily attributable to the following:

General and administrative expenses increased 26.7% to U.S.$ 1,357 million for 2004, as compared to U.S.$ 1,071 million for 2003. This increase was primarily attributable to the following: