Exhibit 99.7

 
 
CONSOLIDATED FINANCIAL STATEMENTS OF
TOTAL
(unaudited)
 
JUNE 30, 2003
 
 
(including reconciliation to U.S. GAAP)

 

TOTAL

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2003
(Amounts in tables in millions of euros, M€ except per share amount, or where otherwise indicated)

I. ACCOUNTING POLICIES

The unaudited consolidated financial statements of Total and its subsidiaries (together the “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 Regulations Committee.

In its primary financial statements, the Group applies the standards issued by the Financial Accounting Standards Board when they are compliant with French regulations. The exceptions to the use of FASB standards in the Group’s primary financial statements involve APB No. 16 (Business Combinations) for the acquisitions of Petrofina and Elf, FAS No. 115 (Accounting for Certain Investments in Debt and Equity Securities), FAS No. 123 (Accounting for Stock-Based Compensation), APB No. 6 (Treasury Stock), FAS No. 133, 137, & 138 (Hedging and Derivatives), FAS No. 141 (Business Combination) and FAS No. 142 (Goodwill and Other Intangible Assets). Applying these standards would not have a significant impact on the Group’s primary financial statements, except for APB No. 16 and FAS No. 142, regarding the use of purchase accounting with respect to the business combinations between Total, PetroFina, and Elf. The effects of applying all required FASB standards to the Group’s financial statements are reflected in Note VIII below.

Effective January 1, 2003, the Group has adopted FAS No. 143 which modifies the rules for accounting for asset retirement obligations. FAS 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 nominal 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 under French GAAP, has no material effect.

With the exception of the adoption of FAS 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 presented 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.

2

TOTAL

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2003
(Amounts in tables in millions of euros, M€ except per share amount, or where otherwise indicated)

III. NON-RECURRING ITEMS

     (i)  Non recurring items of operating income

	For the semester ended June 30, 2003
	Upstream		Downstream		Chemicals		Corporate		Total
Restructuring charges		—		—		—		—		—
Assets impairments (FAS 144)		—		—		—		—		—
Early retirement plan		—		—		—		—		—
Other		—		—		—		—		—
Gain on sale of assets		—		—		—		—		—
Total		—		—		—		—		—

	For the semester ended June 30, 2002
	Upstream			Downstream			Chemicals		Corporate		Total
Restructuring charges		—			(16	)		—		—		(16	)
Assets impairments (FAS 144)		(21	)		—			—		—		(21	)
Early retirement plan		—			—			—		—		—
Other		(9	)		—			—		—		(9	)
Gain on sale of assets		—			—			—		—		—
Total		(30	)		(16	)		—		—		(46	)

     (ii)  Non recurring items of net income

	For the semester ended June 30, 2003
	Upstream		Downstream		Chemicals			Corporate		Total
Restructuring charges		—		—		(34	)		—		(34	)
Assets impairments (FAS 144)		—		—		—			—		—
Early retirement plan		—		—		—			—		—
Other		—		—		(158	)		—		(158	)
Gain on sale of assets		—		—		—			30		30
		—		—		—			—		—
Total		—		—		(192	)		30		(162	)

	For the semester ended June 30, 2002
	Upstream			Downstream			Chemicals			Corporate		Total
Restructuring charges		—			(11	)		(65	)		—		(76	)
Assets impairments (FAS 144)		(14	)		—			—			—		(14	)
Early retirement plan		—			—			—			—		—
Other		(157	)		—			—			—		(157	)
Gain on sale of assets		—			—			—			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.

3

TOTAL

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2003
(Amounts in tables in millions of euros, M€ except per share amount, or where otherwise

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.

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 :

- 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.

4

TOTAL

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2003
(Amounts in tables in millions of euros, M€ except per share amount, or where otherwise

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

							Paid in-
	Common shares issued						surplus and			Cumulative			Treasury shares
							Retained			Translation									Shareholders’
	Number			Amount			Earnings			Adjustments			Number			Amount			Equity
				Amounts in millions of euros except for share data
As of December 31, 2001 (audited)		705,934,959			7,059			30,544			1,252			(37,349,899	)		(4,923	)		33,932
Cash dividend		—			—			(2,514	)		—			—			—			(2,514	)
Net income 1st half 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 adjustment		—			—			—			(1,584	)		—			—			(1,584	)
Other changes, net		—			—			1			—			—			—			1
As of June 30, 2002 (unaudited)		710,160,560			7,101			31,382			(332	)		(40,305,144	)		(5,388	)		32,763
Net income 2nd half 2002		—			—			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 adjustment		—			—			—			(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- 1st semester		—			—			3,725			—			—			—			3,725
Elf Aquitaine 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 (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) Mainly due to the effect of the first application of FAS No. 143.

V. SUBSIDIARIES’ REDEEMABLE PREFERRED SHARES

There were no movements of these preferred shares during the first semester of 2003.

VI. LONG-TERM DEBT

The Group has issued debenture loans through its subsidiary Total 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 repaid two debenture loans during the first half of 2003 :

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

5

TOTAL

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2003
(Amounts in tables in millions of euros, M€ except per share amount, or where otherwise

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

In the context of its active cash management, the Group may temporarily increase 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.

VII. INFORMATION BY BUSINESS SEGMENT

		For the semester ended June 30, 2003
		Upstream			Downstream			Chemicals			Corporate			Intercompany			Total
Statement of income:
	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

				For the semester ended June 30, 2003
		(non-recurring items)
		Upstream		Downstream		Chemicals			Corporate			Intercompany		Total
Statement of income:
	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	)

6

TOTAL

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2003
(Amounts in tables in millions of euros, M€ except per share amount, or where otherwise

		For the semester ended June 30, 2003
		(excluding non-recurring items)
		Upstream			Downstream			Chemicals			Corporate			Intercompany			Total
Statement of income:
	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

	For the semester ended June 30, 2003
	Upstream		Downstream		Chemicals			Corporate			Intercompany		Total
Gross expenditures		2,296		319		335			52			—		3,002
Divestitures at sale price		224		57		787			82			—		1,150
Cash flow from operating activities		4,455		3,043		(185	)		(357	)		—		6,956

		For the semester ended June 30, 2002
		Upstream			Downstream			Chemicals			Corporate			Intercompany			Total
Statement of income:
	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

7

TOTAL

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2003
(Amounts in tables in millions of euros, M€ except per share amount, or where otherwise

		For the semester ended June 30, 2002
			(non-recurring items)
		Upstream			Downstream			Chemicals			Corporate			Intercompany		Total
Statement of income:
	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	)

		For the semester ended June 30, 2002
		(excluding non recurring-items)
		Upstream			Downstream			Chemicals			Corporate			Intercompany			Total
Statement of income:
	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

	For the semester ended June 30, 2002
	Upstream		Downstream		Chemicals		Corporate		Intercompany		Total
Gross expenditures		3,199		360		540		110		—		4,209
Divestitures at sale price		329		82		41		597		—		1,049
Cash flow from operating activities		3,397		1,386		38		487		—		5,308

8

TOTAL

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2003
(Amounts in tables in millions of euros, M€ except per share amount, or where otherwise

VIII. CONVERSION TO U.S. GAAP

In the opinion of management, the unaudited Interim Condensed Consolidated Financial Statements of the Group include all adjustments necessary to present the Group net income for the six months ended June 30, 2003, and June 30, 2002, as well as the shareholders equity for the periods ended June 30, 2003, and December 31, 2002, which would be required if US GAAP had been applied instead of French GAAP. Due to the seasonality of Group’s operations, the results of its operations for the interim period ended June 30, 2003 and 2002, may not be indicative of total results for the full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with US generally accepted accounting principles have been condensed or omitted. The unaudited Interim Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements of TotalFinaElf and accompanying notes for the years ended December 31, 2002 and 2001.

Net Income and Shareholders’ Equity

The following is a summary of the adjustments to net income for the six months ended June 30, 2003, and June 30, 2002, as well as the shareholders equity for the periods ended June 30, 2003, and December 31, 2002, which would be required if US GAAP had been applied instead of French GAAP.

These US GAAP adjustments are presented net of the portion applicable to minority interest.

For a further description of the nature of adjustments listed below, please refer to Note 3 of the Consolidated Financial Statements in the 20F of TotalFinaElf for December 31, 2002.

9

TOTAL

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2003
(Amounts in tables in millions of euros, M€ except per share amount, or where otherwise

		Net income
		For the semester ended June 30,
		2003			2002
Amounts per accompanying consolidated financial statements			3,725			2,932
US GAAP adjustments
Increase (decrease) due to:
	Equity investees revaluations		(40	)		(7	)
	Goodwill on consolidated companies		(188	)		(89	)
	Property, plant and equipment reevaluation		(201	)		(195	)
	Other purchase accounting adjustments		(154	)		(7	)
	Total Acquisition of Elf and Petrofina		(583	)		(298	)
	Business combinations: cancellation of goodwill amortization		63			119
	Reserve for crude oil price changes		(372	)		534
	Equity securities		—			(238	)
	Stock compensation		(1	)		(87	)
	Derivative instruments and hedging activities		(108	)		287
	Costs associated with asset retirement obligation		90			—
	Tax effect of U.S. GAAP adjustments		238			(158	)
Amounts under U.S. GAAP			3,052			3,091
Basic Earnings per Share			4.85			4.70
Diluted Earnings per Share			4.83			4.66

		Shareholders’ equity
		As of
		June 30, 2003			December 31, 2002
Amounts per accompanying consolidated financial statements			29,751			32,146
US GAAP adjustments
Increase (decrease) due to:
	Equity investees revaluations		3,160			3,200
	Goodwill on consolidated companies		30,766			30,954
	Property, plant and equipment reevaluation		4,218			4,439
	Other purchase accounting adjustments		—			224
	Total Acquisition of Elf and Petrofina		38,144			38,817
	Business combinations: cancellation of goodwill amortization		342			279
	Reserve for crude oil price changes		1,455			1,827
	Treasury shares		(1,398	)		(1,407	)
	Equity securities		108			52
	Derivative instruments and hedging activities		502			610
	Tax effect of U.S. GAAP adjustments		(2,850	)		(3,212	)
	Cumulative translation adjustment of U.S. GAAP adjustments		(27	)		(16	)
Amounts under U.S. GAAP			66,027			69,096

10

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 overdafts		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
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
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 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

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDER’S EQUITY
Total

	Common shares issued									Cumulative			Treasury shares
							Paid-in surplus and			translation
(in millions of euros)	Number			Amount			retained earnings			adjustments			Number			Amount			Shareholders’ 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 ofJune 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.