In Re: Methyl Tertiary Butyl Ether ("MTBE") Products Liability Litigation

Filing 4213

ORDER OF DISMISSAL: After having considered the Stipulation and Request by Petrobras America Inc. for Dismissal, the Court hereby ORDERS, ADJUDGES, AND DECREES that Plaintiff Commonwealth of Puerto Rico's claims against Petrobras America Inc. are hereby DISMISSED, subject to any appeal of the July 16, 2013 Opinion and Order and/or the December 30, 2013 Opinion and Order referenced in the Stipulation as well as this Order. If the Court's July 16, 2013 Opinion and Order, December 30, 2013 Opinion and Order, and this Order are affirmed on appeal, or become final because an appeal is not filed, the dismissal of the above claims against PAI shall be with prejudice. Each side shall bear its own costs. IT IS SO ORDERED. (Signed by Judge Shira A. Scheindlin on 5/21/2015) (Attachments: # 1 Exhibit A, # 2 Exhibit B-1, # 3 Exhibit B-2, # 4 Exhibit C, # 5 Exhibit D)Filed In Associated Cases: 1:00-cv-01898-SAS-DCF, 1:07-cv-10470-SAS(ajs)

Schedule D Corporation
Rev. 05.05 and Partnership

GAINS AND LOSSES FROM SALE OR EXCHANGE OF PROPERTY
Taxable year beginning on

I

I I

2005 and ending on

12

200 5

e

I 31 2005

Taxpayer's Name
Pctrobras America, Inc.- Puerto Rico Operations

..

Employer Identification Number
76-0235183

Short-Term Capital Assets Gains and Losses (Held 6 months or less)
(A)

(B)

Date Sold

(D)
Adjusted Basis

(C)

Date Acquired

Description and Location of Property

Sale Price

(F)

(E)

Gain or loss

Selling Expenses

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7. Net long-term capital gain (or loss) ............................................................................................................................................................................................................
8. Distributable share on net long-term capital gain (or loss) from Special Partnerships ...................................................................................................................................
9. Net long-term capital gain (or loss) attributable to direct investment and not through a Gapitallnvesment Fund (Submit detail) ....................................................................
10. Net long-term capital gain (or loss) from property located in P.R. (Add lines 7 through 9) ...................................................................................................................

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1. Net short-term capital gain (or loss) ................................................................................................................................................................................................................................................
2. Net short-term capital gain (or loss) from investment funds (Submit Schedule Q1) ..........................................................................................................................................................................
3. Distributable share on net short-term capital gain (or loss) from Special Partnerships .....................................................................................................................................................................
4. Net short-tem capital gain (or loss) attributable to direct investment and not through a Capital Investment Fund (Submit detail) .....................................................................................................
5. Net capital loss carryover (Submit detail) ........................................................................................................................................................................................................................................
6. Net short-term capital qain (or loss) (Add lines 1 throuqh 5) ........................................................................................................................................................................................................
Long-Term Capital Assets Gains and Losses (Held more than 6 months) (Property located in PR- Section 1121 (c)(2)(A) and 1121(c)(4)(A)
Description and Location of Property

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Long-Term Capital Assets Gains and Losses (Held more than 6 months) (Other Properties- Section 1121(c)(2)(C) and 1121(c)(4)(C))
Description and location of Property

(A)

Date Acquired

(B)

Date Sold

(D)
Adjusted Basis

(C)
Sale Price

(G)
Gain or loss
(Act No. 226 or 2004)

(F)

(E)

Gain or loss

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11. Net long-term capital gain (or loss) ............................................................................................................................................................................................................
12. Distributable share on net long-term capital gain (or loss) from Special Partnerships .................................................................................................................................
13. Net long-term capital gain (or loss) attributable to direct investment and not through a Capital Investment Fund (Submit detail) .................................................................
14. Net lonq-term capital gain (or loss) from other properties (Add lines 11 throu~h 13) ............................................................................................................................
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15. Net long-term capital gain (or loss) ..............................................................................................................................................................................................................
16. Distributable share on net long-term capital gain (or loss) from Special Partnerships ....•..............•..•.•••...•......•...••.•......................................•...........................................•.•.
17. Net long-term capital gain (or loss) attributable to direct investment and not through a Capital Investment Fund (Submit detail) ..........................•.........................•.•...•.•......
18. Net lono-term capital oain (or loss) of shares from eligible Corporation or Partnership (Add lines 15 through 17) ...............................................................................

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Description and Location of Property

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(A)

(B)

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Date Acquired

Date Sold

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Taxpayer's Name
Petrobras America, Inc. -Puerto Rico Operations
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Employer Identification Number

76-0235183

Summary of Capital Gains and Losses
Column B

ColumnA

Gains or Losses
24. Enter the gains determined
on lines 6, 10, 14, 18, 22 am
23 in the corresponding
Column ....................... (24)
25. Enter the losses determined
on lines 6, 10, 14, 18,22 am
23 in the corresponding
Column ....................... (25)

Column C
Property Located in
P.R. (Act No. 226 or 2004)

Prop. Located in
P.R.

Short-Term

Column D

Column F
Shares Eligible
Corporation or
Partnership

Column E
Other Properties

Other Properties

(Act No. 226 or 2004)

Column G
Shares Eligible
Corporation or
Act.

Column H

Partnersh~
No. 225 o 20041

Column I

Under Act No. 40 of
2005

Under Special
Le!lislation

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26. If one or more of Columns Bthrough I reflect
a loss on line 25, add them and apply the
total proportionally to the gains in the other
Columns (See instructions) ...........................
27. Subtract line 26 from line 24. If any Column
reflected a loss on line 25, enter zero here ....
28. Apply the loss from line 25, Column A
proportionally to the gains in Columns B
through l (See instructions) ............................
29. Subtract line 28 from line 27 .........................

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30. Add the total of Columns B through !,line 29. However. if line 24 does not reflect any gain in Columns Bthrough I, you must enter the total amount of fine 25, Columns
A through 1......................................................................................................................................................................................................................................................................................

(30)

31. Net capital gain (or loss) (Add line 24, Column A and line 30) ...........................................................................................................................................................................................................

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32. Enter excess of net short-term capital gain over net long-term capital loss (See instructions) ...........................................................................................................................................................

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33. Enter excess of net long-term capital gain over net short-term capital loss (See instructions) ........................................................................................................................................................... {33)

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34. Net capital gain (Add lines 32 and 33. Enter here and on Form 480.10 or 480.20, Part IV,line 9 or on the appropriate line of other returns)
ConseMtlon Pertod: Ten {10) yeaJS

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ScheduleD CoiJ)otation and Partnership- Paqe
•u>rormon~r•nn of Alternative Tax- Capital Gain
(a) Form 480.10 or 480.20, Part II, line 5

~~~ ~::r~u~eE~t~~c;:ti:~~:n:~!·~i:e7appropiate line of the return ..........................................................................................................................................

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35. Net income

36. Enter the amount from line 29, Column B..............................................................................................................................................................................................................................
37. Enter the amount from line 29, Column C .............................................................................................................................................................................................................................
38. Enter the amount from line 29, Column D.............................................................................................................................................................................................................................
39. Enter the amount from line 29, Column E..............................................................................................................................................................................................................................
40. Enter the amount from line 29. Column F ..............................................................................................................................................................................................................................
41. Enter the amount from line 29, Column G.............................................................................................................................................................................................................................
42. Enter the amount from line 29, Column H.............................................................................................................................................................................................................................
43. Enter the amount from line 29. Column 1...............................................................................................................................................................................................................................
44. Net income for purposes of alternative tax- capital gain (Subtract lines 36 through 43 from line 35) ......................................................................................................................................
COMPUTATION OF NET INCOME TO DETERMINE ALTERNATIVE TAX
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45. N~ Jooom' Joe

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(35)

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48. Partial normal tax (Multiply line 45 by 20%) ..........................................................................................................................................................................................................................
49. Surtax .................................................................................................................................................................................................................................................................................
50. Amount of recapture .............................................................................................................................................................................................................................................................

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53. Plus: 12.5% (property located in Puerto Rico) of the amount on line 36 ................................................................................................................................................................................ (53}
54. Plus: 6.25% (property located in Puerto Rico (Act No. 226 of 2004)) of the amount on line 37 ............................................................................................................................................... (54}
55. Plus: 25% (other properties) of the amount on line 38 ........................................................................................................................................................................................................... (55}
56. Plus: 12.5% (other properties (Act No. 226 of 2004)) of the amount on line 39 ..................................................................................................................................................................... (56}
57. Plus: 7% (shares from eligible corporation or partnership) of the amount on line 40 ............................................................................................................................................................... (57)
58. Plus: 3.5% (shares from eligible corporation or partnership (Act No. 226 of 2004)) of the amount on line 41........................................................................................................................... (5SJ
59. Plus: 20% (Act No. 40 of 2005) of the amount on line 42 ...................................................................................................................................................................................................... (59)
· 60. Plus: __% (under special legislation) of the amount on line 43 (enter applicable percent) ............................................................................................................................................... (GO)
61. Alternative Tax- Capital gains (Add lines 52 through 60. Enter the total here and transfer to Form 480.10 or 480.20, Part Ill, line 13 or to the appropiate line of other returns)..................... (61)

~Gains

(or Losses) from Property Other than Capital Assets

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.

Descnption and Location of Property

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46. Less: Credit for purposes of surtax (From the appropiate line of the return) ........................................................................................................................................................................... (461
47. Net income subject to partial surtax ..................................................................................................................................................................................................................................... (47}
COMPUTATION OF ALTERNATIVE TAX

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sale Price

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(D)

Adjusted Basis

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62. Net gain (or loss) from property other than capital assets (Enter here and on Form 480.10 or 480.20, Part IV, line 10 or on the appropiate line of other returns)
Conservation Pertod: Ten (10} years

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Gain or Loss

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Schedule T Corporation
Rev.os.os and Partnership

ADDITION TO THE TAX FOR FAILURE TO PAY
ESTIMATED TAX IN CASE OF
CORPORATIONS AND PARTNERSHIPS
Taxable year beginning on.

1a~pay~rs
!relrob;.,._,·

I

1 1 , 2QQi

and ending on.

12

1 3I

200_5_

IG t:mployer

.1l!N

Name
- Puerto Rico Operations

'u""""~u"v"

Number

76-0235183

tstlmc:nd Tax Required
1. Tax liability (Add lines 14, 15, 18 and 20 of Part Ill, page 1 of the return)...........................................................................................
2. Credits and overpayments (See instructions) ....................................................................................................................................
3. Estimated tax (Subtract line 2 from line 1. If it is zero or Jess, do not complete this Schedule) .........................................................
4. Line 1 multiplied by 90% ...................................................................................................................................................................
5. Subtract line 2 from line 4 (If it is zero or Jess, enter zero) .................................................................................................................
6. Tax to be paid based on the income tax return from previous year (See instructions) .......................................................................
7. Tax to be paid based on the income tax return from previous year determined according to the rates
corresponding to the current taxable year (See instructions) .............................................................................................................
B. Enter the smaller of lines 5, 6 and 7 ........ ,
.........................................................................................................................
Section A · Estimated Tax to Be Paid per Installment Placing the Net Income on an Annual Basis

Firs~a_l_
9. Basis period (See instructions) ..................................................................
10. Enter the net income for each basis period...............................................
11. Divide line 10 between the number of months of the basis
period on line 9 ........................................................................................
12. Net income placed on an annual basis (Multiply line 11 by 12) .................
13. Determine the normal tax on the net income placed on an
annual basis of line 12 (Line 12 by 20%} ...................................................
14
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..
..
15. Determine the recapture on the net income placed on an
annual basis of line 12 ...............................................................................
16. Determine the Alternative Tax- Capilal Gains...........................................
17. Tax Determined (Enter the smancr beiWeen the sum of fines 13through 15, or fine 16) .... ......
18. Enter the recapture of credit not claimed in
excess or others.......................................................................................
19. Determine the alternative minimum tax on the net income
placed on an annual basis of line 12 ..........................................................
20. Total annual basis tax (Add lines 17 through 19} .......................................
21. Multiply line 20 by 90% ...........................................................................
22. Enter the credits and other payments per period (See instructions) ..........

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25. Subtract line 24 from line 23 (If it is Jess than zero, enter zero) ..................
26. Number of installments.............................................................................
27. Estimated Tax to be Paid per Installment Placing the Net Income on
Annual Basis (Line 25 divided between line 26) .......................................
Section B- tsumared Tax Required
28. Subtract line 24 from line 8 .......................................................................
29. Number of installments .............................................................................
3Q, Line 28 divided between line 29 ""'""""""""""""""""""'""'"""'"""'"'
31.

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IX] CALENDAR YEAR

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FISCAL YEAR (Enter the corresponding dates)_ .................. _
33. Amount of minimum estimated tax per installment (If you
completed Section A and B of Part I, enter line 31. Othmwise,
see instructions) ................ - .. - - - ........ - - - .. - .. - .... - - 34. Amount of estimated tax paid per installments (See instructions}-_ -.
35. Payment date (See instructions)_ ____________________ _
36. Line 42 from previos column.. __ .. _.. __________ .. _____ _
37. Add lnes 34 and 36 _ .. ___ .. ________ .. ______ .. __ .. __ •
38. Subtract line 33 from line 37 (If its zoero or less, enter zero~ ____ _
39. Failure to Pay (If line 38 is zero, subtract line 37 from line 33.
Otherwise, enter zero)_ _________________________ .
40. Add lines 39 and 41 from previous column. __ .. _ .. ___ .... _ .... _ ..
41.1f line 40 is equal or larger than line 38, subtract line 38 from
line 40 and go to line 36 of next column. Otherwise, go to line 42. .... _
42. Overpayment (If line 38 is larger than line 40, subtract line 40
from line 38, and go to line 36 of next column. Otherwise, enter
zero) _________ .. _______________ .. _.. ___ .. ___ ..

(32) l====::;::::+=====r~====~P.====~

(42)

43. Multiply line 39 by 20% (See instructions~ ___________ .. _.. _ _ _ (43) 1----..:...J;;;;q_ _ _ _.::..J.:;=-=f----:....L;;~----...::..J=.IJ
44. Number of days from the due date to the payment date (See
instructions) - -- - - .. - - .. - .. - .... ---- - - -- .. - -- .. - .. -- -- . (4 4) 1-----~d-----,..,-1-----.....,..,+------rd
45.
Line 44

-

365 X Line 43 (See instructions) ........ __ ...................... ..
46. Addition to theTax for Failure to Pay (Add the amounts from
columns of line 45. Transfer to page 1, Part ill, line 24 of the return~ __ _

Multiply (a) by 20% by~
365

Compuler Experl Group

Form AS 2879
Rev. 12.96
Rep. 05.02

Foreign Corporations and Partnerships
Tax on Dividend Equivalent Amount
and Effectively Connected interest
(Branch Profits Tax)

2005

Taxpayer's Name

Employer Identification Number
76-0235183
NOTE TO THE TAXPAYER: This schedule applies to foreign corporations and partnerships that derived less than 80 percent of
their combined total gross income, during the taxable year and the preceding two taxable years, from sources within Puerto Rico
or from income treated as effectively connected with the operation of a trade or business in Puerto Rico (see instructions). If the
corporation or partnership derived 80 percent or more of its combined total gross income as described here, do not complete this
schedule.

Perrobras America, Inc.- Puerto Rico Operations

1. Enter regular income before any net operating loss deduction (Income Tax Return Forms 480.1, 480.10,
480.2; 480.20, Part I, line 1 or Forms 480.3{11) and 480.30(11), Schedule P, line 17)-------------- (1)
2. Additions:
a) Enter excess of flexible depreciation over straight-line depreciation _________ (2a)
b) Exempt interest income under Section 1022(b)(4) of Puerto Rico Internal
Revenue Code of 1994, as amended (Code), net of related expenses _______ (Zb)
c) Other additions (See Section 1119 of the Code):

00
00

00

(2c)

3. Total additions. (Add lines 2(a) through 2(c))

------------------------------------------

4. Deductions:
(4a)
a) Taxes paid (Enter the sum of normal tax, surtax, and alternative minimum
tax).
---------------------------------~~
b) Previous year Branch Profits Tax
c) Enter interest deduction attributable to interest derived froro .e2<empL _______ ( c)
4
obligations
- - - - - - - - - - - - - - - - - - - - - - - - - - . (4d)
(Applicable_ to_fll'lC!.I!.Cj~l_i[l~~t~!i~liJ~ 9!1!Y_. -~~e- Ln§!r~9tiQQ~- _______________ (4e)
______________________ (4 Q
d) Meals and entertainment (Non-deductible)

(896,082 00

~)

00

00
00
00
34 00
00
00

5. Total deductions (Add lines 4(a) through 4(f)) ------------------------------------ -----

(5)

34 00

6. Effectively connected earnings and profits (subtract line 5 from the sum of lines 1 and 3)---------

(6)

(896,116 00

7. Enter Puerto Rico net equity at the end of the current taxable year--------------------------

(7)

(1,639, 139 00

8. Enter Puerto Rico net equity at the end of the previous taxable year-------------------------

(8)

(743,023 00

9. Increase/decrease in Puerto Rico net equity (Subtract line 8 from line 7. See instructions)-------_-

(9)

(896, 116 00

10. Dividend equivalent amount (Subtract line 9 from line 6. See instructionsf------------------- (10)

00

11. Branch profits tax liability (Multiply line 10 by 10%)-------------------------------------(11)

00

Conservation Penod: Ten (10) years

Computer Expert Group

PETRO BRAS AMERICA, INC. ~PUERTO RICO OPERATIONS
ACCOUNT NO.: 76~0235183

STATEMENT TO BE ATTACHED TO AND MADE PART OF THE
AMENDED PUERTO RICO CORPORATION INCOME TAX RETURN
FOR THE YEAR ENDED DECEMBER31, 2005
STATEMENT OF OTHER DEDUCTIONS
PAGE2, PARTY, LINE47

DESCRIPTION

AMOUNT

Freight
Storage Expense
Inspection Expense
Duties
Bond Issuance
Other Miscellaneous Expenses

$

387,644
129,734
108,643
23,573
750
4,549

TOTAL OTHER DEDUCTIONS

$

654,893

PETROBRAS AMERICA, INC.- PUERTO RICO OPERATIONS
ACCOUNT NO.: 76-0235183

STATEMENT TO BE ATTACHED TO AND MADE PART OF THE
AMENDED PUERTO RICO CORPORATION INCOME TAX RETURN
FOR THE YEAR ENDED DECEMBER 31, 2005
CHARITABLE CONTRIBUTIONS CARRYFORWAIID

YEAR

12/3112004

AMOUNT
USED

AMOUNT
$

14

$

$

14

BALANCE

$

TOTAL CHARITABLE CONTRIBUTIONS
CARRYFORWARD 2006

$

14

$

14

EXPIRATION
DATE

12/31/2009

PETRO BRAS AMERICA, INC. - PUERTO RICO OPERATIONS
ACCOUNT NO.: 76-0235183

STATEMENT TO BE ATTACHED TO AND MADE PART OF THE
AMENDED PUERTO RICO CORPORATION INCOME TAX RETURN
FOR THE YEAR ENDED DECEMBER 31, 2005
STATEMENT OF OTHER DECREASES
PAGE 3, PART IX, LINE 6

DESCRIPTION

AMOUNT

Return on investment from PAl

$

13,672,300

TOTAL OTHER DECREASES

s

13,672,300

PETROBRAS AMERICA, INC.- PUERTO RICO OPERATIONS
ACCOUNT NO.: 76-0235183

STATEMENT TO BE ATTACHED TO AND MADE PART OF THE
AMENDED PUERTO RICO CORPORATION INCOME TAX RETURN
FOR THE YEAR ENDED DECEMBER 31,2005
SCHEDULE OF NET OPERATING LOSS CARRYFORWARD FOR REGULAR TAX PURPOSES

LOSS
CREATED

YEAR CREATED
2004
2005

$

2,343,249
896,082

TOTAL NOL CARRYFORWARD
AVAILABLE FOR DECEMBER31,2006

AMOUNT USED
$

BALANCE
$

2,343,249
896,082

$

3,239,331

EXPIRATION
YEAR
201 I
2012

PETRO BRAS AMERICA, INC. - PUERTO RICO OPERATIONS
ACCOUNT NO.: 76-0235183

STATEMENT TO BE ATTACHED TO AND MADE PART OF THE
AMENDED PUERTO RICO CORPORATION INCOME TAX RETURN
FOR THE YEAR ENDED DECEMBER 31,2005
SCHEDULE OF NET OPERATING LOSS CARRYFORWARD FOR AMT PURPOSES

LOSS
CREATED

YEAR CREATED
2004
2005

$

2,343,249
896,082

TOTAL AMT NOL CARRYFORWARD
AVAILABLE FOR DECEMBER 31, 2006

BALANCE

AMOUNT USED
$

$

2,343,249
896,082

$

3,239,331

EXPIRATION
YEAR
2011
2012

PETROBRAS AMERICA, INC.- PUERTO RICO OPERATIONS
ACCOUNT NO. 76-0235183

STATEMENT TO BE ATTACHED TO AND MADE PART OF THE
AMENDED PUERTO RICO CORPORATION INCOME TAX RETURN
FOR THE YEAR ENDED DECEMBER 31, 2005
REASON FOR AMENDMENT

The taxpayer hereby amends the Corporation Income Tax Return for the year ended December 3 I, 2005 in
order to reflect the balances from the 2005 Audited Financial Statements. Aditionally, the taxpayer amends
the return to properly reflect the amended Net Operating Loss of$2,343,249 and Overpayment of$243,582
as agreed in the Executed Closing Agreement ofFebruary 5, 2010 enclosed herein for your reference.

PETROBRAS AMERICA, INC.- PUERTO RICO OPERATIONS
ACCOUNT NO. 76-0235183

STATEMENT TO BE ATTACHED TO AND MADE PART OF THE
AMENDED PUERTO RICO CORPORATION INCOME TAX RETURN
FOR THE YEAR ENDED DECEMBER 31,2005
CLOSING AGREEMENT

The taxpayer entered into a Closing Agreement (enclosed for your reference) pursuant to Section 6I26 of the
Puerto Rico Internal Revenue Code of I 994, as amended, in which The Pue1to Rico Income Tax Return for
the years ended December 31, 2003 and 2004 were deemed to be amended to reflect the 2003 and 2004
audited numbers, retroactively use the income tax overpayment for the year ended December 3 I, 2004
against the 2003 income tax liability and properly carryforward the revised overpayment of$243,582 and
the amended Net Operating loss of $2,343,249 for the year ended December 31, 2005.

CLOSING AGREEMENT PURSUANT TO
THE PUERTO RICO INTERNAL REVENUE CODE OF 1994, AS AMENDED
This CLOSING AGREEMENT, made in quadruplicate, is entered into pursuant to
Section 6126 of the Puerto Rico futernal Revenue Code of 1994, as amended.
APPEAR
AS PARTY OF THE FffiST PART: HONORABLE JUAN CARLOS PUIG, in
his capacity as Secretary of the Treasury of the Conunonwealth of Puerto Rico (hereinafter
referred to as the "Secretruy") represented herein by lVfr. Pablo Hymovitz Cardona, in his
capacity as Assistant Secretary for futemal Revenue, who has been designated by the
Secretary to act on his behalf; and
AS PARTY OF THE SECOND PART: PETRO BRAS AMERICA, INC.PUERTO RICO OPERATIONS (a division of Petrobras America, Inc.) (hereinafter
referred to as the "Taxpayer"), represented herein by its authorized representative Mr.
Gustavo Tardin Barbosa, Chief Financial Officer, who has been designated by the Taxpayer
to act on its behalf and to represent it before the Puerto Rico Treasury Department
(hereinafter referred to as the "Treasuty Department").
WITNESSETH
The parties state that, in accordance with the provisions of the Puerto Rico Internal
Revenue Code of 1994, as amended (hereinafter the "Code"), they have full legal capacity to
enter into this CLOSING AGREEMENT, and they further state that;
GENERAL REPRESENTATIONS
1. Taxpayer represents to the Secretary that:
a. It is a corporation organized and existing under the laws of the State of
Delaware;
b. Its employer identification number is 76-0235183;
c. It is duly authorized by the Puetto Rico Department of State to conduct business
in Puerto Rico;
d. It keeps its books of accounting on the accrual basis and its taxable year-ends on
December 31st of each year;
e. It is not under review or audit by the Secretary regarding the matters covered
under this CLOSING AGREEMENT.

2

REPRESENTATIONS CONCERNING THIS CLOSING AGREEMENT
2. Taxpayer further represents to the Secretary that:
a.

It filed its Puerto Rico Corporation Income Tax Retum for the years ended
December 31, 2003 and 2004 based on preliminary and unaudited figures since the
audited financial statements were not issued by the extended due date prescribed
by the Code to file the returns;

b. As a result of the issuance of the audited financial statements for the taxable year
ended December 31, 2003, the Taxpayer's taxable income increased, resulting in an
increase in the Taxpayer's total tax liability of $273,918, including interest
computed until Apri115, 2005;

c.

As a result of the issuance of the audited fmancial statements for the taxable year
ended December 31,2004, the Taxpayer's net operating loss increased, resulting in
an amended net operating loss of $2,343,249;

d. The taxpayer has an overpayment for the taxable year ended December 31, 2004 in
the amount of $517,500, based on audited figures for ta."{able years ended
December 31, 2003 and 2004;
e. Taxpayer wishes to use the income tax overpayment for the year ended December
31,2004 in the amount of$517,500 to offset the income tax liability in the amount
of $273,918 related to the taxable year 2003.

DETERMINATIONS AND AGREEMENTS

Based on the facts and representations made above, which are considered material facts,
Taxpayer and the Secretary agree as follows:

1. Taxpayer and the Secretary agree that the overpayment as of December 31,2004 in
the amount of $517,500 will be used retroactively to offset the income tax liability
of $273,918 (including interest computed until Aplil15, 2005) for the year ended
December 31, 2003;
2. Taxpayer and the Secretary agree that the rev:ised overpayment available as of
December 31, 2004 should be $243,5 82;

3
3. Taxpayer and the Secretary agree that the amended net operating loss available to
carry forward as of December 31,2004 should be $2,343,249;

4. Taxpayer and the Secretary agrees that, upon execution of this agreement, the
Taxpayer's Puerto Rico Income Tax Returns for the years ended December 31,
2003 and 2004 will be deemed as being amended to reflect the 2003 and 2004
audited numbers, retroactively use the income tax overpayment for the year ended
December 31, 2004 against the 2003 income tax liability and to properly carry
forward the revised overpayment of $243,582 and amended net operating loss of
$2,343,249 for the year ended December 31, 2004;

5. Taxpayer and the Secretary agree that the taxable years ended December 31, 2003
and 2004 are hereby closed for examination purposes;

GENERAL PROVISIONS

6. Pursuant to Section 6126 of the PRIRC this CLOSING AGREEMENT once
executed, shall be fmal and conclusive, and except when fraud, deceit or
misrepresentation of a material factor is shown, shall not be reopened for any
matters, nor shall this CLOSING AGREEMENT be reviewed or modified by any
officer, employee or agent of the Commonwealth of Puerto Rico, and this
CLOSING AGREEMENT shall not be armulled, modified, set aside or disregarded
in any suit, action or proceeding..

IN WITNESS WHEREOF, the parties hereto subscribe and execute this CLOSING
AGREEMENT in San Juan, Puerto Rico this

5

day of

:pe/ot!A7,c=

2010.

PETROBRAS AMERICA, INC.-PUERTO RICO OPERATIONS (a division of
Petro bras America, Inc.)

Form 400 20 Rev 12 06
l.kjuldator:
'Reviewer:

AMENDED

200_§_

Field audited by:

200- 6

COMMONWEALTH OF PUERTO RICO
DEPARTMENT OF THE TREASURY

Serial Number

(!] AMENDED RETURN

Corporation Income Tax Return
Date -----,-.iJ ____] - -

Paynuint Stamp

IIIIIII

TAXABLE YEAR BEGINNING ON
RIM IN
1/1
, 2006 AND ENDING ON 12/31 ' 2006
Employer ldenlificatlon Number
Taxpayer's Name
PETROBRAS AMERICA,tNC.- PUERTO RICO OPERATIONS
76-0235163
Postal Address
DepartmentofStateReglstryNo.
10777 Westheimer Road
12233-F
tndustnal Code Mun1ctpru COile
Suite 1200

I

Houston

TX
Zip Code 77042
"Place Label here".
Location of Principal Industry or Business - Number, Street, City
10777 Westhelmer Road Suite 1200

Contracts with Governmental Entities
Yes
0 No

t:

1.
c. 2.
"'
3.
4.
5.
t: 6.
c.
"' 7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
-20.
21.
t:
& 22.
23.
24.

( 713) 917 - 3700
Day~ Monlh...!£.1 Year 1987

Unfinished Crude Oil Importer

&l

Telephone Number - Extension
Date Incorporated

Type of Principal Industry or Business (i.e. Hardware, Cafeteria, etc.)
Check the corresponding box, if applicable
0 First return
0 Last return

Merchant's Registralion Number

CHANGEOFADDRESS
g) No
DYes
2007

QSpanish

RETURN

g) English

Place Incorporated
Delaware
E-mail Address

Receipt No.
Arriount

Net operating income (or loss) (From Part V, line 49) ....................................................................................................... (1)
Less: Net operating loss deduction from preceding year (Submit detail) ........................................................................................ (2)
Net income (or lossl .................................................................................................................................................... (3)
Less: Dividends or pronts received from domestic corporations or partnerships ............................................................................. (4)
Net income subject to normal tax (Subtract line 4 from line 3) ................................................................................................. (5}
Less: Surtax net income credit ......................................................................................................................................... (6}
Net Income subiect to surtax (Subtract line 6 from line 5) ....................................................................................................... (7)
Normal tax (Multiply line 5 by 20%) ................................................................................................................................... (B)
Surtax (See instructions) ................................................................................................................................................. (9)
Amount of recapture (See instructions) ................................................................................................................................ (10)
Special tax (See instructions) ............................................................................................................................................ (11}
Special tax lo entities operating under the "Puerto Rico Banking Act" (See Instructions) ............................................................. (12)
Total Tax (Add lines 8 through 12) ...................................................................................................................................... (13)
Alternative Tax- Capital Gains (Schedule D Corporation and Partnership, Part VIII, line 38) ..................................................... (14)
Tax Determined (Line 13 or 14, whichever is smaller) ............................................................................................................ (15)
Recapture of credit claimed in excess (Schedule BCorporation and Partnership, Part I, line 3) .......................................................... (16)
Tax credits.(Schedule B Corporation and Partnership, Part II, line 25) ....................................................................................... (17)
Tax liability before alternative minimum tax (Subtract line 17 from the sum of lines 15 and16) ...................................................... (18)
Alternative minimum tax (Schedule ACorporation and Partnership, Part V, line 33) ...................................................................... (19}
Branch profits tax (Form AS 2879, line 11) ............................................................................................................................ (20}
Tax on eligible Interest (See instructions) .............................................................................................................................. (21}
Total Tax Liability (Add lines 18 through 21) ....................................................................................................................... (22}
Less: Other Payments and Withholdings (Schedule BCorporation and Partnership, Part ill, line B) ........................................... (23)
Balance of tax due (If line 22 is larger lhan line 23, enterthedifference here,
0 00
a) Tax .................................................................................... (24a)
otherwise, on line 26)
0 DO
b) Interest ............................................................................... (24b)
0 00
c) Surcharges ......................................................................... (24c)
d) Total (Add lines 24(a) through 24(c)) ................................................................................ (24dl
25. Addition to the Tax for Failure to Pay Estimated Tax (Schedule TCorporation and Partnership, Part Ill, line48) .............................. (25}
26. Excess of tax paid or withheld (See instructions) .................................................................................................................... (26)
27. Amount paid with this return (Add lines 24(d) and 251ess line 26) ............................................................................................ (27}
28. Amount overpaid (Subtract lines 23 from the sum of lines 22 and 25. Distribute line 26 between line A or B):
A. To be credited to estimated tax for 2007 ................................................................................................................ (2BA}
B. To be refunded ............................................................................................................................................... (2BB)
Retention Penod. Ten (10) years

=

=

(863,246) 00
3,239,331 00
(4,1 02,577) 00
0 00
(4,102,577) od
0 DO
(4,1 02,577) DO
o'UU
0
0
0
0
0
0
0
0
0
0
0
0
0

DO

00
DO
DO

00
00
00
DO

00
00
00
00
00
0 DO
243,5B2 00

o lao
0 00
243,682 DO
0 DO

243,5B2 DO
0 DO
Reproducldo por CEG

Form 480.20

Corporation • Page 2

Rev. 12.06

1. Net sales ...................................................................................................................................~ ......... (1) t---=2:..:..7-'-'1,.:..:49:..::5-'-",3~93"'+"-'oo'-l
Less: Cost of goods sold or direct costs of production
2. Inventory at the beginning of the year
0 ·c· 0 ·c· or "MV"
(a) Materials ............................................................................................ (2a)
c 00
(b) Goods in process ................................................................................ (1b) 1 - - - - - - : 1 - " -""~·
c 00
(c) Finished goods or merchandise ........... .................................................. (2c)
c oo
3. Purchase of materials or merchandise .................. ,................................................. (J) t----,2;;7"1,"""56""9'""',9""1"'2P'o"'-~
0
4. Direct wages ...................................................................................................... (4) 1 - - - - - - - :oo~o
¥
5. Other direct costs (Detail in Part VI) .............................. ......................................... (5) !----==~=-=::-:~
Oo~o
6. Total cost or goods available for sale (Add lines 2through 5)....................................... (5) t----2_71..:,_56_9.:..,9_1_,2~-=o~o
7. Less: inventory atthe end of the year
0 ·c- 0;::--:::_::...::.:.:._ _:::-=::-1
·c· or "MV'
(a) Materials ..................................................... (7a) I
0 100
:=:
(b) Goods in process ......................................... (Jbl I
o joo
t::
(c) Finished goods or merchandise ....................... (7c) I
o loo
0 oo
271,569,912 oo
&. B. Gross profit on sales or production (Subtract the result of line 61ess line 7, from line 1)....................................................................... (8)
(74,519) 00
9. Net capital gain (Schedule D Corporation and Partnership, Part IV, line 22) ................................................................................... (9) l----'--"---:'o+0 0"~·
"-"
10. Net gain (or loss) from the sale of property other than capital assets (ScheduleD Corporation and Partnership, Part VI, line 39) ............... (10)
o 00
11. Rent ..................................................................................................................................................................................... tnl 1-----o~oo'"~·

~;: ~~~~~~s·l~~~··::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: :~~~ ~::::::::::::::::::::::::::::::::~~~··~~~~

14. Dividendsfromcorporationsandprofitsfrompartnerships: (a) Domestic
o
(b) Foreign
o
(14)
o 00
1------7+-""-1
15. Distributable share on net Income from special partnerships (ScheduleR, Part II, line B)..................................................................... (15)
o oo
16. Distributable share on net losses from special partnerships (ScheduleR, Part II, line 13) .................................................................... (16) 1------=o+o""o'"~
17. Taxable farming profit (ScheduleS Corporation and Partnership, Part I. line 9) ................................................................................. (17) 1-----:o:+"'oo'-1·
1B. Freight and fares .................................... ................ ....................... .......................................................................................... (18) 1------'o'+"'oo._,
19. Miscellaneous income ............................ .............................................................. ........................... ......................................... (19) 1----::::-:-::-:-:CO,..p<>oo._,
20. Total gross income (Add lines 8 t11rough 19) ............................................................................................................................. (20)
(74,519) oo
21. Compensation to officers (See instructions for Part X) ............................................................................... (21)
o 00
22. Salaries, commissions and bonuses to employees .................................................................................... (22)
207,765 oo
23. Commissions to businesses ................................................................................................................. (23)
o oo
24. Social security tax (FICA) ................................................................................................................... (24)
13,379 oo
25. Unemployment tax .................................................... ......................................................................... (25)
592 oo
26. State Insurance Fund premiums ........................................................................................................... (26)
o oo
27. Medical or hospitalization insurance ........................................................................................................ (27)
23,500 oo
28. Insurances ... ............................................................. ........ ... .... ..... ..................................................... (28)
504 00
29. Interest (See instructions)...................................................................................................................... (29)
o oo
30. Rent .. ..... ... .. ..... .... .. ...... ... ... .. ... .... .. ... ....... ... .. ... .... ... ........ .. ... ... ... ... ... ... .... .... ... .... ..... ... .... .... .... .... .... .... (30)
11 ,349 oo
31. Property tax: (a) Personal
0
(b) Real
0
........................................................ (31)
o oo
32. Other taxes, patents and licenses (See instructions) ................................................................................. (32)
o oo
33. Losses from fire, storm, other casualties or theft ....................................................................................... (JJ)
o oo
~ 34. Motor vehicle expenses ........... ...... .. .. .... .... .......... ...... ............. ................. ............ ......... .... ....... ..... .. .. ... (34)
o oo
&_ 35. Meal and entertainment expenses (Total
5,520
l (See instructions).................................... {35)
2,760 oo
36. Travel expenses ................................ .................................................... ............................................. (36)
29,656 oo
37. Professional services ........................................................................................................................... (37)
109,062 oo
38. Contributions to pension or other qualified plans (See instructions)................................................................ (38)
6 543 oo
39. Flexible depreciation (See instructions. Submit Schedule E) ....................................................................... (39)
o oo
40. Accelerated depreciation (See instructions. Submit Schedule E) ................................................................. {40)
o oo
41. Current depreciation and amortization (See Instructions. Submit Schedule E) ................................................ (41)
o oo
42. Bad debts (See instructions) .................................................................................................................. (42)
O oo
43. Charitable ~ontriiJutions (See instructions) .............. .............. ............ ............................ ............................. (43)
o oo
44. Repairs (See instructions)...................................................................................................................... (44)
o oo
45. Deduction for employers who employ handicapped persons (See instructions) .............................................. (45)
o 00
46. Contributions to educational contribution accounts forthe employees' beneliciaries (See instructions)...................... (46)
o oo
47. Other deductions (See instructions) ......................................................................................................... (47) .___ _...:3..:.8.;;.,3,..:.61""7...1..:...00'+------r-f
48. Total deductions (Add lines 21 through 47) .................................................................................................................................... (48)
788,727 oo
49. Net operating income (or loss) for the year (Subtract line 48 from line 20. Enter here and In Part I, line 1) .................................................. (49) 1---=-=-=-=-=:-l--1
(863,246) oo
Item
~
Amount
Item
Amount
0
1. Salaries, wages and bonuses ......................... t1l
o oo 8. Repairs .. ................................................................. (6) 1 - - - - - - ,:-1-!"oo"-1
0
2. Social security tax (FICA) ............................. (1l
o oo 9. Utilities .................................................................... l9l 1 - - - - - - - '"-+"'oo<-t
~ 3. unemployment tax ....................................... 131
0 00 10. Flexibledepreclation(SubmitScheduleE) ................... (10) 1-----~'-+"'~~"-t
&. 4. State Insurance Fund premiums...................... (•tl
0 00 11. Accelerateddepreciati(n(SubmhScheduleE)..................... (11) t - - - - - - :::+"',
0 00
5. Medlcalorhospitalizationinsurance ................. (5)
0 00 12. Currentdepreciatlon SubmitScheduleE) ................... (12) 1 - - - - - - + " ' " - 1
13. Other expenses (Submit detaiQ ................................... (13) 1-----o:.Poo,
. Other insurance ............................................ (6)
0 00
6
7. Excise taxes ................................................ m
o oo
0 00 14. Totalotherdirectcosts(Addlines1 through13. Same
as Part IV. line 5) ...................................................... /14)
Retention Period: Ten (10) years

Reproducldo por CEG

.,
Form 480 20 R 12 06
ev.

Corporallon - Page 3

Assets
1. Cashon hand and in banks ............................ (1)
2. Accounts receivable ................................... (2)
3. Less: Reserve for bad debts ....................... (3) II
4. Notes receivable ....................................... (4)
5.1nventories ................................................ (5)
6.1nvestments .............................................. (6)
7. Depreciable assets ..................................... (7)
8. Less: Reserve for depreciation .................... (B)
9. Land ........................................................ (9)
10. Other assets ............................................. (10)
11. Total Assets ............................................ (11)
Liabilities and Stockholder's Equity
5
t:
Liabilities
"'
a.. 12. Accounts payable ...................................... (12)
13. Notes payable .............................................. {13)
14. Accrued expenses ..................................... (14)
15. Other liabilities ........................................... (15)
16. Total Liabilities ....................................... (16)
Stockholder's Equity
17. Capital stock
(a) Preferred stocks .................................... (17a)
(b) Common stocks .................................... (17b)
18. Additional paid in capilal .............................. (1B)
19. Retained earnings ...................................... (19)
20. Reserve ................................................... (20)
21. Total Stockholder's Equity ....................... (21)
22. Total liabilities and Stockholder's Equity ....... (22) ··-

m

Corporation - Comparative Balance Sheet
Beginnin oftheYear
Total
0 00
293,510 00
0 00
...
,:

0 00
0 oo'

129,734
0
0
0

00
00
00
00

Ending of!he Year
Total

o oil

(1)
(2)

293,510 00
0 (Jb
0 00
0 00

(3)

I(

67,071,995 00
0 dO)
;•·

(4)
(5)

o oii

(6)
(7)

0 00 (B)
0 00 (9)
0 00
{10)
293,510 00 {11)

{12)
(13)
(14)
(15)

Ir

0 00
0 OQ)
...

00
00
00
00
00

00
00
00
00

121,211,542 00

(19)

0 00
0 00
0 00
(38,877,782) nn

(20)

0 00

(17a)
(17b)
(18)

1

163,776 00 (21)
293,510 00 (22)

-

0
0
243,582
82,333,760

121,211,542 on
0 00
0 00
0 00

129,734 00 (16)

0
0
0
163,776
0

67,071,995 00
0 00
16,018,183 00

Reconciliation of Net Income (or Loss) per Books with Net Taxable Income (or Loss) per Return
(866,006) 00 7. Income recorded on books thisyearnotincluded on this
1. Net income (or loss) per books .................... (1)
0 00
return (Itemize, use schedule ifnecessmy)
2. Income tax ............................................... (2)
0
3. Excess of capilallosses over capilal
(a) Exempt interest
0 00
0
gains ........................................................ {3)
(b)
0
(c)
4. Taxableincomenotrecorded on books this year
0
(d)
(Itemize, use schedule if necessary)
0
(a)
Total ................................................................... (l)
0
(b)
8. Deductions on this tax return not charged against book
0
(c)
income this year (Itemize, use schedule if necessary)
0
0
(d)
(a) Depreciation
- Total ........................................................ (4)
0 00
3,239,331
(b) NOL Prior Years
>
0
(c)
5. Expenses recorded on books this year not
0
(d)
claimed on this return (Itemize, use schedule if
necessary)
Total ................................................................... (B)
9. Total (Add lines 7 and 8) ...................................... (9)
(a) Meal and entertainment (amount
2,760
10. Net taxable income (or loss) per return (Subtract line
not claimed)
0
9 from line 6) ........................................................ (10)
(b) Depreciation
0
(c)
0
(d)
2,760 00
Total ........................................................ (5}
6. Total (Add lines 1 through 5) ...................... (6)
(863,246) 00
Analysis of Retained EarninQs per Books
m
163 776 DO 5. Distributions:
(a) Cash .................................. (5a)
1. Balance at the beginning of the year .............. (1)
(866,006) 00
(b) Property .............................. (Sb)
2. Net income per books ................................ (2)
(c) Stocks ................................ (5c)
~ 3. Other increases (Itemize, use schedule if
t:
0
6. Other decreases (Use schedule if necessary) ................. (6)
necessary)
a.
"'
0
7. Total (Add lines 5 and 6) .......................................... (7)
0 00 8. Balance at end of year (Subtract line 7 from
0 (3)
(702,230) 00
line 4) ................................................................... (8)
4. Total (Add lines 1, 2 and 3) ........................ (4)

(38,877,782) 00
82,333,760 00

m

0 00

&

Retenlion Pcnod: Ten (10) years

3,239,331 00
3,239,331 00
(4,102,577) 00

0 00

o1oo

0 00
38,175,552 loa
38,175,552 00
(38,877,782) 00
Reproducido por CEG

Name or amccr

Social securily numbe.r

Percenrago orthne
devoted to
industry or business

Percenmge or stocks owned

0.00%

0.00 %

0.00%

0.00%

0.00 %

0.00%

o.oo%

0.00 %

0.00%

o.oo%

0.00 %

0.00%

Total compensation lo officers

0.00%

0.00%

Compensation

0.00 %

(Enter in Pari V, line 21) ..............................................................................................................................

1. If a foreign corporation. indicate if the lmde or business in Puerto
Rico was held as a branch ......................................................
7.. if a branch, indicate the percent that represents the income from sources
within Puerto Rico from the total income or the corporation: ___%
o
3. Is the corporation under Section 936 or the Federal Internal Revenue
Code? .................................................................................. .
4. Did the corpora lion keep any part of Its records on a
computerized system during this year? ...........................................
5. The corporation's books are in care of:
Name The Corporation
Address __t:,2. Box 421688
Houston TX 77042-

6. Indicate the accounting method used for book (tax) purposes:
0 Cash
I!) Accrual
0 Other {specify):
7. Did the corporation file the following documents?:
(a) Informative Return (Forms 480.5, 4BO.GA, 480.68) ................. ..
(b) Withholding Statement (Form 499R·2/W-2PR) ......................... ..
8. If the gross income exceeds $1,000,000, are financial
statements audited by a CPA licensed in Puerto Rico included with this
mlurn? ....................................................................................,.,,

0
9. Number or employees during the year:
10. Did the corporation claim a deduction for expenses connected
with:
(a) Vessels? ...................................................................................
(b) Living expenses? ......................................................................
(c) Employees allending conventions or meetings outside Puerto Rico or
the United States? ..........................................................................
. Did the corporation distribute dividends other than stock dividends or
distributions in liquidation in excess of tho corporation's current and
accumulated earnings?...............................................................................
12. Is the corporation a partner in any special partnership? .........................
Name of the special partnership - - - - - - - - - - - Employer identification number - - - - - - - - - - - 3. Is the corporation a member or a controlled group? ..............................
4. Enter the amount or exempt interest:
o
s. Enter the amount corresponding Ia charitable contributions Ia municipalities
included in Part V. line 43:
o
16. Indicate if Insurance premiums were paid by an unauthorized

.,

Schedule A Corporation
and Partnership

Rav. 12.o•

200 6

ALTERNATIVE MINIMUM TAX
1/1

Taxableyearbeglnnlngon

2oos and ending on

Taxpayer's Name

12/31

2005

Employer ldentiflcalion Number

PETRO BRAS AMERICA, INC.· PUERTO RICO OPERATIONS

:. ,__ part I

76·0235183

Adjustments in tho Computation or the Alternative Minimum Net Income Before Books Adjustments and Operating Losses

1. Net income subject to normal tax without considering net operating loss from preceding years and excluding the net capital gain
that you had elected to pay taxes at the special rates (See instructions)............................................
r-----"";<'T'"::ii!tl+-_ _.:..!B_63.:..,2_4.:..6l:..J...:.oo·
1
2. Aqjustrnents:
a. Flexible depreciation..................................................................................... !2al
o oo
b. lnstallmentsales............................................................................................. (2bl
o 00.
c. Long -term contracts..................................................................................... !2cl
o oo
d. Expensesrelatedwithexemptinterest........................................................... !2d)
o oo
e. Accelerated depreciation............................................................................... (2el,__ _ _ _ _o~oo:.J·1-------.-.-1
f. Total adjustments (Add lines 2(a) through 2(e)) ................................................................................... !2ll ,__ _ _ _ _
o.;-=;oo,·
3. Alternative minimum net income before the adjustments of Part II and the operating loss (Add lines 1and 2(0) ................................................... !Jl
(863,246) W.':
Adjustment for the Excess of U1e Net income per Books over the Alternative Minimum Net Income Before Adjustments
Part II_ _
6
4. Net income (or loss) per books....................................................................................................... (4) t----'-(a_ss_,o_o-'l'-t-:'W,
5.
6.
7.
8.
9.
1o.
11.
12.
13.
14.
15.
16.
17.

Goodwill amortization expense.......................................................................................................... l5l ,__ _ _ _ _o-+-"m,·
0 00
Income tax expense per boaks....................................................................................................... (6) '-------'~f--------,,---,---.--.--1
Add lines 4, 5and6 .........................................................................................................................
Ql
(866,006)
Exemptinterestincomenetofrelatedexpenses................................................................................ (BJ,__ _ _ _ _
o+-oo-1
Dividends and profit distributions received from domestic corporations or partnerships, or from
industrial or tourism development income............................................................................. (9),__ _ _ _ _o-+-oo_,.
lndustrialdevelopmentincome, exempttourism development income or bona fide agricultural business
income............................................................................................................................................. (1o),__ _ _ _ _o+-ooi-l.
Income (or loss) recognized undertlle equity method....................................................................... ( 1 1 l l - - - - -0 1
::..t.:::00
o .0:)
Reserve forcatastroph. Iasses......................................................................................................... (12)1-------.-;;;;;
1c
Netlong-termcapitalgain (Seeinstructions).................................................................................... (13l..___ _ _ _ _
o.._-t-------:-r=t
Add lines 8through 13.............................................................................................................................................................
Subtract line 14 from line 7......................................................................................................................................................
Subtractlilie 3from line 15.1f line 3is larger than line 15, enter zero ......................................................................................
Adjustment for the excess ofthe adjusted net income per books overthe alternative minimum net income of line 3(Multiply line 16
by 50%) ................................................................................................................................................................................
·Part Ill

Computation of the Alternative Minimum Net Income

18. Alternative minimum netincome before the net operating loss (Add lines 3and 17) ..................................................................
19. Net operating loss to determine the alternati_ve minimum tax (See instructions) .........................................................................
20. Subtract line 19 from line 18 (Enter here the difference, but not less than 10% of line 18) ........................................................
21. Exemptamount(Seeinstructions) .............................................................................................................................................
22. Alternative minim.um nelincome (Subtract line 21 from line 20) ...........................................................................................;.... .
Computation of the Alternative Minimum Credit for Foreign Taxes Paid
Part IV
)l)
(23)
23. Tentative minimum tax (Multiply line 22 by 22'}o .............................................................................
86 _4...:
24. Alternative minir:num netincome before net operating loss deduction (Line 18) ................................. (24l ,__ _!;__3_,2 6l.,._,OO.J
25.
26.
27.
28.
29.
30.

0

00

00
Allowable exempt amount without considering tile net operating loss (See instructions).................. (25) t------=o+-::;;~
Subtract line 25 from line 24 ............. ................................................................................................. !26) 1------=o-~-"-oo.,
0
Multiply line 26 by22% .................................................................................................................. !27l ,___ _ _ _ _~oo_·i-----"71""=-1
0 00
Multiplyline27by10% .......................................................................................................................................................... (28)
0 00
Credit limitation (Subtract line 28 from line 23) ........................................................................................................................ (29)
Alternative minimum credit for foreign taxes paid (This amount cannot exceed the amount on line 29.
0 00
See instructions) ..................................................................................................................................................................... (30)

- Part If

Computation of the Alternative Minimum Tax

31. Tentative minimum tax (Subtract line 30 from line 23) ..............................................................................................................
32. Adjusted regular tax (See instructions) ....................................................................................................................................
33. Alternative minimum tax (Subtract line 32 from line 31. If line 32is larger than line 31, enter zero, otherwise, enter the difference
onForm480.10or 480.20,Partlll.line19 ..........................................................................................................................
RetentionPeriod:Ten(lO)years

(31)

0

(X)

(32)

0

00
~v.

!33)

o 'oo
Reproducido por CEG

Schedule B Corporation
Rev. 12.0G
and Partnership
RECAPTURE OF CREDIT CLAIMED IN EXCESS,
TAX CREDITS, AND
OTHER PAYMENTS AND WITHHOLDINGS
Taxableycarbeglnningon

1/1

2005 andcndingon

12131

200j)_
e

2006

~IUt:lltniLauull Number

Taxpayer's Name
PETROBRAS AMERICA, INC.- PUERTO RICO OPERATIONS

76-0235183

Recapture oflnvestment Credit and Conservation Easement Claimed in Excess
ColumnA

~

Column B

Name of entity:
Employer identification No:
Credit for:
Tomism Development .......................................................... 1 0
Solid Waste Disposal ........................................................... 20
Agricultural Incenlives ......................................................... 30
Capital Investment Fund ...................................................... 4 0
Theatrical District of Sanlurce ................................................
Film Industry Development ................................................... 6 0
Housing Infrastructure .......................................................... 70
Construction or Rehabilitation of Rental Housing Projects for low or
Moderate Income Families .............................................. a 0
Acquisition of an Exempt Business that is in the Process of Closing
ils Operations in Puerto Rico .......................................... 90
Conservation Easement ..................................................... 100
................................ 110
Other:

so

Column C

..................................................... 1 0 ..................................................... 1 r
..................................................... 20 ..................................................... 2 ~
..................................................... 30 ..................................................... 3 ~
..................................................... 4 0 ..................................................... 4 I""
..................................................... 5 0 ..................................................... 5 I"'
..................................................... so ..................................................... 6 :-..................................................... 7 0 ..................................................... 7 :...
....
..................................................... so ..................................................... so
..................................................... 90 ..................................................... 90
..................................................... 100 ..................................................... 100
110 ..................................................... 110
• .................................................. u

1. Totalcreditclaimed in excess ...................................................................................................................................................
2. Recapture of credit claimed in excess paid in previous year, if applicable .................................................................
3. Recapture of credit claimed in excess paid this year (Enter on Form 480.10 or 480.20,
Part lll,line 16. See instructions) ..............................................................................................................................................
4. Excess of credit due next year, if applicable (Subtract lines 2and 3from line 1. See instructions) ..........................................
Tax Credits (Do nolinclude estimated lax ~~vmPnl< Referto Parllll of this :;,cneoUie)

(1)

0 lotJ

lll

0 ·.~

(3)

Dloo

,

0 Iori

l"l

1. Credit fortaxes paid to the United States, its possessions and foreign countries (Schedule CCorporation and Partnership,
Part IV,Iine 7) ..................................................................................................................................................................... (1)
2. Credit for increase in investment (See instructions) ............................................................................................................... (2)
3. Credit for investment in Capital Investment, Tourism, other funds or directinvestment (Submit Schedule Q) ............................ (3)
4. Credit attributable to losses in Capital Investment, Tourism oro\herfunds (SubmitSchedules Qand Q1) ........................................... (4)
5. Creditfor Contribution to the Educational Foundation For Free Selection of Schools (See instructions) .................................. (5)
6. Credit for alternative minimum tax paid in previous years (See instructions) .......................................................................... (6)
7. Credit for the purchase oftax credits (Com[Jiete Part IV) (See instructions) .......................................................................... m
8. Credit for investment Act No. 362 of1999: D Film Project and/or 0 lnfraslructure Project (See instructions) ...................... lB)
9. Credit forinvestmentin Housing Infrastructure (See instructions) ........................................................................................ (9)
10. Credit for investment in the Construction or Rehabilitation of Rental Housing Projects for Low or Moderate
Income Families (See instructions) ..................................................................................................................................... 110)
11. Credit to investors in an exempt business that is in the process of closing its operations in Puerto Rico (See instructions) ............. [11)
12. Creditforpurchasesofproductsmanufactured in Puerto Rico and Puerto Rican agricultural products
(Submit Schedule B1 Corporation and Partnership) ............................................................................................................. [12)
Credit for contributions to Santa Catalina's Palace Patronage (See instructions) ................................................................... (13)
13.
14. Credit for the establishment of an eligible conservation easement or donation of eligible land (See instructions) .................. (14)
15. Credit for construction investment in urban centers (See instructions) .................................................................................. (15)
16. Credit for merchants affected by urban centers revitalization (See instructions) ..................................................................... [16)
17. Exemption for persons that operate as publisher (See instructions) ....................................................................................... (17)
18. Exemption for persons that operate as printer (See instructions) ........................................................................................... (18)
19. Exemption for persons that operate as bookseller (See instructions) ..................................................................................... (19)
20. Credit for the Extraordinary Tax of 2006 (See instructions) .................................................................................................. (20)
21. Credits carried from previous years (Submit detail) ............................................................................................................... (21)
22. Other credits not included on the preceding lines (Submit detail) (See instructions) .......................................:....................... (22)
23. Total Tax Credits (Add lines 1through 22) .......................................................... ................................................................. (23)
24. Total tax determined (Form 480.10or 480.20, Part lll,line 15) ........................................................................................... C24l
25. Credit to be claimed (The smaller of line 23 or 24. Enter on Form 480.10 or 480.20, Part Ill, line 17) ......................... ....... C25l
26. Ca11 yfu1 VV(lt_U_credits (Subtroctline 25 from line 23. Submit detail)........................................................................................ <26l
Retention Period: Ten l1 O) years

....

ml
o loo
o loa
olon
_0_ lri_ii_
0 lao
_0 l01

o loi
_0
0 lao
_0
0

1:
lOll
loo

Olnn
0 Ino
0
0
J) th
_()_
0 .

lao
'io
ill

o loi
IOI
_o tria
0

Olnn
_Q_iog

oloo
olao
o!oo
Re p roducido p orCEG

I

I
i

'

..
Schedule

Rev.12.06

Other Payments and Withholdings
1.
2.
3.
4.
5.
6.
7.
8.
.

Tax paid with automatic extension oftime ................................................................................................................................ .
Estimatedtaxpaymentsfor 2006 ........................................................................................................................................... ..
Tax paid in excess on previous years credited to estimated tax {See instructions) ................................................................. ..
Tax withheld at source ........................................................................................................................................................... .
Services rendered (Form 480.6B) ........................................................................................................................................ ..
Tax withheld at source on distributable share to partners of special partnerships (Form 480.6 SE) ........................................ .
Tax withheld at source on eligible interest ...................................................................................................... .
Total Other Payments and Withholdings (Add lines 1 through 7. Enter on Form 480.10 or 480.20,
Part Ill, line 23) ......................................................................................................................................................... ..

- . .

. -

-

-

: PartiV

Check the block corresponding to the act (or acts) under which you acquired the credit and enter the amount:
1. D Tourism Development......................................................................................................................................................
2. D SolidWasteDisposal........................................................................................................................................................
3. D Agricultural Incentives......................................................................................................................................................
4. D CapitallnvestmentFund..................................................................................................................................................
5. D TheatricaiDistrictofSanturce...........................................................................................................................................
6. D FilmlndustryDevelopment..............................................................................................................................................
7. D Housing Infrastructure......................................................................................................................................................
B. D Construction or Rehabilitation of Rental Housing Projects for Low or Moderate Income Families............................
9. D Acquisition of an Exempt Business thatis in the Process of Closing its Operations in Puerto Rico............................
0. D Conservation Easement......................................................................................................................................
1. D Urban Centers Revitalization ..............................................................................................................................
2. D Other:
3. Total credit for the
Retention Period: Ten (10) years

(1)

r------~

t2l 1----~~

l3l 1-----1=-1
l4l 1 - - - - - - ' - F - - 1

t5l r------~

l6l 1 - - - - - - ' - F , J

m1--------+-"-1
lBl

f------hc::.-f

(10)

1-----~

to) 1-------~-'-~
l11) r-------1-'+i
(12) 1 - - - - - - ' - F I
(13l

Reproducldo par CEG

Schedule D Corporation
Rev.12.06
and Partnership

GAINS AND LOSSES FROM SALE
OR EXCHANGE OF PROPERTY

Taxableyearbeglnningon

1/1

2006

andendingon

12/31

6
200---

2006

Taxpayer's Name

Jl

Employer Identification Number

PETROBRAS AMERICA, INC.- PUERTO RICO OPERATIONS

76-0235183

~ Short-Term Capital Assets Gains and Losses Held 6months or less)

Ac~~cd

Description and Location of Property

_
~:

sal~~rlce

(D)
Adjusted Basis

(E)
Selling Expenses

(F)
Gain or Loss
_.·~

,,.

lq9

oroo

oroo

o[QQ_

oroo

oroo

0

leo.

ol99

o loo

oroo

I''
0 100

o 'oo

0

o 'oo

Otoo_

'oo

1.
2.
3.
4.

Net short-term capital gain (or loss)..................................................................................................................................................
Net short-term capital gain (or loss) from investment funds (Submit Schedule Q1) ............................................................................
Distributable share on net short-term capital gain (or loss) from Special Partnerships.......................................................................
Net short-term capital gain (or loss) attributable to directinvestmentandnotthrough aCapital
Investment Fund (Submit detail) .......................................................................................................................................................
5. Net capital loss carryover (Submit detail).........................................................................................................................................
6. Net short-term capital gain (or loss) (Add lines 1through 5) .....................................................................................................
Loni!=Term Capital Assets Gains and Losses [Held more than 6months)

llmJI

0

Description and Location of Property

Fill mIf you

Prepaid
C)

(/1)

Date
Acquired

(B)

Date
Sold

• (D) .
AdJusted Bas1s

(C)

Sale Prfce
o[oo

0

oloo
0 loo

111
",
r,,

0 lob

r5l

olob
0 lob
0 lob

0 lob

(6)

-~

(F)
Gain or loss

(E)
Selling Expenses
ojOO

oiOQ

ojoo

.

C)

C)
C)

a roo

oroo

0

roo

oloo

oloo

oleo

0

roo

oloo

Oleo

Dlaa

o lao

.:

0
0

7. Net long-term capital gain (or loss)................................................................................................................................................... !7l
B. Distributable share on net long-term capital gain (or loss) from Special Partnerships........................................................................ ,.,
9. Net long-term capital gain (or loss) attributable to direct investment and notthrough aCapital
Investment Fund (Submit detail) .... .... ........... ... .... ... ..... ... ...... ................ .............. ... .......... ........ .... .......... ........... ......... ....... ..... ... ... .... . (9)
10. Net long-term capital gain (or loss) (Add lines 7 through 9) ...................................................................................................... (10l
~ Long-Term Capital Assets Gains and Losses (Held more than 6months) Realized under Speciall
. .
.
Flllln if you
(/1)
(B)
(C)
(D)
Descnp11on and LocaUon of Property
Prepaid
Ac'!~ed
g~;~
Sale Price
Adjusied Basis
C)

11. Net long-term capital gain (or loss) under Act:

(E)

1:

m

oa

no

0

oloo
0

!qb

(F)

Gainor loss

Selling~

I

:oo
(Decree No.
RetenllDn Penod: Ten (10) years

Q I QQ

o loa

Oioo

) (11)

0 loo

'

Reproducido por CEG

.

'

ScheduleD Corpor~lion and Parlnership ·Page 2

Rev.12.06

Summary of Capital Gains and Losses
Column A

Column B

Short-Term

Gains or Losses

Long- Tenn

Column .g_
Under Special
Legislation

0 ioo
0,00
112. Enter the gains determined on lines 6, 10 and 11 in the corresponding Column ................... 11
0 i]o
Q_Q()
'13. Enter the losses determined on lines 6,1 oand 11 in the corresponding Column ................. (131
':.<:,
14. If any of Columns Band Creflect a loss on line 13, apply the total to the gain in the other Column
0 00
(See instructions) ............................................................................................................................................... (14)
0 00
15. Subtract line 14 from line 12. If any Column reflected a loss on line 13, enter zero here ................................... (15)
0 oo
116. Apply the loss from line 13, Column A proportionally to the gains in Columns B and C (See instructions) .... !16)
0 00
17. Subtract line 16 from line 15 .:............................................................................................................................ (17)
18. Add the total of Columns Band C, line 17. However, if line 12 does not reflect any gain in Columns Band C, you must enter the
total amount of line 13, Columns Athrough C........................................................................................................................................... !1Bl
19. Net capital gain (or loss) (Add line 12, ColumnA and line 18) ............................................................................................................. !19)
20. Enter excess of net short-term capital gain over net long-term capital loss (See instructions) .......................................................... (20)
2 . Enter excess of net long-term capital gain over net short-term capital loss (See instructions) .......................................................... 1211
22. Net capital gain (Add lines 20 and 21. Enter here and on Form 480.10 or 480.20, Part IV, line 9 or on the appropriate line of
other
........................................................................................................................................................................................... (22)
uetefiiiiii(JLIUII of Alterrrauvci Tax 'Capital Gain

(a) Form 480.10 or 480.20, Part II, line 5
(b) Schedule PIncentives, Part I, line 7
(c) Others· Enter the amount from the appropriate line of the return ......................................................... !23)
24. Enter the amount from line 17, Column B............................................................................................................................................ !24)
Enter the amountfrom line 17, Column C........................................................................................................................................... (25)
Net income for purposes of alternative tax -c~pital_galn(Subtract lines 24 and 25 from line 23) .................................................. !26!
COMPUTATION OF NET INCOME TO DETERMINE AL"i t:KNAIIVE TAX
23. Net income ............

{

0 166
0
0

0 ;QQ

~'

ooo
0 00
0

.®.

Jl. QQ.
0

(4,102,577) 00
_0 DO
_!)

_(B)

Acouired

Sold

(C)
Sale Price

(D)
Adjusted Basis

(E)
Selling Expenses

Inn

oioo

.!>_dl.
ili.

27. Net income for purposes of partial normal tax (Enter the amount from line 26) ................................................................................. (27)
28. Less: Credit for purposes of surtax (From the appropriate line of the return) ................................................................................ (2Bl
29. Net income subject to partial surtax ...................................................:.......................................................................................... (29)
COMPUTATION OF ALTERNATIVE TAX
30. Partial normal tax (Multiply line 27 by 20%) .................................................................................................................................... (30)
31. Surtax ............................................................................................................................................................................................ (31)
32. Amount of recapture ...................................................................................................................................................................... (32)
33. Special tax .......................................................................................................................................................................................... (33)
34. Special tax toentitiesoperatingunderthe "Puerto Rico Banking Act" ................................................................................................... (34)
35. Total tax (Add lines 30 through 34) ..................................................................................................................................................... (35)
36. Plus: 20% of the amount on line 24 .............................................................................................................................................. (36)
37. Plus: __% (under special legislation) of the amount on line 25 (enter the applicable percent) ................................................. (37)
38. Alternative Tax. Capital gains (Add lines 35through 37. Enter the total here and transfer to Fann 480.10 or 480. 20, Part Ill, line 14
orto thel!J.I~' u~r1ate line ofotherreturn_s). ....,
........
........
.. ......................................,.. J3~l
Gains (or Losses) from Property Other than Capital Assets
_(A)

:oo

0 '()Q

~~~:

Description and Location of Property

ltio

0

Jl

oCIJ
orao
oroo
o:ao
o:oo
_() 1>Q

ooo
00

0

.00

0

o bo
(F)

Gain or Loss

0 00

o loo

0 00

0 11)0_

0

nn

Olnn

0

0

0

Inn

0 on

oloo

0 00.

o lao

0 00

o lao

0 00

nn

39. Net gain (or loss) from property other than capital assets (Enter here and on Form480.10 or 480.20, Part IV,
line 10 0r0n the OIJIJI U!JIICJ<ci lfiu:::UI Ull u:;l returns)'"""'"""""""""'""'"'""""'""""""""""'""""""'"""'"""""""'""""""""""""""'""" (39}
Retcn\lon Period: Ten (10) years

nil

o oo
1

Reproducldo por CEG

Schedule T Corporation
and Partnership

Rev. 12.06

ADDITION TO THE TAX FOR FAILURE TO PAY
ESTIMATED TAX IN CASE OF
CORPORATIONS AND PARTNERSHIPS
, uc~'""'"~ on _j/1

.2oos_~ndendlng

on 12/31

2006

200_§__
0

1axpayer s Name

Employer

RAS AMERICA, INC.- PUERTO RICO OPERATIONS

-

Number

76-0235183

tsumatedTax Required
1. Tax liability (Add lines 15,16,19 and 21 of Part Ill, page 1 of the return) ......................................................................................................

(1)

o lao

2.
3.
4.
5.
6.
7.

(2)

243,582100

a.

Credils and overpayments (See instructions) .........................................................................................................................................
Estimated tax (Subtract line 2 from line 1. If It is zero or less, do not complete this Schedule) ........................................................................
Line 1 multiplied by 90% ....................................................................................................................................................................
Subtract line 2 from line 4 (If it is zero or less, enter zero) .........................................................................................................................
Tax to be paid based on the income tax return from previous year (See instructions) ....................................................................................
Tax to be paid based on the income tax return from previous year determined according to the rates
corresponding to the current taxable year (See instructions) .....................................................................................................................
Enter the smaller of lines 5, 6 and 7.......................................................................................................................................................

(3)

l?d'l <;R?I

I00

(4)

_()
0

0
()

(5)

o·

(6)

oloo
o 1oo

(J)
(B)

~ection_A ·_Estimated Tax to Be Paid per"'"''"'-'"'""' Placing~ile Net Income on an Annual Basis

9. Basis Period (See instructions) ................................................................. 191
10. Enter the net income for each basis period ...... ...... ...................................... 1101
11. Divide line 10 between the number of months of tile basis
period on line 9 ........... ........................ ................ ... ........ ........ ......... .... .... ll1l
12. Net income placed on an annual basis (Multiply line 11 by 12) .......................... 11~
13. Determine the normal tax on the net income placed on an
annual basis of line 12 (Line 12 by 20%) ................................................... m1
14. Determine tile surtax on the net income placed on an
annual basis of line 12 ............................................................................. (141
15. Determine the recapture on the net income placed on an
annual basis of line 12 ............................................................................. 1151
16. Determine the special tax on tile netincome placed on an annual basis ofline 12 ....... ... n6J
17. Determine the special tax to entities operating underthe "Puerto Rico Banking Act"
on the net income placed on an annual basis of line 12 ................................. 1111
18. Determine the Alternative Tax- Capital Gains ............................................. 111
19. Tax Determined (Enter tile smaller between tile sum offines 13 through 17. or fine 18) ... (t9l
20. Enter the recapture of credit claimed in
excess or others .................................................................................... 1201
21. Determine the alternative minimum tax on the nelincome
placed on an annual basis of line 12 .......................................................... 121:
22. Total annual basis tax (Add lines 19 througil21) .......................................... 1221
23. Multiply line 22 by 90% .......................................................................... (231
24. Enter the credits and other payments per period (See instructions) ...................... (241
25. Estimated Tax to be Paid (Subtraclline 24 from line 23.1fit is
less than zero, enter zero) ....................................................................... 1251
26. Add the amounts of all previous columns of line 33 (See
instructions) ........................................................................................... 12s1
27. Subtract line 26 from line 25 (If it is less than zero, enter zero) ....................... (27l
28. Number of installments ............................................................................ !2BJ
29. Estimated Tax to be Paid per Installment Placing the Net Income on
an Annual Basis (Line 27 divided between line 28) ........................................ (29)
Section B- "'""lua•t:J Tax Required
j30.
31.
32.
:33.

Subtract line 26 from line 8 ......................................................................
Number of installments ...........................................................................
Line 30 divided between line 31 ...............................................................
Installment of Required Minimum Estimated Tax (Enter the
smaller of line 29 and line 32. Transfer to line 35) ........................................

. (c)

_rno11ths_

monU1s

First (d)o
monU1s

0 00

oloo

o Ioo

o loo

0 00
0 loo

0 100
0 00

o I oo
0 100

o loa
o Ioo

0 lao

0 00

0 00

o loo

0 00

o lao

0 00

o 'oo

0 00
0 lao

o lao
0 ,00

o Ioo
0 lao

0 00
0 00
O_QQ_
0 00

0 1w

0 00
0 00
0 00

~ 'oo

0 lao
0 100

0 00
0 00

0 lao

0 00

0 loa

0 00

0 lao

o ()o

0 'oo
0 00
0 00

o Ioo

o

0 lao

0 lao

0 Q()

0 Ia~

0 00
0 00
0 00

o loa

0 00

o log_

0 lao

0 00
0 OQ

0 lao

0 00

0 loa
0 IQQ

o 'oo

OIQQ

ojog
3

4

oloo

0 lao

ol oo

oloo
_3

4

oo

1

2
0 )00

0

(30)
(31)

(b)

First (a) o
months

o lao
o)oo

oloo
_2

_1

(32)

_(l_ IQQ

~ 1 oo

0 00

0 lao

(33)

o 'oo

0 00

0 00

o loE_

1

.

Retention Pe~iod: Ten (1 OJ years

Reproducldo por CEG

Schedule T

(a)
(b)
(c)
(d)
34. Due dale (See instructions)
Third lnstallmert
Rrstlnsta\lment
Second Installment
Fourth Installment
CALENDAR YEAR
FISCAL YEAR (Enter the corresponding dales) ................................... (34l l=====r::::J-=====;::*====::;=+=====r=-1
35. Amount of minimum estimated tax per installment (If you
completed Section Aand Bof Part I, enter line 33. Otherwise,
see instructions) ..................................................................................... t3sJ,__ _ _----=.~4----~~~-----=-t"!!..f-----=-.p!,l'-J
36. Amount of estimated lax paid per installments (See instructions) .................... (36)
37. Payment dale (See instructions) ............................................................... l31l ~------~~--------~~------~~~------~~
1----------+--------~-r------~.-,_______~~
38. Line 44 from previous column ...................................................................
39. Add lines 36 and 38 ................................................................................ l39l 1----~fll'L~---~JlllL~----::..1-""-t----~l..lllL.J
40. Subtract line 35 from line 39 (If it is zero or less, enter zero) .......................... t4Dl t-----=-1='~-----=-!=i~----=-!-"-"-t----_..;:_f-'!14
41. Failure to Pay (If line 40iszero, subtract line 39 from line 35.
Otherwise, enter zero) ............................................................................ (41l 1-------=-1""'4-----=-1""+------::+=t------=-"-"":-1
42. Add lines 41 and 43 from previous column ................................................. 142)
43. If line 42 is equal orlargerthan line 40, subtract line 40 from
line 42 and go to line 38 of next column. Othe1wise, go to line 44 .................................. l43l
44. Overpayment (If line 40 is larger than line 42. subtract line 42
1-----rlr------t=lr------,A
from line 40, and go to line 38 of next column. Otherwise, enter
zero) ....................................................................................................

B

45. Multiply line 41 by 20% (See instructions) ................................................. {45lf----....!::l!!!!.J-----__::_t.!!l!f----__::_t~-----..::..t..1!!LJ
46. Number of days from the due date to the payment date (See
0
instructions) ............................................ ............ ................................... l45ll---=:__-.,_.t---.:....__--.-+---=---,--!---__:----,,..,.-~
47.
Line 46
365 X line 45 (See instructions) ..................................................... (41ll---__::..ll!.!l.!_ _ __::_l.l!!LL_ _ __.::Jt.=/-------=-if-li:ILI
48. Addition to the Tax for Failure to Pay (Add the amounts from
columns of line 47. Transfer to page 1. Part Ill, line 25 of!he return) ...............................

Reproducido por CEG

Form AS 2879
Rev. 12.96
Rep. 05.02

Foreign Corporations and Partnerships
Tax on Dividend Equivalent Amount
and Effectively Connected interest
(Branch Profits Tax)

Taxpayer's Name

200.§
Employer Identification Number
76·0235183

PETROBRAS AMERICA, INC,· PUERTO RICO OPERATIONS

This schedule applies to foreign corporations and partnerships that derived less than 80 percent of
their combined total gross income, during the taxable year and the preceding two taxable years, from sources within Puerto Rico
or from income treated as effectively connected with the operation of a trade or business in Puerto Rico (see instructions). if the
corporation or partnership derived 80 percent or more of its combined total gross income as described here, do not complete this
schedule.
NOTE TO THE TAXPAYER:

-

1. Enter regular income before any net operating loss deduction (Income Tax Return Forms 480.1, 480.10,
....................
480.2; 480.20, Part I, line 1 or Forms 480.3(11) and 480.30(11), Schedule P, line 17)

(1)

(863,246)

00

2. Additions:

............

a) Enter excess of flexible depreciation over straight-line depreciation
b) Exempt interest income under Section 1022(b)(4) of Puerto Rico Internal
Revenue Code of 1994, as amended (Code}, net of related expenses

(2a)

••.•••..•. (2b)

0

00

0

00

0

00

c) Other additions (See Section 1119 of the Code):

(2c)

3. Total additions. (Add lines 2(a) through 2(c})

·········································-············ ······

(3)

0 00

4. Deductions:
(4a)

a) Taxes paid (Enter the sum of normal tax, surtax, and alternative minimum tax).
b) Previous year Branch Profits Tax

.••••.•••••••••.•••••••.•••..••.•••••.•.•.•••.•. (4b)

0

00

0

00

c) Enter interest deduction attributable to interest derived from exempt obligations
(Applicable to financial institutions only. See instructions)
d) Meals and entertainment (Non-deductible)
e) Penalties

•..•••••..••.••.•• - •.•• (4c)

•••...••.••.•.••..•..•••••.•.•••••.••. (4d)

• -.- •• -----.----.- • ·.- • ·-. • ·-- • • •• • • • • • • ·- • • • • • • ·.- · ·--- ·-- · ·-- • • • •• · •• · • • (4a)

f) Other deductions (See Section 1119 of the Code)
5. Total deductions (Add lines 4(a) through 4(f))

......•.....•..................• t4n

00

2,760

00

0

00
00

0

....................... ...... ......... .....................

6. Effectively connected earnings and profits (subtract line 5 from the sum of lines 1 and 3)
7. Enter Puerto Rico net equity at the end of the current taxable year
8. Enter Puerto Rico net equity at the end of the previous taxable year

·············

·····································

(7)

.............

(9)

• ••••••••••••••••••.••••••••• (10)

. .•.••••••••.•••••.•.•••••.••••••••.••.••.••••••••••. (11)

Conse!Vatlon Period. Ten (10) years

00
00

(2,555,073)

00

(1,639,139)

00

(915,934)

00

0

00

0

00

(6)

(8)

10. Dividend equivalent amount (Subtract line 9 from line 6. See instructions)

2,760
(866,006)

(5)

....................................

9. Increase/decrease in Puerto Rico net equity (Subtract line 8 from line 7. See instructions)

11. Branch profits tax liability (Multiply line 10 by 10%)

0

Reproducldo por CEG

PETROBRAS AMERICA, INC. - PUERTO RICO OPERATIONS
ACCOUNT NO.: 76-0235183

STATEMENT TO BE ATTACHED TO AND MADE PART OF THE
AMENDED PUERTO RICO CORPORATION INCOME TAX RETURN
FOR THE YEAR ENDED DECEMBER 31, 2006
STATEMENT OF OTHER DEDUCTIONS
PAGE 2, PART V, LINE 47

DESCRIPTION

AMOUNT

Inspection Expense
Duties
Other Operating Expense
Materials & Supplies
Maintenance & Repairs
Postage & CoUI·iet·
Advertising
Membership & Subscriptions
Employee Related Expenses
Telecommunication Service
Equipment Rental
Other Miscellaneous Expenses
Cost Recovery

$

376,872
167,353
14,997
3,029
1,834
3,280
2,981
6,054
4,254
10,700
9,312
53,328
(270,377)

TOTAL OTHER DEDUCTIONS

$

383,617

PETROBRAS AMERICA, INC.- PUERTO RICO OPERATIONS
ACCOUNT NO. 76-0235183

STATEMENT TO BE ATTACHED TO AND MADE PART OF THE
AMENDED PUERTO RICO CORPORATION INCOME TAX RETURN
FOR THE YEAR ENDED DECEMBER 31, 2006
CHARITABLE CONTRIBUTIONS CARRYFORWARD

AMOUNT
USED

AMOUNT

YEAR
$

14

$

$

12/31/2004

14

BALANCE

$

TOTAL CHARITABLE CONTRIBUTIONS
CARRYFORWARD TO 2007

$

14

$

14

EXPIRATION
DATE

12/31/2009

PETROBRAS AMERICA, INC.- PUERTO RICO OPERATIONS
ACCOUNT NO.: 76-0235183

STATEMENT TO BE ATTACHED TO AND MADE PART OF THE
AMENDED l'UERTO RICO CORPORATION INCOME TAX RETURN
FOR THE YEAR ENDED DECEMBER 31, 2006
STATEMENT OF OTHER DECREASES
PAGE 3, PART IX, LINE 6

DESCRIPTION

AMOUNT

Net Investment from PAI

$

38,175,552

TOTAL OTHER DECREASES

$

38,175,552

PETROBRAS AMERICA, INC.- PUERTO RICO OPERATIONS
ACCOUNT NO.: 76-0235183

STATEMENT TO BE ATTACHED TO AND MADE PART OF THE
AMENDED PUERTO RICO CORPORATION INCOME TAX RETURN
FOR THE YEAR ENDED DECEMBER 31,2006
SCHEDULE OF NET OPERATING LOSS CARRYFORWARD FOR REGULAR TAX PURPOSES

LOSS
CREATED

YEAR CREATED
2004
2005
2006

$

2,343,249
896,082
863,246

TOTAL NOL CARRYFORWARD
AVAILABLE FOR DECEMBER 31, 2007

AMOUNT USED
$

BALANCE
$

2,343,249
896,082
863,246

$

4,102,577

EXPIRATION
YEAR
2011
2012
2013

PETRO BRAS AMERICA, INC. -PUERTO RICO OPERATIONS
ACCOUNT NO.: 76-0235183

STATEMENT TO BE ATTACHED TO AND MADE PART OF THE
AMENDED PUERTO RICO CORPORATION INCOME TAX RETURN
FOR THE YEAR ENDED DECEMBER 31,2006
SCHEDULE OF NET OPERATING LOSS CARRYFORWARD FOR AMT PURPOSES

LOSS
CREATED

YEAR CREATED
2004
2005
2006

$

2,343,249
896,082
863,246

TOTAL AMT NOL CARRYFORWARD
AVAILABLE FOR DECEMBER 31, 2007

AMOUNT USED
$

BALANCE
$

2,343,249
896,082
863,246

$

4,102,577

EXPIRATION
YEAR
2011
2012
2013

PETROBRAS AMERICA, INC.- PUERTO RICO OPERATIONS
ACCOUNT NO. 76-0235183

STATEMENT TO BE ATTACHED TO AND MADE PART OF THE
AMENDED PUERTO RICO CORPORATION INCOME TAX RETURN
FOR THE YEAR ENDED DECEMBER 31, 2006
REASON FOR AMENDMENT

The taxpayer hereby amends the Corporation Income Tax Return for the year ended December 31, 2006 in
order to reflect the balances from the 2006 Audited Financial Statements and to properly carry forward the
NOL and overpayment fi·om the amended 2005 return.

AMENDED
COMMONWEALTH OF PUERTO RICO
DEPARTMENT OF THE TREASURY

200_5__

Corporation Income Tax Return
I

I

Taxpayer's Name
Petrobras America, Inc. • Puerto Rico Operations

Postal Address
P.O. Box 421688
Industrial Code

TX

Houston

Zip Code 77242

"Place Label here"
Location of Principal industry or Business - Number, Street, City
t03SO Richmond Avenue, Suite 1400 Houston, TX 77042

( 713 ) 808 - 2137
Date Incorporated

Type of Principal industry or Business (i.e. Hardware, Cafeteria, etc.)

Unfinished Crude Oil Importer

Day.....!2J Month....!Q..) Year
CHANGE OF ADDRESS

Check the corresponding box, if applicable

D

First return

D

Last return

DYes

Contracts with Governmental Entities

IX] Yes

O No

lliJ No

2006 RETURN

0

Spanish

lRJ

1987

Place Incorporated
Delaware
E-mail Address

English

1. Net operating income (or loss) (From Part v, line 49) ........................................................................................................................................ (1)

1---__:(_89_6.;..,0_8...:2)-!i;;:;;~llH;;,:

& 2. Less: Net operating loss deduction from preceding year {Submit detaiQ ................................................................................................................. (2) 1----2.:.,3_4...:3,_24_9-l+ifa.,o,..·
3. Net income (or loss) .......................................................................................................................................................................................... (3)

(3,239,331)

:log::

0 i6t~
4. Less: Dividends or profits received from domestic corporations or partnerships..................................................................................................... (4) t------~:;:H

~ 5. Net income subject to normal tax (Subtract line 4 from line 3) .....................:..................................................................................................... (5) t---""(3..::,2;;:..39'-'';;..;33;...;.1~)s]'~o:i-1·
6': 6. Less: Surtax net income credit............................................................................................................................................................................. (6) t-------o-Pito,;:;ij':-1:
(3,239,331) :lib"'
0 ::o_o·
8. Normal tax (Mulliply line 5 by 20%) ....................................................................................................................................................................... (B) 1-----_..:.+'H
0 'O[t
9. Surtax (See instructions) ...................................................................................................................................................................................... (9) t--------"-1-:"""rl
0 :·aoY
10. Amount of recapture (See instructions) ................................................................................................................................................................. (10) t------~~
0 00'
11. Special tax (See instructions) ............................................................................................................................................................................... (11)1------:-t'E-1
0 Jfo:
12. Total Tax (Add lines athrough 11) ....................................................................................................................................................................... (12) 1---------r~
0 •,'Qo_t
13. Allernative Tax- Capital Gains (ScheduleD Corporation and Partnership, Part VIII, line 61) .................................................................................. (13)1-------''-H::,::.:.j
0 ;o!l
14. Tax Determined (Line 12 or 13, whichever is smaller) ......................................................................................................................................... (14)1------+~
0 ~00'
15. Recapture of credit claimed in excess (Schedule B Corporation and Partnership, Part!, line 3) ............................................................................. (15) 1-------=~~
0 coo:·
16. Tax credits (Schedule BCorporation and Partnership, Part II, line 24) ................................................................................................................. {16)1--------''-+:,;;,.t
0 'Olf
17. Tax liability before alternative minimum tax (Subtract line 16 from the sum of lines 14 and 15) ........................................................................ (17)1-------=:...r~
0 \QQ)
18. Alternative minimum tax (Schedule A Corporation and Partnership, Part V, line 33) ............................................................................................... (18)1--------H:=-t
0 ;g_Q,
19. Branch profits tax (Form AS 2879, line 11) ........................................................................................................................................................... (19)1-------::-t":::::'-1
0 •:•00'
20. Tax on eligible interest (See instructions) ............................................................................................................................................................. (20)1--------:+.B
0 QO':
e 21. Total Tax Liability (Add lines 17through 20) ...................................................................................................................................................... (21)
~ 22. Less: Other Payments and Withholdlngs (Schedule B Corporation and Partnership, Part Ill, line 8) .................................................................. (22) 1--------H"""'
243,582
23. Balance of tax due (If line 21 is larger than line 22, enter the difference here,
otherwise, on line 25)
a) Tax ................................................................................................................ (23a)
0 OQ ·
b) Interest ........................................................................................................... (23b)
o 'oo
c) Surcharges ..................................................................................................... (23c),___ _ _ _ _..:.O...l...-"O:::.O-I---------,r:--l
d) Total {Add lines 23(a) through 23(c)) ............. ,............................................................................................... (23d)l--------.,o,....r.,.·o""o,..·
24. Addition to the Tax for Failure to Pay Estimated Tax (Schedule T Corporation and Partnership, Part Ill, line 46) ............................................ (24) 1------::-:-::--::::-:o:-t;;.:"O=-:Q'-1~·
25. Excess of tax paid or withheld (See instructions) ................................................................................................................................................. (25) 1-----2_4_3,:...5_82-+i;:p,._g'-1,.
26. Amount paid with this return (Add lines 23{d) and 24less line 25) ...................................................................................................................... (26) t------o-H"o;,.,:O.:-t.·
27. Amount overpaid (Substractlines 22 from the sum of lines 21 and 24. Distribute line 25 between line A or B):
,
243 582
A. To be credited to estimated tax for 2006 .............................................................................................................................................. (27A)I-_ _......;___;:...._-r,;~
B. To be refunded .................................................................................................................................................................................... (27B)
o .:Q:9;
7. Net income suQject to surtax (Subtrac11ine 6 from line 5) .................................................................................................................................. (7)

·oa:

;ti!

Conservation Period: Ten (10) years

Computer Expert Group

I<PMG LLP
American International
Suite 1100
250 Munoz Rivera Avenue
San Juan, PR 00918-1819

Independent Auditors' Report
Board of Directors
Petrobras America Inc.:
We have audited the accompanying balance sheet of Petrobras America Inc.'s Puerto Rico Operations
(the Division) as of December 31, 2006, and the related statements of operations, intracompany interest,
and cash flows for the year then ended. These financial statements are the responsibility of the Division's
management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes consideration of
internal control over financial reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Division's
internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
financial position of Petro bras America Inc, 's Puetio Rico Operations as of December 31, 2006, and the
results of its operations and its cash flows for the year then ended in conformity with U.S. generally
accepted accounting principles.
As discussed in Note 8 to the financial statements, Petrobras America Inc. ceased operations in Puerto Rico
in Iv!arch 2008 upon expiration on Decembet· 31, 2007 of its customer contract.
As discussed in Notes 1 and 6 to the financial statements, the Division has significant transactions with
affiliated entities. The accompanying financial statements may not necessarily be indicative of the
conditions that would have existed or the results of operations if the Division had operated without these
affiliate transactions.

License No. 21
Expires December I, 2010

August 31·, 2009

2446314

KPMG LLP. a U.S. limited liability partnership, is the U.S.
member firm of KPMG International, a Swiss cooperative.

PETROBRAS AMERICA INC.- PUERTO RICO OPERATIONS
(A Division of Petro bras America Inc.)
Balance Sheet
December 31, 2006

Assets
Current assets:
Trade receivables
Inventories

$

Total current assets

67,071,995
15,018,183
82,090,178

Prepaid taxes

243,582

Total assets

$

82,333,760
========

$

118,722,315
2,489,227

Liabilities and Intracompany Interest
Current liabilities:
Accounts payable and accrued liabilities:
Affiliates
N onaffi Hates
Total current liabilities

121,211,542

Total liabilities

121,211,542

Intracompany interest
Accumulated deficit

(36,322,709)
(2,555,073)

Total intracompany interest

(38,877,782)

Total liabilities and intracompany interest

See accompanying notes to financial statements.

2

$ ==82=,3=3=3=,
7=60==

PETROBRAS AMERICA INC.- PUERTO RICO OPERATIONS
(A Division ofPetrobras America Inc.)
Statement of Operations
Year ended December 31, 2006

$

Fuel oil sales
Fuel oil costs

271,495,393
271,569,912

Gross loss

(74,519)

Operating expenses:
Unloading inspection expense
Duties
Other operating expense
General and administrative allocation
Professional fees

376,872
167,353
14,997
187,265
45,000
791,487

Total operating expenses
Net operating loss

(866,006)

Loss before income tax benefit

(866,006)

Income tax expense

$

Net loss

See accompanying notes to financial statements.

3

(866,006)

PETROBRAS AMERICA INC.- PUERTO RICO OPERATIONS
(A Division of Petro bras America Inc.)
Statement oflntracompany Interest
Year ended December 31,2006

Intracompany
interest
Balance- December 31, 2005

$

Net fun~ing from PAl

1,802,915

(1,689,067)

(38,125,624)

Total
113,848
(38,125,624)

(866,006)

Net loss
Balance- December 31, 2006

Accumulated
deficit

$

See accompanying notes to financial statements.

4

(36,322,709)

.(866,006)

(2,555,073)

(38,877,782)

PETROBRAS AMERICA INC.- PUERTO RICO OPERATIONS

(A Division ofPetrobras America Inc.)
Statement of Cash Flows
Year ended December 31, 2006
Operating activities:
Net loss
Adjustments to reconcile net loss to net cash provided by
operating activities:
.
Changes in operating assets and liabilities:
,Increase in accounts receivable
Increase in inve11tories
Increase in accounts payable:
Affiliates
Nonaffiliates

$

(866,006)

(67,071,995)
(15,018,183)
118,722,315
2,359,493

Net cash provided by operating activities

38,125,624

Financing activity:
Intracompany funding activity, net

(38,125,624)

Net cash used in financing activity

(38,125,624)

Net increase (decrease) in cash and cash equivalents
' Cash and cash equivalents at beginning of year
$

Cash and cash equivalents at end of year
See accompanying notes to financial statements.

5

=====

PETRO BRAS AMERICA INC.- PUERTO RICO OPERATIONS
(A Division ofPetrobras America Inc.)
Notes to Financial Statements
December 31, 2006

(1)

Organization
Petro bras America Inc. - Puetio Rico Operations (the Division) is a division of Petrobras America Inc.
(PAl or Corporate or the Company), a U.S. Corporation and a wholly owned subsidiary of Petrobras
International Braspetro B.V. in Netherlands (the Parent), was formed on October 15, 1987 to acquire, own
and operate rights-of-way and operating rights for the purpose of conducting oil and gas exploration and
development activities on the Outer Continental Shelf of the United States of America. PAl's working
capital needs are primarily funded by its Parent company and through cash flow from operations. The
Division is dependent on PAI for financial suppoti. In 1990, PAl expanded its business activities to include
the purchase of petroleum industry equipment, spare parts, and similar related products (procurement
activities) for sale to the Parent or its affiliates and to include the purchase and sale of crude oil and refined
products from and to foreign companies and companies in the' United States.
On August 7, 2002, P AI registered with Puetto Rico Department of State and was authorized to do
business in Puetto Rico as a foreign corporation. In December 2002, PAl was selected as the supplier of
No.6 residual fuel oil to the Puerto Rico Electric and Power Authority (PREP A) on an one-year contract
with automatic renewal of one year, which ended in December 2004. PAI concluded its Puerto Rico
operations related to this contract in January 2005.
In May 2006, Petro bras International Finance Company (PIFCO), an affiliate of PAl, was selected as the
supplier of No.6 residual fuel oil to PREP A on an one-year contract with automatic renewal of one year.
Since PIFCO did not register with Puerto Rico Depattment of State and was not authorized to do business
in Puerto Rico as a foreign corporation, it assigned all of its rights and obligations under the PREP A Fuel
Purchase Contract to PAI in May 2006.
PAI purchases the No. 6 residual fuel oil fi:om its parent and/or other affiliates and stores the inventory in
storage tanks located in San Juan and Palo Seco steam plants, a location designated as a Foreign Trade
Zone. PAI does not maintain employees or offices in Puerto Rico.

(2)

Summary of Significant Accounting Policies

(a)

Basis of Presentation
The accounts of the Company are maintained on the acctual basis of accounting in accordance with
accounting principles generally accepted in the United States of America.
The accompanying financial statements present, on a historical cost basis, the assets, liabilities,
revenue, and expenses related to the Division as of and for the year ended December 31, 2006. These
statements are presented as if the Division had existed as a separate entity during the period
presented.
The Division incurs certain common costs, which relate to both the Division and other PAI
operations, and management has made allocations of these costs to the Division. These costs include
general and administrative (G&A) expenses such as salaries and other administrative expenses.

6

(Continued)

PETROBRAS AMERICA INC. -PUERTO RICO OPERATIONS
(A Division ofPetrobras America Inc.)
Notes to Financial Statements
December 31, 2006

Intracompany interest reflects PAl's historical-cost-basis balances within the Division, accumulated
earnings and losses of the Division, and intracompany activity with PAl that are not settled on a
cunent basis.
The Division is part of PAI and has no separate legal status or existence. Its resources and existence
are at the disposal of Corporate management. The Division's assets are legally available for the
satisfactions of debts of the entire corporation, not solely those appearing on the accompanying
balance sheet, and its debts may result in claims against assets not appearing thereon. ·

{b)

Cash
All cash and cash equivalents are transfened to PAI through the intracompany intt:?rest account on a
cunent basis and are excluded from assets on the accompanying statements. The Division is part of a
centralized cash management system of PAI, whereby all cash disbursements of the Division are
funded by, and all cash receipts are transfetTed to, PAL

(c)

Allowance for Doubtful Accounts
The Division routinely assesses the recoverability of all -material trade and other receivables to
detetmine their collectibility. The Division accrues a reserve on a receivable when, based on the
judgment of management, it is probable that a receivable will not be collected and the amount of any
reserve may be reasonably estimated. As of December 31, 2006, the Division had no allowance for
doubtful accounts.

(d)

Concentrations of Credit Risk
Substantially all of the Division's accounts receivable are due from PREP A. To date, this
concentration has not had a material adverse effect on the financial position of the Division.

(e)

Inventories
Inventories consist of No. 6 residual fuel oil, which is valued at the lower of cost, detetmined using
weighted average cost, or market.

(f)

Functional Currency
The U.S .. dollar is the functional currency for the Division. All transactions are denominated in
U.S. dollars.

(g)

Revenue Recognition
Sales revenue is recognized as fuel is sold at a determinable price, when deli"~ery has occurred, title
has transferred, and the col!ectibility of the revenue is reasonably assured.

(It)

Use of Estimates
The financial statements, which are prepared in conformity with generally accepted accounting
principles, include amounts that are based, in part, on management's best estimates and judgments.
7

(Continued)

PETRO BRAS AMERICA INC.- PUERTO RICO OPERATIONS
(A Division ofPetrobras America Inc.)
'

0

Notes to Financial Statements
December 31, 2006

Actual results could differ from those estimates. Significant estimates include the valuation of
accounts receivable, inventory and income taxes.
(3) ·

Inventories

For the year ended December 31, 2006, inventories pertaining to the Division consisted of the following:
No.6 Residual fuel oil

$

15,018,183

The fuel oil inventories in Puetto Rico are maintained at storage facility in San Juan, which is leased and
paid for by PREP A. Arrangement is made between PAI and PREP A to allow PAI to use this storage
facility free of charge.
(4)

Income Taxes

For the year ended December 31, 2006, a reconciliation of the United States statutory income tax expense
(benefit) to the effective amount is shown below:
Statutory income tax benefit
Additional taxes related to Puerto Rico
statutory tax
Valuation allowance expense

$

(173,201)
173,201

$=====
The Company recorded a valuation allowance against the 2006 net operating loss carryforwards. These
cumulative gross net operating losses of $2,781,868 will expire beginning in 2011. Management has
detetmined it is more likely than not these net operating loss carryforwards will not be realized.
The tax effects of temporary difference that give rise to significant portions of the deferred tax assets
(liabilities) at December 31, 2006 are as follows:
NOL carry forward

$

Gross defened tax assets

556,374
556,374
(556,374)

Less valuation allowance
Net defened tax assets

$

The Company has submitted a closing statement with the Puerto Rican Treasury Department to conect
certain overpayments and underpayments that were made during 2003-2005. The Company has recorded
a contingency related to these amounts that is reflected at December 31, 2006, recording the $243,582
overpayments in long term prepaid taxes on the balance sheet. The outcome is not assured as the closing
statement has not yet been accepted by the taxing authority and therefore results could differ from what is
recorded in the financial statements at Dec~mber 31, 2006.
8

(Continued)

PETROBRAS AMERICA INC.- PUERTO RICO OPERATIONS
(A Division ofPetrobras America Inc.)
Notes to Financial Statements
December 31, 2006

(5)

Intracompany Interest
The Division has been administered and fully funded by PAl. Since the Puetto Rico operations hold neither
separate cash account nor identifiable cash balance, all cash related transactions are recorded through
intracompany interests on the balance sheet and in the fmancial section of the cash flow statement on a net
basis.

(6)

Related-Party Transactions
Transactions related to Puerto Rico operations by the Company with its Parent and affiliated companies for
the year ended December 31, 2006 were as follows:

$

Purchase ofNo. 6 fuel oil

286,588,095

$

118,722,315

Balance due to related parties is as follows:
Accounts payable to Petro bras companies
(7)

Expense· Allocation
Allocated G&A expenses included in accompanying combined statements of income are allocated to
Puerto Rico operations based on monthly percentage of Puerto Rico sales to total P AI Trading sales for
2006.
Allocation percentage
Amount allocated

$

7.2%
187,265

The allocation percentage is based on sales that management has determined is reflective of the effort to
administer the activities of the Division.
(8)

Subsequent Event
The PREP A Fuel Purchase Contract expired on December 31, 2007 with the last delivery of fuel oil
performed in March 2008. The contract was not renewed for year 2008, and the Company's··operations in
Puerto Rico have ceased.

9