EX-99.6 8 y00665exv99w6.htm EX-99.6: CONSOLIDATED ACCOUNTS & THE NOTES THERETO EX-99.6: CONSOLIDATED ACCOUNTS & THE NOTES THERETO
 

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Exhibit 99.6

Total financial statements

Second quarter and first half 2003 consolidated accounts, French GAAP

 

 

CONSOLIDATED STATEMENTS OF INCOME
Total

                                         
2nd quarter   2nd quarter           1st half   1st half
2003   2002   Amounts in millions of euros (1)   2003   2002
 
 
 
 
(unaudited)   (unaudited)           (unaudited)   (unaudited)
     
24,347
       26,435     Sales     52,650       50,219  
     
(20,298
 )      (22,352 )   Operating expenses     (43,508 )     (42,474 )
     
(1,179
 )      (1,324 )   Depreciation, depletion, and amortization     (2,408 )     (2,620 )
 
           Operating income                
     
(67
 )      (40 )   Corporate     (122 )     (106 )
     
2,937
       2,799     Business segments *     6,856       5,231  
     
2,870
       2,759     Total operating income     6,734       5,125  
     
(42
 )      (32 )   Interest expense, net     (84 )     (67 )
     
71
       78     Dividend income on non-consolidated subsidiaries     76       84  
     
(1
 )      (3 )   Dividends on subsidiaries' redeemable preferred shares     (3 )     (5 )
     
(231
 )      33     Other income (expense), net     (494 )     19  
     
(1,254
 )      (1,437 )   Provision for income taxes     (2,851 )     (2,486 )
     
275
       174     Equity in income (loss) of affiliates     526       415  
     
1,688
       1,572     Income before amortization of acquisition goodwill     3,904       3,085  
     
(36
 )      (48 )   Amortization of acquisition goodwill     (66 )     (84 )
     
1,652
       1,524     Consolidated net income     3,838       3,001  
     
47
       21     of which minority interest     113       69  
     
1,605
       1,503     NET INCOME **     3,725       2,932  
     
2.52
       2.23     Earnings per share (euro)***     5.80       4.37  
 
                                
     
2,937
       2,845     * Operating income from business segments, excluding non-recurring items     6,856       5,277  
     
1,719
       1,526     Net operating income from business segments, excluding non-recurring items     3,770       2,882  
     
1,767
       1,632     ** Net income (Group share), excluding non-recurring items     3,887       3,051  
     
2.77
       2.42     *** Earnings per share, excluding non-recurring items (euro)     6.05       4.54  
(1)   Except for earnings per share

 

 

CONSOLIDATED BALANCE SHEETS
Total

                                 
    Amounts in millions of euros
   
    June 30, 2003   March 31, 2003   December 31, 2002   June 30, 2002
   
 
 
 
    (unaudited)   (unaudited)           (unaudited)
ASSETS
                                
NON-CURRENT ASSETS :
                                
Intangible assets, net
     2,205       2,248       2,752       2,977  
Property, plant, and equipment, net
     36,661       37,773       38,592       39,273  
Equity affiliates : investments and loans
     7,738       7,857       7,710       7,605  
Other investments
     1,235       1,221       1,221       1,180  
Other non-current assets
     3,669       3,851       3,735       2,916  
Total non-current assets
     51,508       52,950       54,010       53,951  
CURRENT ASSETS :
                                
Inventories, net
     5,980       5,982       6,515       6,397  
Accounts receivable, net
     12,418       13,498       13,087       14,079  
Prepaid expenses and other current assets
     4,950       4,637       5,243       5,917  
Short-term investments
     1,663       1,489       1,508       1,283  
Cash and cash equivalents
     9,532       13,117       4,966       3,863  
Total current assets
     34,543       38,723       31,319       31,539  
TOTAL ASSETS
     86,051       91,673       85,329       85,490  
LIABILITIES & SHAREHOLDERS’ EQUITY
                                
SHAREHOLDERS’ EQUITY :
                                
Common shares
     6,881       6,874       6,872       7,101  
Paid-in surplus and retained earnings
     31,776       32,689       30,514       31,382  
Cumulative translation adjustment
     (1,946 )     (1,463 )     (830 )     (332 )
Treasury shares
     (6,960 )     (6,001 )     (4,410 )     (5,388 )
Total shareholders’ equity
     29,751       32,099       32,146       32,763  
SUBSIDIARIES’ REDEEMABLE PREFERRED SHARES
     438       459       477       501  
MINORITY INTEREST
     620       715       724       795  
LONG-TERM LIABILITIES :
                                
Deferred income taxes
     6,106       6,121       6,390       6,427  
Employee benefits
     3,896       3,931       4,103       3,236  
Other liabilities
     6,462       6,708       6,150       5,971  
Total long-term liabilities
     16,464       16,760       16,643       15,634  
LONG-TERM DEBT
     9,906       10,728       10,157       11,000  
CURRENT LIABILITIES :
                                
Accounts payable
     9,256       9,961       10,236       10,137  
Other creditors and accrued liabilities
     10,331       10,444       9,850       11,259  
Short-term borrowings and bank overdrafts
     9,285       10,507       5,096       3,401  
Total current liabilities
     28,872       30,912       25,182       24,797  
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
     86,051       91,673       85,329       85,490  

 

 

CONSOLIDATED STATEMENTS OF CASH FLOWS
Total

                                         
2nd quarter   2nd quarter           1st half   1st half
2003   2002   Amounts in millions of euros   2003   2002
 
 
 
 
(unaudited)   (unaudited)           (unaudited)   (unaudited)
 
           CASH FLOW FROM OPERATING ACTIVITIES                
     
1,652
       1,524     Consolidated net income     3,838       3,001  
     
1,266
       1,447     Depreciation, depletion, and amortization     2,564       2,824  
     
240
       73     Long-term liabilities, valuation allowances, and deferred taxes     (166 )     125  
     
101
       120     Unsuccessful exploration costs     161       244  
     
(49
 )      (175 )   (Gains)/Losses on sales of assets     155       (408 )
     
(13)
       71     Equity in income of affiliates (in excess of)/less than dividends received     (191 )     (132 )
     
1
       (13 )   Other changes, net     3       (11 )
     
3,198
       3,047     Cash flow from operating activities before changes in working capital     6,364       5,643  
     
(64
 )      (197 )   (Increase)/Decrease in operating assets and liabilities     592       (335 )
     
3,134
       2,850     CASH FLOW FROM OPERATING ACTIVITIES (1)     6,956       5,308  
 
           CASH FLOW FROM INVESTING ACTIVITIES                
     
(1,320
 )      (1,733 )   Intangible assets and property, plant, and equipment additions     (2,531 )     (3,350 )
     
(89
 )      (106 )   Exploration expenditures charged to expenses     (142 )     (213 )
     
8
       (50 )   Acquisitions of subsidiaries, net of cash acquired     8       (105 )
     
(33
 )      (60 )   Investments in equity affiliates and other securities     (38 )     (107 )
     
(74
 )      (151 )   Increase in long-term loans     (299 )     (434 )
     
(1,508
 )      (2,100 )   Total expenditures     (3,002 )     (4,209 )
     
49
       25     Proceeds from sale of intangible assets and property, plant, and equipment     126       103  
     
2
       5     Proceeds from sale of subsidiaries, net of cash sold     735       5  
     
66
       339     Proceeds from sale of non-current investments     68       652  
     
40
       94     Repayment of long-term loans     221       289  
     
157
       463     Total divestitures     1,150       1,049  
     
(174
 )      (317 )   (Increase)/Decrease in short-term investments     (155 )     (279 )
     
(1,525
 )      (1,954 )   CASH FLOW FROM INVESTING ACTIVITIES     (2,007 )     (3,439 )
 
           CASH FLOW FROM FINANCING ACTIVITIES                
 
           Issuance and repayment of shares :                
     
44
       437     Parent company's shareholders     45       443  
     
(959
 )      (57 )   Share buy back     (2,550 )     (465 )
     
16
       8     Minority shareholders     23       18  
     
—
       —     Subsidiaries' redeemable preferred shares     —       —  
 
           Cash dividends paid :                
     
(2,571
 )      (2,514 )   - Parent company's shareholders     (2,571 )     (2,514 )
     
(96
 )      (81 )   - Minority shareholders     (108 )     (84 )
     
417
       245     Net issuance/(repayment) of long-term debt     1,409       1,084  
     
(1,938
 )      (4,222 )   Increase/(Decrease) in short-term borrowings and bank overdrafts     3,507       (395 )
     
(1
 )      (3 )   Other changes, net     (3 )     (5 )
     
(5,088
 )      (6,187 )   CASH FLOW FROM FINANCING ACTIVITIES     (248 )     (1,918 )
     
(3,479
 )      (5,291 )   Net increase/decrease in cash and cash equivalents     4,701       (49 )
     
(106
 )      263     Effect of exchange rates and changes in reporting entity on cash & cash equivalents     (135 )     338  
     
13,117
       8,891     Cash and cash equivalents at the beginning of the year or period     4,966       3,574  
     
9,532
       3,863     CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD     9,532       3,863  
(1)   including payments relating to the Toulouse AZF plant explosion, offset by a long-term liability write-back of 150 millions of euros for the second quarter 2003, 332 millions of euros for the first half 2003.

 

 

BUSINESS SEGMENTS INFORMATION
Total
(unaudited)

In millions of euros

                                                 
2nd quarter 2003   Upstream   Downstream   Chemicals   Corporate   Intercompany   Total
- Non-Group sales
     4,268       15,885       4,190       4       —       24,347  
- Intersegment sales
     2,626       451       98       29       (3,204 )     —  
Total sales
     6,894       16,336       4,288       33       (3,204 )     24,347  
Depreciation, depletion, and amortization of tangible assets
     (777 )     (214 )     (186 )     (2 )             (1,179 )
Operating income
     2,297       456       184       (67 )             2,870  
Amortization of intangible assets and acquisition goodwill
     (5 )     (30 )     (36 )     (4 )             (75 )
Equity in income (loss) of affiliates and other items
     95       93       (202 )     188               174  
Tax on net operating income
     (1,169 )     (113 )     (43 )     51               (1,274 )
Net operating income
     1,218       406       (97 )     168               1,695  
Net cost of net debt
                                             (42 )
Minority interests and dividends on subsidiaries’ redeemable preferred shares
                                             (48 )
Net income
                                             1,605  
                                                 
2nd quarter 2003                                                
(non-recurring items)   Upstream   Downstream   Chemicals   Corporate   Intercompany   Total
- Non-Group sales
                                                
- Intersegment sales
                                                
Total sales
                                                
Depreciation, depletion, and amortization of tangible assets
     —       —       —       —               —  
Operating income
     —       —       —       —               —  
Amortization of intangible assets and acquisition goodwill
                                             —  
Equity in income (loss) of affiliates and other items
                     (213 )     40               (173 )
Tax on net operating income
                     21       (10 )             11  
Net operating income
     —       —       (192 )     30               (162 )
Net cost of net debt
                                             —  
Minority interests and dividends on subsidiaries’ redeemable preferred shares
                                             —  
Net income
                                             (162 )
                                                 
2nd quarter 2003                                                
(excluding non-recurring items)   Upstream   Downstream   Chemicals   Corporate   Intercompany   Total
- Non-Group sales
     4,268       15,885       4,190       4       —       24,347  
- Intersegment sales
     2,626       451       98       29       (3,204 )     —  
Total sales
     6,894       16,336       4,288       33       (3,204 )     24,347  
Depreciation, depletion, and amortization of tangible assets
     (777 )     (214 )     (186 )     (2 )             (1,179 )
Operating income
     2,297       456       184       (67 )             2,870  
Amortization of intangible assets and acquisition goodwill
     (5 )     (30 )     (36 )     (4 )             (75 )
Equity in income (loss) of affiliates and other items
     95       93       11       148               347  
Tax on net operating income
     (1,169 )     (113 )     (64 )     61               (1,285 )
Net operating income
     1,218       406       95       138               1,857  
Net cost of net debt
                                             (42 )
Minority interests and dividends on subsidiaries’ redeemable preferred shares
                                             (48 )
Net income
                                             1,767  
                                                 
2nd quarter 2003   Upstream   Downstream   Chemicals   Corporate   Intercompany   Total
Gross expenditures
     1,130       194       160       24               1,508  
Divestitures at selling price
     44       13       32       68               157  
Cash flow from operating activities (1)
     1,884       1,483       (104 )     (129 )             3,134  
(1)   In the Chemicals segment, this figure amounts to 46 millions of euros excluding an amount of 150 millions of euros paid relating to the Toulouse AZF plant explosion, offset by a long-term liability write-back.

 

 

BUSINESS SEGMENTS INFORMATION
Total
(unaudited)

In millions of euros

                                                 
2nd quarter 2002   Upstream   Downstream   Chemicals   Corporate   Intercompany   Total
- Non-Group sales
     3,888       17,387       5,157       3       —       26,435  
- Intersegment sales
     2,843       368       106       29       (3,346 )     —  
Total sales
     6,731       17,755       5,263       32       (3,346 )     26,435  
Depreciation, depletion, and amortization of tangible assets
     (882 )     (224 )     (206 )     (12 )     —       (1,324 )
Operating income
     2,295       262       242       (40 )     —       2,759  
Amortization of intangible assets and acquisition goodwill
     (6 )     (42 )     (63 )     (6 )             (117 )
Equity in income (loss) of affiliates and other items
     87       47       (135 )     373               372  
Tax on net operating income
     (1,371 )     (60 )     (18 )     4               (1,445 )
Net operating income
     1,005       207       26       331               1,569  
Net cost of net debt
                                             (42 )
Minority interests and dividends on subsidiaries’ redeemable preferred shares
                                             (24 )
Net income
                                             1,503  
                                                 
2nd quarter 2002                                                
(non-recurring items)   Upstream   Downstream   Chemicals   Corporate   Intercompany   Total
- Non-Group sales
     —                                          
- Intersegment sales
                                                
Total sales
                                                
Depreciation, depletion, and amortization of tangible assets
     (21 )                                     (21 )
Operating income
     (30 )     (16 )                             (46 )
Amortization of intangible assets and acquisition goodwill
     —       —       —       —               —  
Equity in income (loss) of affiliates and other items
                     (122 )     173               51  
Tax on net operating income
     (166 )     5       41       (39 )             (159 )
Net operating income
     (196 )     (11 )     (81 )     134               (154 )
Net cost of net debt
                                                
Minority interests and dividends on subsidiaries’ redeemable preferred shares
                                             25  
Net income
                                             (129 )
                                                 
2nd quarter 2002                                                
(excluding non-recurring items)   Upstream   Downstream   Chemicals   Corporate   Intercompany   Total
- Non-Group sales
     3,888       17,387       5,157       3       —       26,435  
- Intersegment sales
     2,843       368       106       29       (3,346 )     —  
Total sales
     6,731       17,755       5,263       32       (3,346 )     26,435  
Depreciation, depletion, and amortization of tangible assets
     (861 )     (224 )     (206 )     (12 )             (1,303 )
Operating income
     2,325       278       242       (40 )             2,805  
Amortization of intangible assets and acquisition goodwill
     (6 )     (42 )     (63 )     (6 )             (117 )
Equity in income (loss) of affiliates and other items
     87       47       (13 )     200               321  
Tax on net operating income
     (1,205 )     (65 )     (59 )     43               (1,286 )
Net operating income
     1,201       218       107       197               1,723  
Net cost of net debt
                                             (42 )
Minority interests and dividends on subsidiaries’ redeemable preferred shares
                                             (49 )
Net income
                                             1,632  
                                                 
2nd quarter 2002   Upstream   Downstream   Chemicals   Corporate   Intercompany   Total
Gross expenditures
     1,556       228       284       32               2,100  
Divestitures at selling price
     106       47       9       301               463  
Cash flow from operating activities
     1,705       805       48       292               2,850  

 

 

BUSINESS SEGMENTS INFORMATION
Total
(unaudited)

In millions of euros

                                                 
1st half 2003   Upstream   Downstream   Chemicals   Corporate   Intercompany   Total
- Non-Group sales
     9,290       34,603       8,743       14               52,650  
- Intersegment sales
     5,790       1,151       249       58       (7,248 )     —  
Total sales
     15,080       35,754       8,992       72       (7,248 )     52,650  
Depreciation, depletion, and amortization of tangible assets
     (1,606 )     (424 )     (366 )     (12 )             (2,408 )
Operating income
     5,322       1,235       299       (122 )             6,734  
Amortization of intangible assets and acquisition goodwill
     (8 )     (48 )     (69 )     (10 )             (135 )
Equity in income (loss) of affiliates and other items
     159       156       (395 )     298               218  
Tax on net operating income
     (2,850 )     (352 )     129       182               (2,891 )
Net operating income
     2,623       991       (36 )     348               3,926  
Net cost of net debt
                                             (85 )
Minority interests and dividends on subsidiaries’ redeemable preferred shares
                                             (116 )
Net income
                                             3,725  
                                                 
1st half 2003                                                
(non-recurring items)   Upstream   Downstream   Chemicals   Corporate   Intercompany   Total
- Non-Group sales
                                                
- Intersegment sales
                                                
Total sales
                                                
Depreciation, depletion, and amortization of tangible assets
     —       —       —       —               —  
Operating income
     —       —       —       —               —  
Amortization of intangible assets and acquisition goodwill
                                             —  
Equity in income (loss) of affiliates and other items
                     (213 )     40               (173 )
Tax on net operating income
                     21       (10 )             11  
Net operating income
     —       —       (192 )     30               (162 )
Net cost of net debt
                                             —  
Minority interests and dividends on subsidiaries’ redeemable preferred shares
                                             —  
Net income
                                             (162 )
                                                 
1st half 2003                                                
(excluding non-recurring items)   Upstream   Downstream   Chemicals   Corporate   Intercompany   Total
- Non-Group sales
     9,290       34,603       8,743       14       —       52,650  
- Intersegment sales
     5,790       1,151       249       58       (7,248 )     —  
Total sales
     15,080       35,754       8,992       72       (7,248 )     52,650  
Depreciation, depletion, and amortization of tangible assets
     (1,606 )     (424 )     (366 )     (12 )             (2,408 )
Operating income
     5,322       1,235       299       (122 )             6,734  
Amortization of intangible assets and acquisition goodwill
     (8 )     (48 )     (69 )     (10 )             (135 )
Equity in income (loss) of affiliates and other items
     159       156       (182 )     258               391  
Tax on net operating income
     (2,850 )     (352 )     108       192               (2,902 )
Net operating income
     2,623       991       156       318               4,088  
Net cost of net debt
                                             (85 )
Minority interests and dividends on subsidiaries’ redeemable preferred shares
                                             (116 )
Net income
                                             3,887  
                                                 
1st half 2003   Upstream   Downstream   Chemicals   Corporate   Intercompany   Total
Gross expenditures
     2,296       319       335       52               3,002  
Divestitures at selling price
     224       57       787       82               1,150  
Cash flow from operating activities (1)
     4,455       3,043       (185 )     (357 )             6,956  
(1)   In the Chemicals segment, this figure amounts to 147 millions of euros excluding an amount of 332 millions of euros paid relating to the Toulouse AZF plant explosion, offset by a long-term liability write-back.

 

 

BUSINESS SEGMENTS INFORMATION
Total
(unaudited)

In millions of euros

                                                 
1st half 2002   Upstream   Downstream   Chemicals   Corporate   Intercompany   Total
- Non-Group sales
     8,017       32,290       9,905       7       —       50,219  
- Intersegment sales
     5,463       733       181       53       (6,430 )     —  
Total sales
     13,480       33,023       10,086       60       (6,430 )     50,219  
Depreciation, depletion, and amortization of tangible assets
     (1,732 )     (453 )     (413 )     (22 )             (2,620 )
Operating income
     4,311       557       363       (106 )             5,125  
Amortization of intangible assets and acquisition goodwill
     (11 )     (64 )     (103 )     (7 )             (185 )
Equity in income (loss) of affiliates and other items
     228       120       (341 )     664               671  
Tax on net operating income
     (2,457 )     (156 )     14       76               (2,523 )
Net operating income
     2,071       457       (67 )     627               3,088  
Net cost of net debt
                                             (82 )
Minority interests and dividends on subsidiaries’ redeemable preferred shares
                                             (74 )
Net income
                                             2,932  
                                                 
1st half 2002                                                
(non-recurring items)   Upstream   Downstream   Chemicals   Corporate   Intercompany   Total
- Non-Group sales
                                                
- Intersegment sales
                                                
Total sales
                                                
Depreciation, depletion, and amortization of tangible assets
     (21 )                                     (21 )
Operating income
     (30 )     (16 )                             (46 )
Amortization of intangible assets and acquisition goodwill
                                                
Equity in income (loss) of affiliates and other items
                     (321 )     355               34  
Tax on net operating income
     (166 )     5       107       (78 )             (132 )
Net operating income
     (196 )     (11 )     (214 )     277               (144 )
Net cost of net debt
                                                
Minority interests and dividends on subsidiaries’ redeemable preferred shares
                                             25  
Net income
                                             (119 )
                                                 
1st half 2002                                                
(excluding non-recurring items)   Upstream   Downstream   Chemicals   Corporate   Intercompany   Total
- Non-Group sales
     8,017       32,290       9,905       7       —       50,219  
- Intersegment sales
     5,463       733       181       53       (6,430 )     —  
Total sales
     13,480       33,023       10,086       60       (6,430 )     50,219  
Depreciation, depletion, and amortization of tangible assets
     (1,711 )     (453 )     (413 )     (22 )             (2,599 )
Operating income
     4,341       573       363       (106 )             5,171  
Amortization of intangible assets and acquisition goodwill
     (11 )     (64 )     (103 )     (7 )             (185 )
Equity in income (loss) of affiliates and other items
     228       120       (20 )     309               637  
Tax on net operating income
     (2,291 )     (161 )     (93 )     154               (2,391 )
Net operating income
     2,267       468       147       350               3,232  
Net cost of net debt
                                             (82 )
Minority interests and dividends on subsidiaries’ redeemable preferred shares
                                             (99 )
Net income
                                             3,051  
                                                 
1st half 2002   Upstream   Downstream   Chemicals   Corporate   Intercompany   Total
Gross expenditures
     3,199       360       540       110               4,209  
Divestitures at selling price
     329       82       41       597               1,049  
Cash flow from operating activities
     3,397       1,386       38       487               5,308  

 

 

TOTAL

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR

THE FIRST HALF OF 2003

I.   ACCOUNTING POLICIES

The consolidated financial statements of Total and its subsidiaries (together, the Company or Group) have been prepared in accordance with generally accepted accounting principles in France (French “GAAP”) and comply with the principles and methodology relative to consolidated financial statements, Regulation No. 99-02 approved by the decree dated June 22, 1999 of the French Accounting Regulation Committee.

Besides, the Company applies the standards issued by the Financial Accounting Standard Board which are compatible with the French Regulations and which enable, in their current wording, to ensure a true and fair view of the assets and liabilities of the Company and the best comparability with the other oil majors, namely those from North America.

The exceptions to the use of FAS standards are presented in the Annual Report of the Company, and in the Annual Report under US Generally Accepted Accounting Principles (Form 20F) and relate principally to the use of purchase accounting with respect to the business combinations between Total, PetroFina and Elf.

The Company has adopted the Statement of Financial Accounting Standards No. 143 modifying the rules for accounting for asset retirement obligations. FASB No. 143 requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred, at its discounted value, and no longer at its present value. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived assets and depreciated over the life of the associated asset. The cumulative effect of the change in accounting principle, which is accounted for in the Group’s shareholders’ equity, has no material effect.

With the exception of the first application of FASB No. 143, the accounting policies applied for the consolidated financial statements as of June 30, 2003 are the same as those used for the Financial Statements as of December 31, 2002.

II.   CHANGES IN THE GROUP STRUCTURE

During the first half of 2003, the Company has finalized the sale of its Paints Business, run by Sigma Kalon. The effect of this divestment, accounted for during the first half of 2003, is not material on the Group’s net income.

With the exception of the disposal of the Paints Business, the Group has not significantly modified its structure.

1

 

III.   NON-RECURRING ITEMS

NON-RECURRING ITEMS OF OPERATING INCOME

                                                 
(in millions of euros)           Upstream   Downstream   Chemicals   Corporate   Total
First half 2003
   Restructuring charges     —       —       —       —       —  
 
   Asset impairment     —       —       —       —       —  
 
   Early retirement plan     —       —       —       —       —  
 
   Other items     —       —       —       —       —  
 
   Gain on assets' sales     —       —       —       —       —  
Total
             —       —       —       —       —  
First half 2002
   Restructuring charges     —       (16 )     —       —       (16 )
 
   Asset impairment     (21 )     —       —       —       (21 )
 
   Early retirement plan     —       —       —       —       —  
 
   Other items     (9 )     —       —       —       (9 )
 
   Gain on assets' sales     —       —       —       —       —  
Total
             (30 )     (16 )     —       —       (46 )

NON-RECURRING ITEMS OF NET INCOME

                                                 
(in millions of euros)           Upstream   Downstream   Chemicals   Corporate   Total
First half 2003
   Restructuring charges     —       —       (34 )     —       (34 )
 
   Asset impairment     —       —       —       —       —  
 
   Early retirement plan     —       —       —       —       —  
 
   Other items     —       —       (158 )     —       (158 )
 
   Gain on assets' sales     —       —       —       30       30  
 
   AZF plant explosion - Toulouse     —       —       —       —       —  
Total
             —       —       (192 )     30       (162 )
First half 2002
   Restructuring charges     —       (11 )     (65 )     —       (76 )
 
   Asset impairment     (14 )     —       —       —       (14 )
 
   Early retirement plan     —       —       —       —       —  
 
   Other items     (157 )     —       —       —       (157 )
 
   Gain on assets' sales     —       —       —       277       277  
 
   AZF plant explosion - Toulouse     —       —       (149 )     —       (149 )
Total
             (171 )     (11 )     (214 )     277       (119 )

The non-recurring items that had a positive impact in the first half 2003 include gains on the sale of Sanofi-Synthélabo shares, while the negative impacts include, in the Chemicals segment, a restructuring charge and a 155 M€ provision related to investigations of anti-trust practices by the European Commission.

In the first half of 2003, the European Commission commenced 11 new investigations into alleged anticompetitive practices involving certain products sold by Atofina or its subsidiaries. The Commission also issued in 2003 a statement of objections in respect of a product covered by an earlier investigation. Atofina is cooperating with the Commission and has implemented a compliance program since the beginning of 2001.

The Group has increased the provision of 45 M€ existing in its accounts at December 31,2002 to 200 M€ at June 30, 2003. Because of the Commission’s discretionary powers, the financial effect of these investigations could differ from the amount of the provision. The Company is, however, of the opinion that the ultimate outcome of such antitrust proceedings should not have a material adverse impact on its financial position, cash flows or earnings.

2

 

In the first half of 2002, the non-recurring items that had a positive impact were composed of gains on sales of financial participations. Those that were negative included primarily the deferred tax impact of the change in UK tax laws for exploration and production activities, restructuring charges in the Downstream and Chemicals segments and an increase in the provision related to the explosion at the Toulouse fertilizer plant.

IV.   SHAREHOLDERS’ EQUITY

Shares held by the parent company, TOTAL S.A.

As of June 30, 2003, TOTAL S.A. held 41,537,375 of its own shares, representing 6.04% of its share capital, detailed as follows:

  –   10,472,375 shares allocated to covering share purchase option plans for Company employees; these shares are recorded as short-term investments and maintained within the total assets,
 
  –   31,065,000 shares, of which 10,450,000 shares were purchased in the last quarter 2002, and 20,615,000 during the first half of 2003, pursuant to the authorization granted by the Ordinaries and Extraordinaries Shareholders’ Meetings held on May 7, 2002 and on May 6, 2003, and that are deducted from the consolidated shareholders’ equity.

Shares held by the subsidiaries

As of June 30, 2003, TOTAL S.A. held indirectly, through its subsidiaries 25,082,817 of its own shares, representing 3.64% of its share capital and unchanged since December 31, 2002, detailed as follows:

  –   505,918 shares held by a consolidated subsidiary, Total Nucléaire, indirectly controlled by TOTAL S.A. These shares were initially acquired in order to realize short-term cash investments and are recorded in short-term investments in the consolidated financial statements;
 
  –   24,576,899 shares held by subsidiaries of Elf Aquitaine, Financière Valorgest, Sogapar and Fingestval. These shares were deducted from the consolidated shareholders’ equity.

3

 

Consolidated statements of changes in shareholders’ equity

                                                         
                    Paid-in                                
    Common shares issued   surplus and   Cumulative   Treasury shares        
   
  retained   translation  
  Shareholders’
(in millions of euros)   Number   Amount   earnings   adjustments   Number   Amount   equity
As of December 31, 2001
     705,934,959       7,059       30,544       1,252       (37,349,899 )     (4,923 )     33,932  
Cash dividend
     —       —       (2,514 )     —       —       —       (2,514 )
Net income of the first half of 2002
     —       —       2,932       —       —       —       2,932  
Elf and Petrofina transactions
     377,720       2       16       —       —       —       18  
Other issuance of common shares
     3,847,881       40       403       —       —       —       443  
Purchase of treasury shares
     —       —       —       —       (2,955,245 )     (465 )     (465 )
Cancellation of repurchased shares
     —       —       —       —       —       —       —  
Translation adjustments
     —       —       —       (1,584 )     —       —       (1,584 )
Other changes, net
     —       —       1       —       —       —       1  
As of June 30, 2002
     710,160,560       7,101       31,382       (332 )     (40,305,144 )     (5,388 )     32,763  
Cash dividend
     —       —       —       —       —       —       —  
Net income from July 1st to December 31st
     —       —       3,009       —       —       —       3,009  
Elf and Petrofina transactions
     186,751       4       5       —       —       —       9  
Other issuance of common shares
     286,444       1       17       —       —       —       18  
Purchase of treasury shares
     —       —       —       —       (18,165,000 )     (2,480 )     (2,480 )
Cancellation of repurchased shares
     (23,443,245 )     (234 )     (3,224 )     —       23,443,245       3,458       —  
Translation adjustments
     —       —       —       (498 )     —       —       (498 )
Other changes, net
     —       —       (675 )     —       —       —       (675 )
As of December 31, 2002
     687,190,510       6,872       30,514       (830 )     (35,026,899 )     (4,410 )     32,146  
Cash dividend
     —       —       (2,571 )     —       —       —       (2,571 )
Net income of the first half of 2003
     —       —       3,725       —       —       —       3,725  
Elf transactions
     449,312       4       19       —       —       —       23  
Other issuance of common shares
     528,528       5       40       —       —       —       45  
Purchase of treasury shares
     —       —       —       —       (20,615,000 )     (2,550 )     (2,550 )
Cancellation of repurchased shares
     —       —       —       —       —       —       —  
Translation adjustments
     —       —       —       (1,116 )     —       —       (1,116 )
Other changes, net (1)
     —       —       49       —       —       —       49  
As of June 30, 2003
     688,168,350       6,881       31,776       (1,946 )     (55,641,899 )     (6,960 )     29,751  
(1)   The change in the category “Other” is primarily due to the effect of the first application of the standard SFAS No. 143.
 
V.   SUBSIDIARIES’ REDEEMABLE PREFERRED SHARES

There were no operations on these preferred shares during the first half of 2003.

4

 

VI.   LONG-TERM DEBT

The Group has issued debenture loans through its subsidiary TotalFinaElf Capital during the first half of 2003 :

  –   Debenture 5% 2003-2007 (50 million GB Pounds)
 
  –   Debenture 5% 2003-2008 (100 million AUD)
 
  –   Debenture 3,5% 2003-2008 (500 million EUR)
 
  –   Debenture 4,25% 2003-2008 (100 million CAD)
 
  –   Debenture 3,25% 2003-2008 (250 million USD)
 
  –   Debenture 4,5% 2003-2013 (30 million USD)
 
  –   Debenture 5% 2003-2008 (100 million AUD)
 
  –   Debenture 3,5% 2003-2008 (100 million EUR)
 
  –   Debenture 3,5% 2003-2008 (150 million EUR)
 
  –   Debenture 2% 2003-2008 (300 million CHF)

The Group has reimbursed two debenture loans during the first half of 2003 :

–   Debenture 2,25% 1998-2003 (200 million CHF)
 
–   Debenture 2,25% 1998-2003 (150 million CHF)

In the context of its active cash management, the Group may increase temporarily its short-term borrowings, particularly in the form of commercial paper. The short-term borrowings and the cash and cash equivalents resulting from this cash management in the quarterly financial statements are not necessarily representative of a steady position.

5

 

INFORMATION BY BUSINESS SEGMENT

In millions of euros

                                                 
1st half 2003   Upstream   Downstream   Chemicals   Corporate   Intercompany   Total
- Non-Group sales
     9,290       34,603       8,743       14               52,650  
- Intersegment sales
     5,790       1,151       249       58       (7,248 )     —  
Total sales
     15,080       35,754       8,992       72       (7,248 )     52,650  
Depreciation, depletion, and amortization of tangible assets
     (1,606 )     (424 )     (366 )     (12 )             (2,408 )
Operating income
     5,322       1,235       299       (122 )             6,734  
Amortization of intangible assets and acquisition goodwill
     (8 )     (48 )     (69 )     (10 )             (135 )
Equity in income (loss) of affiliates and other items
     159       156       (395 )     298               218  
Tax on net operating income
     (2,850 )     (352 )     129       182               (2,891 )
Net operating income
     2,623       991       (36 )     348               3,926  
Net cost of net debt
                                             (85 )
Minority interests and dividends on subsidiaries’ redeemable preferred shares
                                             (116 )
Net income
                                             3,725  
                                                 
1st half 2003                                                
(non-recurring items)   Upstream   Downstream   Chemicals   Corporate   Intercompany   Total
- Non-Group sales
                                                
- Intersegment sales
                                                
Total sales
                                                
Depreciation, depletion, and amortization of tangible assets
     —       —       —       —               —  
Operating income
     —       —       —       —               -  
Amortization of intangible assets and acquisition goodwill
                                             —  
Equity in income (loss) of affiliates and other items
                     (213 )     40               (173 )
Tax on net operating income
                     21       (10 )             11  
Net operating income
     —       —       (192 )     30               (162 )
Net cost of net debt
                                             —  
Minority interests and dividends on subsidiaries’ redeemable preferred shares
                                             —  
Net income
                                             (162 )
                                                 
1st half 2003                                                
(excluding non-recurring items)   Upstream   Downstream   Chemicals   Corporate   Intercompany   Total
- Non-Group sales
     9,290       34,603       8,743       14       —       52,650  
- Intersegment sales
     5,790       1,151       249       58       (7,248 )     —  
Total sales
     15,080       35,754       8,992       72       (7,248 )     52,650  
Depreciation, depletion, and amortization of tangible assets
     (1,606 )     (424 )     (366 )     (12 )             (2,408 )
Operating income
     5,322       1,235       299       (122 )             6,734  
Amortization of intangible assets and acquisition goodwill
     (8 )     (48 )     (69 )     (10 )             (135 )
Equity in income (loss) of affiliates and other items
     159       156       (182 )     258               391  
Tax on net operating income
     (2,850 )     (352 )     108       192               (2,902 )
Net operating income
     2,623       991       156       318               4,088  
Net cost of net debt
                                             (85 )
Minority interests and dividends on subsidiaries’ redeemable preferred shares
                                             (116 )
Net income
                                             3,887  
                                                 
1st half 2003   Upstream   Downstream   Chemicals   Corporate   Intercompany   Total
Gross expenditures
     2,296       319       335       52               3,002  
Divestitures at selling price
     224       57       787       82               1,150  
Cash flow from operating activities (1)
     4,455       3,043       (185 )     (357 )             6,956  
(1)   In the Chemicals segment, this figure amounts to 147 millions of euros excluding an amount of 332 millions of euros paid relating to the Toulouse AZF plant explosion, offset by a long-term liability write-back.

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In millions of euros

                                                 
1st half 2002   Upstream   Downstream   Chemicals   Corporate   Intercompany   Total
- Non-Group sales
     8,017       32,290       9,905       7       —       50,219  
- Intersegment sales
     5,463       733       181       53       (6,430 )     —  
Total sales
     13,480       33,023       10,086       60       (6,430 )     50,219  
Depreciation, depletion, and amortization of tangible assets
     (1,732 )     (453 )     (413 )     (22 )             (2,620 )
Operating income
     4,311       557       363       (106 )             5,125  
Amortization of intangible assets and acquisition goodwill
     (11 )     (64 )     (103 )     (7 )             (185 )
Equity in income (loss) of affiliates and other items
     228       120       (341 )     664               671  
Tax on net operating income
     (2,457 )     (156 )     14       76               (2,523 )
Net operating income
     2,071       457       (67 )     627               3,088  
Net cost of net debt
                                             (82 )
Minority interests and dividends on subsidiaries’ redeemable preferred shares
                                             (74 )
Net income
                                             2,932  
                                                 
1st half 2002                                                
(non-recurring items)   Upstream   Downstream   Chemicals   Corporate   Intercompany   Total
- Non-Group sales
                                                
- Intersegment sales
                                                
Total sales
                                                
Depreciation, depletion, and amortization of tangible assets
     (21 )                                     (21 )
Operating income
     (30 )     (16 )                             (46 )
Amortization of intangible assets and acquisition goodwill
                                                
Equity in income (loss) of affiliates and other items
                     (321 )     355               34  
Tax on net operating income
     (166 )     5       107       (78 )             (132 )
Net operating income
     (196 )     (11 )     (214 )     277               (144 )
Net cost of net debt Minority interests and dividends on subsidiaries’ redeemable preferred shares
                                             25  
Net income
                                             (119 )
                                                 
1st half 2002                                                
(excluding non-recurring items)   Upstream   Downstream   Chemicals   Corporate   Intercompany   Total
- Non-Group sales
     8,017       32,290       9,905       7       —       50,219  
- Intersegment sales
     5,463       733       181       53       (6,430 )     —  
Total sales
     13,480       33,023       10,086       60       (6,430 )     50,219  
Depreciation, depletion, and amortization of tangible assets
     (1,711 )     (453 )     (413 )     (22 )             (2,599 )
Operating income
     4,341       573       363       (106 )             5,171  
Amortization of intangible assets and acquisition goodwill
     (11 )     (64 )     (103 )     (7 )             (185 )
Equity in income (loss) of affiliates and other items
     228       120       (20 )     309               637  
Tax on net operating income
     (2,291 )     (161 )     (93 )     154               (2,391 )
Net operating income
     2,267       468       147       350               3,232  
Net cost of net debt
                                             (82 )
Minority interests and dividends on subsidiaries’ redeemable preferred shares
                                             (99 )
Net income
                                             3,051  
                                                 
1st half 2002   Upstream   Downstream   Chemicals   Corporate   Intercompany   Total
Gross expenditures
     3,199       360       540       110               4,209  
Divestitures at selling price
     329       82       41       597               1,049  
Cash flow from operating activities
     3,397       1,386       38       487               5,308  

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