CONTENTS
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Balance Sheet 94
Consolidated Income Statement 96
Cash Flow Statement 97
Changes in Consolidated Shareholders’ Equity 98
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AT 12/31/05 99
Accounting Principles and Consolidation Criteria 100
Content and Format of the Financial Statements 100
Scope of Consolidation 101
Consolidation of Foreign Companies and Criteria Used to Translate Items
Denominated in Foreign Currencies 102
Financial Highlights of Companies Consolidated by the Proportional Method 103
Valuation Criteria 104
Reconciliation Schedules Required by IFRS 1 109
Risk Management, Types of Financial Risks and Hedging Strategies 111
Segment Information 116
 
Notes to the Balance Sheet 118
1. Property, Plant and Equipment 118
2. Investment Property 120
3. Goodwill 120
4. Hydrocarbons Concessions 122
5. Other Intangible Assets 122
6. Investments in Associates and Available-for-sale Investments 123
7. Other Financial Assets 124
8. Deferred-tax Assets 124
9. Other Assets 124
10. Current Assets 125
11. Shareholders' Equity 127
12. Provision for Employee Severance Indemnities and Provision for Pensions 129
13. Provision for Deferred Taxes 130
14. Provisions for Risks and Charges 131
15. Bonds 132
16. Long-term Borrowings and Other Financial Liabilities 132
17. Other Liabilities 132
18. Current Liabilities 132
 
Notes to the Income Statement 134
19. Sales Revenues 134
20. Other Revenues and Income 136
21. Raw Materials and Services Used 136
22. Labor Costs 137
23. EBITDA 137
24. Depreciation, Amortization and Writedowns 138
25. Net Financial Income (Expense) 139
26. Income from (Expense on) Equity Investments 140
27. Other Income (Expense), Net 140
28. Income Taxes 141
29. Profit (Loss) from Discontinued Operations 142
30. Profit (Loss) per Share 142
 
Other Information 143
Information About the Discontinued Operations (IFRS 5) 143
Contingent Commitments and Risks 144
Transactions Among Group Companies and with Related Parties 153
Compensation of Directors and Statutory Auditors 155
Significant Events Occurring Since December 31, 2005 156
 
Scope of Consolidation 157
 
REPORT OF THE INDEPENDENT AUDITORS 174
CONSOLIDATED
FINANCIAL STATEMeNTS
2005