Shareholders’ equity, distribution of results and dividends

At December 31, 2008, after the adjustments of Law 11.638/07, the shareholders’ equity of Petrobras (Parent company) was R$ 144.051 million, corresponding to R$ 16,41 per share.

The Company’s market value was R$ 223.991 million.

DISTRIBUTION OF RESULTS FOR THE YEAR

The following distributions are being proposed for the Parent company’s net income of R$ 36.470 million:

Shareholders’ equity, distribution of results and dividends
  (R$ Million)
Net income for the year   36.470
Distributions:    
> To reserves:    
Legal reserve (art. 193 of Law 6.404/76) recorded at the ratio of 5% of net income 1.824  
Statutory reserve (art. 194 of Law 6.404/76) 395  
Tax incentive reserves (art.195 - Law 6.404/76) 557  
Profit retention (art.196 of Law 6.404/76) 23.779 26.555
> To reserves:    
Interest on shareholders’ equity 7.019  
Dividends 2.896 9.915

PROFIT RESERVE - TAX INCENTIVES - SUDENE

It is formed through the allocation of the portion of income corresponding to the tax incentives resulting from government donations or subsidies, allocated to the results for the year in conformity with article 195-A of the Corporation Law, included by Law 11.638/07, as from January 1, 2008.

In 2008, the amount of R$ 557 million was allocated in the results, referring to the incentive for investments in the Northeast, within the ambit of the Superintendency for Development of the Northeast (SUDENE), and the retention of this portion of the profit in a tax incentive reserve is being proposed.

PROPOSAL FOR PROFIT RETENTION

In the General Shareholders’ Meeting to be held on April 8, 2009, a profit retention of R$ 25.217 million is being proposed, and the portion of R$ 23.779 million resulting from the income for 2008 and R$ 1.438 million from the remaining balance of income resulting from prior years, which is earmarked to partially meet the Company’s annual investment program, established in the Capital Budget for 2009, is also to be decided in the General Shareholders’ Meeting.

SHAREHOLDERS’ REMUNERATION

The Board of Directors of Petrobras, based on statutory provisions, is proposing to the General Shareholders’ Meeting to be held on April 8, 2009, the distribution of a dividend related to 2008 in the amount of R$ 9.915 million, corresponding to 29.4% of the basic profit for purposes of a dividend equivalent to R$ 1,13 per common and preferred share, without distinction, as presented below:

Shareholders’ equity, distribution of results and dividends
Statement of the basic profit of the parent company for dividend purposes (R$ Million)
Net income for the year 36.470
Appropriation:  
Legal reserve (art. 193 of Law 6.404/76) (1.824)
Tax incentive reserves (557)
(+) Reversions/additions:  
Revaluation reserve 51
(=) Basic income for calculation of the dividend 34.140
Proposed dividends, equivalent to 29,04 % of the basic income - R$ 1,13 per share comprising:  
Interest on shareholders’ equity 7.019
Dividends 2.896
Total proposed dividends 9.915

The dividends proposed for 2008 include the portion of interest on shareholders’ equity in the amount of R$ 7.019 million (R$ 0,80 per share), which will be made available based on the shareholding position at December 26, 2008, subject to the withholding of income tax at the rate of 15%, except for the shareholders who are immune and exempt. The portion of the dividends in the amount of R$ 2.896 million will be made available based on the shareholding position at April 8, 2009, the date of the General Shareholders’ Meeting, which will decide on the matter.

These amounts will be monetarily updated as from December 31, 2008 in accordance with the variation of the SELIC rate until the date of the beginning of the payment to be defined in the General Shareholders’ Meeting.