Petrobras reported net income of R$ 5 billion in the first nine months of 2017, reversing the loss recorded in the same period of the previous year and reflecting the improvement in operating performance, in line with the metrics established in the company's strategic planning. In the third quarter of 2017, our net income reached R$ 266 million, even at the level of the second quarter of 2017.

The safety indicator (TAR) continued to show progress and reached the end of the 1.09 recordable period per million man-hours. The Adjusted Net Debt / Ebitda, one of our top metrics, was reduced from 3.54 at 12.31.2016 to 3.16 at 09.30.2017.

Adjusted EBITDA was R$ 63.6 billion in the first nine months of 2017, with a 31% margin and stable in relation to the same period of the previous year. This result shows that the reduction in operating expenses and the increase in exports, with higher prices, compensated for the drop in derivatives margins. In addition, there were lower import expenditures due to the higher share of domestic oil in processed cargo and domestic gas in the sales mix. In the quarter, adjusted Ebitda was R$ 19.2 billion, also stable in relation to the previous period.

With stable operating generation and reduced investments, we achieved a free cash flow of R $ 37.5 billion in the first nine months of 2017. In the quarterly view, our free cash flow was R $ 14.7 billion in the third quarter quarter of 2017, thus completing the tenth consecutive quarter of positive free cash flow.

The continuity of active debt management made it possible to lengthen the average term of 7.46 years on 12.31.2016 to 8.36 years on 09.30.2017, combined with a reduction in the cost of debt, which came to 6.2% per year to 5.9% per year in the same comparison. Net debt in dollars fell 9% from US $ 96.4 billion on 12.31.2016 to US $ 88.1 billion on 09.30.2017.

In the first nine months of 2017, we recorded total oil and natural gas production of 2,776 thousand boed, being 2,660 thousand boed in Brazil, 3% higher than in the first nine months of 2016.

On the other hand, sales of oil products in the domestic market were impacted by the drop in demand and stronger competition with other players, reaching 1,959 thousand bpd, a decrease of 6% compared to the first nine months of 2016. We maintained our position as a net exporter with a balance of 385 thousand bpd, due to a 39% increase in oil and oil products exports and a 19% reduction in imports, compared to the first nine months of 2016. The increase in the share of oil contributed to the decrease in imports processed cargo.

In the quarter, the highlights were the increase in diesel sales, the improvement in the margins of distribution of derivatives and in the generation of energy, as well as the reduction of refining margins. In addition, the result was impacted by non-recurring items such as expenses with adhesions to programs for the regularization of federal debts and judicial contingencies.