EX-99.4 5 y01401exv99w4.htm EX-99.4: 1ST QUARTER 2006 RESULTS EX-99.4
 

     
(TOTAL LOGO)   (NEWS RELEASE LOGO)
     
Exhibit 99.4    

2, place de la Coupole
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92 400 Courbevoie France
Fax : 33 (1) 47 44 68 21
Catherine ENCK
Tel. 33 (1) 47 44 37 76
Patricia MARIE
Tel. 33 (1) 47 44 45 90
Paul FLOREN
Tel. : 33 (1) 47 44 45 91
Christine de CHAMPEAUX
Tel : 33 (1) 47 44 47 49
Bertille ARON
Tel. : 33 (1) 47 44 67 12
Mary DWYER
Tel.: 33 (1) 47 44 21 19
Isabelle CABROL
Tel. : 33 (1) 47 44 64 24
Charles-Edouard ANFRAY
Tel. : 33 (1) 47 44 65 55
Franklin BOITIER
Tel. : 33 (1) 47 44 59 81
Philippe GATEAU
Tel. : 33 (1) 47 44 47 05
TOTAL S.A.
Capital 6 179 016 260 euros
542 051 180 R.C.S. Nanterre
www.total.com







Total reports first quarter 2006 results
New steps toward long-term growth
Main results

         
• Adjusted net income1-2
  3.38 billion euros   +16%
 
   4.06 billion dollars3   + 6%
 
   5.78 euros per share   +18%
 
   6.95 dollars per share   + 8%
• Increased investments
   3.31 billion dollars   +41%
Recent highlights

•   Ongoing exploration success
  •   Positive results in Angola, Yemen, Libya, Congo, Algeria and US Gulf of Mexico
 
  •   New acreage in Norway, Australia, Cameroon, Bangladesh and Canada
•   Agreement to enter into the Sulige field in China and the Tahiti field in the US Gulf of Mexico
•   Launching development of Tyrihans in Norway
•   Production start-ups at Glenelg (United Kingdom) and Belize (Angola)
•   Preparation of the Arkema spin-off on May 18
•   Satisfactory outcome to Cepsa arbitration
•   Proposed 2005 dividend of 6.48 euros per share and four-for-one stock split submitted for approval at the May 12 Annual Meeting
 
1   adjusted net income = net income using replacement cost (Group share) adjusted for special items and excluding Total’s share of amortization of intangibles related to the Sanofi-Aventis merger
 
2   percent changes are relative to the first quarter 2005
 
3   dollar amounts represent euro amounts converted at the average €/$ exchange rate for the period (1.2023 $/€ in the first quarter 2006, 1.3113 $/€ in the first quarter 2005 and 1.1884 $/€ in the fourth quarter 2005)


 

 

 
 

2, place de la Coupole
La Défense 6
92 400 Courbevoie France
Fax : 33 (1) 47 44 68 21
Catherine ENCK
Tel. 33 (1) 47 44 37 76
Patricia MARIE
Tel. 33 (1) 47 44 45 90
Paul FLOREN
Tel. : 33 (1) 47 44 45 91
Christine de CHAMPEAUX
Tel : 33 (1) 47 44 47 49
Bertille ARON
Tel. : 33 (1) 47 44 67 12
Mary DWYER
Tel.: 33 (1) 47 44 21 19
Isabelle CABROL
Tel. : 33 (1) 47 44 64 24
Charles-Edouard ANFRAY
Tel. : 33 (1) 47 44 65 55
Franklin BOITIER
Tel. : 33 (1) 47 44 59 81
Philippe GATEAU
Tel. : 33 (1) 47 44 47 05
TOTAL S.A.
Capital 6 179 016 260 euros
542 051 180 R.C.S. Nanterre
www.total.com
Paris, May 4, 2006 -— The Board of Directors of Total, chaired by CEO Thierry Desmarest, met on May 3, 2006 to review the first quarter 2006 results. Commenting on the results, Thierry Desmarest said:
« In the first quarter 2006, demand for oil continued to be strong while supplies were subject to serious disruptions, notably in Nigeria. In this context, oil prices continued to rise, while refining margins retreated from their 2005 average. The environment for Chemicals was more mixed, with higher raw material costs putting pressure on petrochemicals.
Adjusted net income increased by 16% to 3,376 million euros from 2,919 million euros in the first quarter 2005. Adjusted fully-diluted earnings per share rose to 5.78 euros, an increase of 18%. The Group’s profitability over the past four quarters rose to 28%, at the level of the best in the industry, thanks notably to strict control of technical costs, which are the lowest among the major oils.
Total is continuing to implement its strategy of long-term growth, mainly through an active investment program, which in dollar terms increased by 41% compared to the first quarter 2005. Since the beginning of the year, we made significant progress, notably through ongoing exploration success and the agreement to enter into the Sulige field in China.»
• Key figures from the consolidated accounts of Total4
                                 
in millions of euros,                           1Q06 vs
except earnings per share and number of shares   1Q06   4Q05   1Q05   1Q05
 
Sales
     39,605       39,942       31,739       +25 %
 
Adjusted operating income from business segments
     6,767       6,330       5,456       +24 %
 
Adjusted net operating income from business segments
     3,269       3,095       2,877       +14 %
• Upstream
     2,400       2,132       1,808       +33 %
• Downstream
     650       799       678       -4 %
• Chemicals
     219       164       391       -44 %
 
Adjusted net income
     3,376       3,052       2,919       +16 %
 
Adjusted fully-diluted earnings per share (euros)
     5.78       5.20       4.90       +18 %
 
Fully-diluted weighted-average shares (millions)
     584.0       586.5       596.1       -2 %
 
Net income (Group share)
     3,683       2,341       3,208       +15 %
 
Investments
     2,750       3,799       1,784       +54 %
 
Divestments (at selling price)
     397       250       213       +86 %
 
Cash flow from operations
     4,839       3,171       4,037       +20 %
 
Adjusted cash flow from operations
     4,287       4,459       4,247       +1 %
 
4     adjusted income (adjusted operating income, adjusted net operating income, adjusted net income) is defined as income using replacement cost, adjusted for special items and excluding Total’s equity share of amortization of intangibles related to the Sanofi-Aventis merger. Adjusted cash flow from operations is defined as cash flow from operations before changes in working capital at replacement cost). Adjustment items are listed on page 12.


2

 

2, place de la Coupole
La Défense 6
92 400 Courbevoie France
Fax : 33 (1) 47 44 68 21
Catherine ENCK
Tel. 33 (1) 47 44 37 76
Patricia MARIE
Tel. 33 (1) 47 44 45 90
Paul FLOREN
Tel. : 33 (1) 47 44 45 91
Christine de CHAMPEAUX
Tel : 33 (1) 47 44 47 49
Bertille ARON
Tel. : 33 (1) 47 44 67 12
Mary DWYER
Tel.: 33 (1) 47 44 21 19
Isabelle CABROL
Tel. : 33 (1) 47 44 64 24
Charles-Edouard ANFRAY
Tel. : 33 (1) 47 44 65 55
Franklin BOITIER
Tel. : 33 (1) 47 44 59 81
Philippe GATEAU
Tel. : 33 (1) 47 44 47 05
TOTAL S.A.
Capital 6 179 016 260 euros
542 051 180 R.C.S. Nanterre
www.total.com
•   First quarter 2006 results
     > Operating income
In the first quarter 2006, the average Brent oil price rose to 61.8 $/b, an increase of 30% compared to the first quarter 2005 and 9% compared to the fourth quarter 2005. The TRCV European refining margin indicator was 25.8 $/t on average over the quarter, a 19% decrease compared to the first quarter 2005 and a 43% decrease compared to the fourth quarter 2005, a period marked by high refining margins in the aftermath of hurricanes in the Gulf of Mexico.
Petrochemical margins in the Atlantic Basin were at a level comparable to the fourth quarter 2005 but were substantially lower compared to the first quarter 2005. The euro/dollar exchange rate was 1.20 $/€ compared to 1.31 $/€ in the first quarter 2005 and 1.19 $/€ in the fourth quarter 2005.
In this context, the adjusted operating income from the business segments increased by 24% to 6,767 million euros (M€) in the first quarter 2006 from 5,456 M€ in the first quarter 20055.
Adjusted net operating income from the business segments was 3,269 M€ compared to 2,877 M€ in the first quarter 2005, an increase of 14%. The lower percentage increase relative to the increase in operating income is a function of the Upstream segment having a higher effective tax rate and a larger proportion of the results in the first quarter 2006 compared to the first quarter 2005. Sequentially, the change in adjusted net operating income is in line with the change in adjusted operating income.
     > Net income
Adjusted net income increased by 16% to 3,376 M€ in the first quarter 2006 from 2,919 M€ in the first quarter 2005. This excludes the after-tax inventory effect, special items, and the Group’s equity share of amortization of intangibles related to the Sanofi-Aventis merger.
The after-tax inventory effect (FIFO vs. replacement cost) had a positive impact of 280 M€ in the first quarter 2006 and 496 M€ in the first quarter 2005. Special items had a positive impact on net income of 110 M€ in the first quarter 2006 and were composed mainly of the gain on the sale of Upstream assets in the US. In the first quarter 2005, special items had a negative impact on net income of 125 M€ and were composed mainly of restructuring charges in the Chemicals. The Group’s equity share of amortization of intangibles related to the Sanofi-Aventis merger had a negative impact on net income of 83 M€ in the first quarter 2006 and 82 M€ in the first quarter 2005.
Reported net income was 3,683 M€ compared to 3,208 M€ in the first quarter 2005.
The effective tax rate6 for the Group was 55% in the first quarter 2006 compared to 55% in the fourth quarter 2005 and 51% in the first quarter 2005.
In the first quarter 2006, the Group bought back 5.5 million of its shares for 1,190 M€. As of March 31, 2006 there were 583.4 million fully-diluted shares compared to 586.0 million at December 31, 2005 and 594.9 million at March 31, 2005. In April 2006, the Group bought back 0.5 million shares for 110 M€, bringing the cumulative buyback since the start of the year to nearly 1% of the capital.
Adjusted fully-diluted earnings per share, based on 584.0 million fully-diluted weighted-average shares, rose to 5.78 euros in the first quarter 2006 from 4.90 euros in the first quarter 2005, an increase of 18%, which is a higher percentage increase than shown for the adjusted net income thanks to the accretive effect of share buybacks.
 
5   special items in the first quarter 2006 included a charge related to the spin-off of Arkema for 5 M€. There were no special items affecting first quarter 2005 operating income.
 
6   defined as : (tax on net adjusted operating income) / (net adjusted operating income — income from equity affiliates, dividends received from investments and impairments of acquisition goodwill + tax on adjusted net operating income)


3

 

2, place de la Coupole
La Défense 6
92 400 Courbevoie France
Fax : 33 (1) 47 44 68 21
Catherine ENCK
Tel. 33 (1) 47 44 37 76
Patricia MARIE
Tel. 33 (1) 47 44 45 90
Paul FLOREN
Tel. : 33 (1) 47 44 45 91
Christine de CHAMPEAUX
Tel : 33 (1) 47 44 47 49
Bertille ARON
Tel. : 33 (1) 47 44 67 12
Mary DWYER
Tel.: 33 (1) 47 44 21 19
Isabelle CABROL
Tel. : 33 (1) 47 44 64 24
Charles-Edouard ANFRAY
Tel. : 33 (1) 47 44 65 55
Franklin BOITIER
Tel. : 33 (1) 47 44 59 81
Philippe GATEAU
Tel. : 33 (1) 47 44 47 05
TOTAL S.A.
Capital 6 179 016 260 euros
542 051 180 R.C.S. Nanterre
www.total.com
     > Investments — divestments
Investments in the first quarter 2006 were 2,750 M€ compared to 1,784 M€ in the first quarter 2005. Expressed in dollars, investments increased by 41% to 3.31 billion.
Divestments in the first quarter 2006 were 397 M€ and included the sale of Upstream assets in the US.
      > Cash flow
Cash flow from operations increased by 20% in the first quarter 2006 to 4,839 M€ from 4,037 M€ in the first quarter 2005.
Adjusted cash flow (cash flow from operations before changes in working capital at replacement cost) was 4,287 M€ in the first quarter 2006, an increase of 1% compared to the first quarter 2005.
Net cash flow7 was 2,486 M€ compared to 2,466 M€ in the first quarter 2005.
The net-debt-to-equity ratio was 26% at March 31, 2006 compared to 32% at December 31, 2005 and 24% at March 31, 20058.
 
7   net cash flow = cash flow from operations + divestments — investments
 
8   calculations detailed on page 13


4

 

2, place de la Coupole
La Défense 6
92 400 Courbevoie France
Fax : 33 (1) 47 44 68 21
Catherine ENCK
Tel. 33 (1) 47 44 37 76
Patricia MARIE
Tel. 33 (1) 47 44 45 90
Paul FLOREN
Tel. : 33 (1) 47 44 45 91
Christine de CHAMPEAUX
Tel : 33 (1) 47 44 47 49
Bertille ARON
Tel. : 33 (1) 47 44 67 12
Mary DWYER
Tel.: 33 (1) 47 44 21 19
Isabelle CABROL
Tel. : 33 (1) 47 44 64 24
Charles-Edouard ANFRAY
Tel. : 33 (1) 47 44 65 55
Franklin BOITIER
Tel. : 33 (1) 47 44 59 81
Philippe GATEAU
Tel. : 33 (1) 47 44 47 05
TOTAL S.A.
Capital 6 179 016 260 euros
542 051 180 R.C.S. Nanterre
www.total.com
• Upstream
     > Environment — liquids and gas price realizations*
                                 
                            1Q06 vs
    1Q06   4Q05   1Q05   1Q05
 
Brent ($/b)
     61.8       56.9       47.6       +30 %
 
Average liquids price ($/b)
     58.8       54.5       44.1       +33 %
 
Average gas price ($/Mbtu)
     6.16       5.68       4.40       +40 %
 
*   consolidated subsidiaries, excluding fixed margin and buy-back contracts
Total’s average liquids price increased by more than the benchmark Brent price, reflecting mainly the lower price differential between light and heavy crude oil. Total’s average gas price benefited from the lag effect and higher spot market prices, notably in Europe.
     > Production
                                 
                            1Q06 vs
Hydrocarbon production   1Q06   4Q05   1Q05   1Q05
 
Combined production (kboe/d)
     2,440       2,463       2,562       -5 %
 
• Liquids (kb/d)
     1,560       1,592       1,657       -6 %
• Gas (Mcfd)
     4,795       4,896       4,945       -3 %
 
Hydrocarbon production declined by 4.8% to 2,440 thousand barrels of oil equivalent per day (kboe/d) in the first quarter 2006 from 2,562 kboe/d in the first quarter 2005, mainly due to the price effect9, which accounts for more than half of the decline, and the effects of divestments in the US and disruptions in Nigeria.
Compared to the fourth quarter 2005, production declined by about 1%, due to the price effect. The benefit of new production (mainly from fourth quarter 2005 start-ups, such as Bonga in Nigeria and Forvie in the UK) was offset by disruptions in Nigeria, unscheduled maintenance in Norway as well as by the impacts of divesting onshore US assets and natural declines on mature fields.
     > Results
                                 
                            1Q06 vs
in millions of euros   1Q06   4Q05   1Q05   1Q05
 
Adjusted operating income*
     5,601       5,000       4,010       +40 %
 
Adjusted net operating income*
     2,400       2,132       1,808       +33 %
• Income from equity affiliates
     143       107       117       +22 %
 
Investments
     2,081       2,521       1,363       +53 %
 
Divestments at selling price
     353       141       128       +176 %
 
Cash flow from operations
     3,831       2,374       2,188       +75 %
 
*   detail of adjustment items shown in business segment information
Adjusted net operating income for the Upstream segment increased by 33% to 2,400 M€ in the first quarter 2006 from 1,808 M€ in the first quarter 2005.
 
9   impact of hydrocarbon prices on entitlement volumes from production sharing and buy-back contracts


5

 

2, place de la Coupole
La Défense 6
92 400 Courbevoie France
Fax : 33 (1) 47 44 68 21
Catherine ENCK
Tel. 33 (1) 47 44 37 76
Patricia MARIE
Tel. 33 (1) 47 44 45 90
Paul FLOREN
Tel. : 33 (1) 47 44 45 91
Christine de CHAMPEAUX
Tel : 33 (1) 47 44 47 49
Bertille ARON
Tel. : 33 (1) 47 44 67 12
Mary DWYER
Tel.: 33 (1) 47 44 21 19
Isabelle CABROL
Tel. : 33 (1) 47 44 64 24
Charles-Edouard ANFRAY
Tel. : 33 (1) 47 44 65 55
Franklin BOITIER
Tel. : 33 (1) 47 44 59 81
Philippe GATEAU
Tel. : 33 (1) 47 44 47 05
TOTAL S.A.
Capital 6 179 016 260 euros
542 051 180 R.C.S. Nanterre
www.total.com
This increase reflects essentially the benefit of higher oil and gas prices, which was slightly offset by a decrease in volumes sold and an increase in production costs.
Income from equity affiliates increased mainly due to the stronger oil market environment and in particular includes the growing contribution from trains 4 and 5 at Nigeria LNG.
The average Upstream tax rate increased to 60% in the first quarter 2006 from 58% in the first quarter 2005. This change is essentially related to higher oil and gas prices. The tax rate remained stable from the fourth quarter 2005 to the first quarter 2006, as the effect of higher oil and gas prices was offset by a decrease in the proportion of income derived from heavily-taxed countries, such as Nigeria and Norway.
The return on average capital employed (ROACE10) for the Upstream segment for the twelve months ended March 31, 2006 was 42% compared to 40% for the full year 2005.
The Upstream investment program for 2006 is progressing as planned.
 
10   calculated based on adjusted net operating income and average capital employed, using replacement cost, as shown on page 14


6

 

2, place de la Coupole
La Défense 6
92 400 Courbevoie France
Fax : 33 (1) 47 44 68 21
Catherine ENCK
Tel. 33 (1) 47 44 37 76
Patricia MARIE
Tel. 33 (1) 47 44 45 90
Paul FLOREN
Tel. : 33 (1) 47 44 45 91
Christine de CHAMPEAUX
Tel : 33 (1) 47 44 47 49
Bertille ARON
Tel 33 (1) 47 44 67 12
Mary DWYER
Tel. : 33 (1) 47 44 21 19
Isabelle CABROL
Tel. : 33 (1) 47 44 64 24
Charles-Edouard ANFRAY
Tel. : 33 (1) 47 44 65 55
Franklin BOITIER
Tel. : 33 (1) 47 44 59 81
Philippe GATEAU
Tel. : 33 (1) 47 44 47 05
TOTAL S.A.
Capital 6 179 016 260 euros
542 051 180 R.C.S. Nanterre
www.total.com
l Downstream
     > Refinery throughput
                                 
                            1Q06 vs  
Refinery throughput (kb/d)   1Q06     4Q05     1Q05     1Q05  
 
Total refinery throughput*
     2,421       2,420       2,626       -8 %
 
• France
     899       928       1,049       -14 %
• Rest of Europe*
     1,217       1,204       1,252       -3 %
• Rest of world
     305       288       325       -6 %
 
* includes share of Cepsa
The refinery utilization rate was 86% compared to 89% in the fourth quarter 2005 and 95% in the first quarter 2005.
The first quarter 2006 utilization rate reflected among other things the impact of a turnaround at the Provence refinery and nearly three weeks of repair and maintenance at the Flanders refinery after an electrical fire.
Turnaround activity was particularly low in the first quarter 2005 (only the Grandpuits refinery was turned around at the end of the quarter).
In the fourth quarter 2005, the Port Arthur refinery was shut down (due to hurricanes) as was the Normandy refinery (due to strikes).
     > Results
                                 
                            1Q06 vs  
    1Q06     4Q05     1Q05     1Q05  
 
TRCV – European refining margin indicator ($/t)
     25.8       45.5       31.7       -19 %
 
 
                                
 
Adjusted operating income* (M€)
     856       1,083       891       -4 %
 
Adjusted net operating income* (M€)
     650       799       678       -4 %
 
                                
• Income from equity affiliates
     80       97       85       -6 %
 
 
                                
 
Investments (M€)
     321       710       217       +48 %
 
Divestments (M€)
at selling price
     13       80       45       -71 %
 
Cash flow from operations (M€)
     1,201       211       1,689       -29 %
 
Adjusted cash flow from operations (M€)
     831       1,168       748       +11 %
 
* detail of adjustment items shown in business segment information
Adjusted net operating income for the Downstream segment was 650 M€ compared to 678 M€ in the first quarter 2005, a decrease of 4%.
The first quarter 2006 refining environment in Europe was less favorable than in the first quarter 2005. This trend, combined with lower throughput, was only partially offset by an improved marketing environment, better refining margins in the US, the increase in the dollar and the impact of self-help programs.
The ROACE for the Downstream for the twelve months ended March 31, 2006 was 29% compared to 28% for the full year 2005.


7

 

2, place de la Coupole
La Défense 6
92 400 Courbevoie France
Fax : 33 (1) 47 44 68 21
Catherine ENCK
Tel. 33 (1) 47 44 37 76
Patricia MARIE
Tel. 33 (1) 47 44 45 90
Paul FLOREN
Tel. : 33 (1) 47 44 45 91
Christine de CHAMPEAUX
Tel : 33 (1) 47 44 47 49
Bertille ARON
Tel. : 33 (1) 47 44 67 12
Mary DWYER
Tel. : 33 (1) 47 44 21 19
Isabelle CABROL
Tel. : 33 (1) 47 44 64 24
Charles-Edouard ANFRAY
Tel. : 33 (1) 47 44 65 55
Franklin BOITIER
Tel. : 33 (1) 47 44 59 81
Philippe GATEAU
Tel. : 33 (1) 47 44 47 05
TOTAL S.A.
Capital 6 179 016 260 euros
542 051 180 R.C.S. Nanterre
www.total.com
l Chemicals
     > Results
                                 
                            1Q06 vs  
in millions of euros   1Q06     4Q05     1Q05     1Q05  
 
Sales
     6,191       5,671       5,518       +12 %
 
• Base chemicals
     2,863       2,641       2,587       +11 %
• Specialties
     1,826       1,653       1,568       +16 %
• Arkema
     1,502       1,377       1,360       +10 %
• Corporate — Chemicals
     —       —       3     ns
 
Adjusted operating income*
     310       247       555       -44 %
 
Adjusted net operating income*
     219       164       391       -44 %
 
• Base chemicals
     78       78       254       -69 %
• Specialties
     103       84       70       +47 %
• Arkema
     37       4       62       -40 %
• Corporate — Chemicals
     1       (2 )     5     ns
 
 
                                
 
Investments
     324       437       158       +105 %
 
Divestments
at selling price
     28       29       22       +27 %
 
Cash flow from operations
     (37 )     161       82     ns
 
Adjusted cash flow from operations
     305       164       544       -44 %
 
* detail of adjustment items shown in business segment information
Sales for the Chemicals segment increased by 12% to 6,191 M€ in the first quarter 2006 from 5,518 M€ in the first quarter 2005.
Adjusted net operating income for the Chemicals segment was 219 M€, a decrease of 44% compared to the first quarter 2005.
In a context of higher raw material prices, petrochemical margins in the first quarter 2006, particularly in Europe, were substantially lower than in the first quarter 2005, which was a peak of the cycle. Compared to the fourth quarter 2005, margins were slightly lower but polymer sales were higher.
In a generally favorable environment, notably in Europe, results for the Specialties sector increased sharply, particularly in the electroplating and resins sectors.
The decrease in the results of Arkema relative to the first quarter 2005 was due essentially to a less favorable environment for vinyl products and acrylics.
Preparations continued for the May 18, 2006 Arkema spin-off, which will be voted on at the May 12, 2006 Annual Meeting. One important step was obtaining the visa for the Arkema prospectus from the French market authorities on April 5.
The ROACE for the Chemicals segment for the twelve months ended March 31, 2006 was 8.5% compared to 11% for the full year 2005.


8

 

2, place de la Coupole
La Défense 6
92 400 Courbevoie France
Fax : 33 (1) 47 44 68 21
Catherine ENCK
Tel. 33 (1) 47 44 37 76
Patricia MARIE
Tel. 33 (1) 47 44 45 90
Paul FLOREN
Tel. : 33 (1) 47 44 45 91
Christine de CHAMPEAUX
Tel : 33 (1) 47 44 47 49
Bertille ARON
Tel. : 33 (1) 47 44 67 12
Mary DWYER
Tel. : 33 (1) 47 44 21 19
Isabelle CABROL
Tel. : 33 (1) 47 44 64 24
Charles-Edouard ANFRAY
Tel. : 33 (1) 47 44 65 55
Franklin BOITIER
Tel. : 33 (1) 47 44 59 81
Philippe GATEAU
Tel. : 33 (1) 47 44 47 05
TOTAL S.A.
Capital 6 179 016 260 euros
542 051 180 R.C.S. Nanterre
www.total.com
l Summary and outlook
The ROACE for the Group was 28% for the 12 months ended March 31, 2006 compared to 27% for the full year 2005.
The return on equity calculated for the twelve months ended March 31, 2006 was 34%.
The investment program is proceeding as expected, with the priority being Upstream growth and increased investments for refining.
The Group maintains its net-debt-to-equity ratio in its target range of about 25% to 30%.
Subject to shareholder approval at the May 12, 2006 Annual Meeting, Total will proceed on May 18, 2006 to split the 10 € par value shares four-for-one, pay the balance of the 2005 dividend11, and spin-off Arkema at the rate of one Arkema share for every ten Total shares held on May 17, 2006.
The spin-off of Arkema will represent the completion of a project initiated more than two years ago, and it will have the effect of reducing the weight of Chemicals in the capital employed of the Group while creating an independent integrated player that will rank among the leaders of its markets.
Since the beginning of the second quarter 2006, the perceived risks to the oil supply have pushed prices to new records, and refining margins have increased slightly from first quarter levels.
¨ ¨ ¨
To listen to the conference call with CFO Robert Castaigne and financial analysts today at 16:30 (Paris time) please call +44 (0)20 7162 0125 in Europe or +1 334 323 6203 in the US (access code : Total) or log on to the company website www.total.com. For a replay, dial +44 (0)207 031 4064 in Europe or 1 954 334 0342 (code :696 767).
The March 31, 2006 notes to the consolidated accounts are available on the Total web site (www.total.com). This document may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, business, strategy and plans of Total. Such statements are based on a number of assumptions that could ultimately prove inaccurate, and are subject to a number of risk factors, including currency fluctuations, the price of petroleum products, the ability to realize cost reductions and operating efficiencies without unduly disrupting business operations, environmental regulatory considerations and general economic and business conditions. Total does not assume any obligation to update publicly any forward-looking statement, whether as a result of new information, future events or otherwise. Further information on factors which could affect the company’s financial results is provided in documents filed by the Group and its affiliates with the French Autorité des Marchés Financiers and the US Securities and Exchange Commission.
The business segment information is presented in accordance with the Group internal reporting system used by the Chief operating decision maker to measure performance and allocate resources internally. Due to their particular nature or significance, certain transactions qualified as “special items” are monitored at the Group level and excluded from the business segment figures. In general, special items relate to transactions that are significant, infrequent or unusual. However, in certain instances, certain transactions such as restructuring costs or assets disposals, which are not considered to be representative of normal course of business, may be qualified as special items although they may have occurred within prior years or are likely to recur within following years.
In accordance with IAS 2, the Group values inventories of crude oil and petroleum products in the financial statements in accordance with the FIFO (First in, First out) method and other inventories using the weighted-average cost method. However, in the note setting forth information by business segment, the Group continues to present the results for the Downstream segment according to the replacement cost method and those of the Chemicals segment according to the LIFO (Last in, First out) method in order to ensure the comparability of the Group’s results with those of its main competitors, notably from North America. The inventory valuation effect is the difference between the results according to the FIFO method and the results according to the replacement cost or LIFO method.
In this framework, performance measures such as adjusted operating income, adjusted net operating income and adjusted net income are defined as incomes using replacement cost, adjusted for special items and excluding Total’s equity share of the amortization of intangibles related to the Sanofi-Aventis merger. They are meant to facilitate the analysis of the financial performance and the comparison of income between periods.
 
11   taking into account the November 2005 interim dividend of 3 €, the balance of the 2005 dividend will be 3.48 € for the 10 € par value shares


9

 

Operating information by segment
First quarter 2006

2, place de la Coupole
La Défense 6
92 400 Courbevoie France
Fax : 33 (1) 47 44 68 21
Catherine ENCK
Tel. 33 (1) 47 44 37 76
Patricia MARIE
Tel. 33 (1) 47 44 45 90
Paul FLOREN
Tel. : 33 (1) 47 44 45 91
Christine de CHAMPEAUX
Tel : 33 (1) 47 44 47 49
Bertille ARON
Tel. : 33 (1) 47 44 67 12
Mary DWYER
Tel.: 33 (1) 47 44 21 19
Isabelle CABROL
Tel. : 33 (1) 47 44 64 24
Charles-Edouard ANFRAY
Tel. : 33 (1) 47 44 65 55
Franklin BOITIER
Tel. : 33 (1) 47 44 59 81
Philippe GATEAU
Tel. : 33 (1) 47 44 47 05
TOTAL S.A.
Capital 6 179 016 260 euros
542 051 180 R.C.S. Nanterre
www.total.com
l Upstream
                                 
                            1Q06 vs
Combined liquids and gas production by region (kboe/d)   1Q06   4Q05   1Q05   1Q05
 
Europe
     778       759       830       -6 %
 
                                
Africa
     742       756       804       -8 %
 
                                
North America
     13       33       37       -65 %
 
                                
Far East
     253       247       256       -1 %
 
                                
Middle East
     411       410       394       +4 %
 
                                
South America
     236       249       232       +2 %
 
                                
Rest of world
     7       9       9       -22 %
 
 
                                
Total production
     2,440       2,463       2,562       -5 %
 
                                 
                            1Q06 vs
Liquids production by region (kb/d)   1Q06   4Q05   1Q05   1Q05
 
Europe
     378       381       415       -9 %
 
                                
Africa
     656       678       720       -9 %
 
                                
North America
     2       3       6       -67 %
 
                                
Far East
     29       26       30       -3 %
 
                                
Middle East
     357       359       339       +5 %
 
                                
South America
     131       137       139       -6 %
 
                                
Rest of world
     7       8       8       -13 %
 
 
                                
Total liquids production
     1,560       1,592       1,657       -6 %
 


      

10

 

2, place de la Coupole
La Défense 6
92 400 Courbevoie France
Fax : 33 (1) 47 44 68 21
Catherine ENCK
Tel. 33 (1) 47 44 37 76
Patricia MARIE
Tel. 33 (1) 47 44 45 90
Paul FLOREN
Tel. : 33 (1) 47 44 45 91
Christine de CHAMPEAUX
Tel : 33 (1) 47 44 47 49
Bertille ARON
Tel. : 33 (1) 47 44 67 12
Mary DWYER
Tel.: 33 (1) 47 44 21 19
Isabelle CABROL
Tel. : 33 (1) 47 44 64 24
Charles-Edouard ANFRAY
Tel. : 33 (1) 47 44 65 55
Franklin BOITIER
Tel. : 33 (1) 47 44 59 81
Philippe GATEAU
Tel. : 33 (1) 47 44 47 05
TOTAL S.A.
Capital 6 179 016 260 euros
542 051 180 R.C.S. Nanterre
www.total.com
                                 
                            1Q06 vs
Gas production by region (Mcfd)   1Q06   4Q05   1Q05   1Q05
 
Europe
     2,172       2,048       2,258       -4 %
 
                                
Africa
     457       412       450       +2 %
 
                                
North America
     63       156       165       -62 %
 
                                
Far East
     1,238       1,366       1,257       -2 %
 
                                
Middle East
     284       274       296       -4 %
 
                                
South America
     579       638       517       +12 %
 
                                
Rest of world
     2       2       2       —  
 
 
                                
Total gas production
     4,795       4,896       4,945       -3 %
 
l Downstream
                                 
                            1Q06 vs
Refined product sales by region (kb/d)*   1Q06   4Q05   1Q05   1Q05
 
Europe
     2,689       2,755 **     2,858       -6 %
 
                                
Africa
     319       337       318       —  
 
                                
Americas
     626       571       591       +6 %
 
                                
Rest of world
     230       208       223       +3 %
 
 
                                
Total
     3,864       3,871 **     3,990       -3 %
 
*   includes trading and equity share of Cepsa
 
**   after correcting a reporting difference


      

11

 

Adjustment items

2, place de la Coupole
La Défense 6
92 400 Courbevoie France
Fax : 33 (1) 47 44 68 21
Catherine ENCK
Tel. 33 (1) 47 44 37 76
Patricia MARIE
Tel. 33 (1) 47 44 45 90
Paul FLOREN
Tel. : 33 (1) 47 44 45 91
Christine de CHAMPEAUX
Tel : 33 (1) 47 44 47 49
Bertille ARON
Tel. : 33 (1) 47 44 67 12
Mary DWYER
Tel.: 33 (1) 47 44 21 19
Isabelle CABROL
Tel. : 33 (1) 47 44 64 24
Charles-Edouard ANFRAY
Tel. : 33 (1) 47 44 65 55
Franklin BOITIER
Tel. : 33 (1) 47 44 59 81
Philippe GATEAU
Tel. : 33 (1) 47 44 47 05
TOTAL S.A.
Capital 6 179 016 260 euros
542 051 180 R.C.S. Nanterre
www.total.com
l Adjustments to operating income from business segments
                         
in millions of euros   1Q06   4Q05   1Q05
 
Special items affecting operating income from business segments
     (5 )     (400 )     —  
 
• Restructuring charges
     —       (26 )     —  
• Impairments
     —       (238 )     —  
• Other
     (5 )     (136 )     —  
 
 
                        
Pre-tax inventory effect : FIFO vs. replacement cost
     373       (914 )     722  
 
 
                        
 
Total adjustments affecting operating income from business segments
     368       (1,314 )     722  
 
l Adjustments to net income (Group share)
                         
in millions of euros   1Q06   4Q05   1Q05
 
Special items affecting net income (Group share)
     110       (193 )     (125 )
 
• Equity share of special items recorded by Sanofi-Aventis
     2       (42 )     (42 )
• Gain on asset sales
     130       —       —  
• Restructuring charges
     (15 )     (40 )     (83 )
• Impairments
     —       (207 )     —  
• Other
     (7 )     96       —  
 
Adjustment related to the Sanofi-Aventis merger*
                        
(share of amortization of intangible assets)
     (83 )     (88 )     (82 )
 
 
                        
After-tax inventory effect : FIFO vs. replacement cost
     280       (430 )     496  
 
 
                        
 
Total adjustments to net income
     307       (711 )     289  
 
*   based on 13% participation in Sanofi-Aventis at 31/03/2005, 31/12/2005 and 31/03/2006


      

12

 

Net-debt-to-equity ratio

2, place de la Coupole
La Défense 6
92 400 Courbevoie France
Fax : 33 (1) 47 44 68 21
Catherine ENCK
Tel. 33 (1) 47 44 37 76
Patricia MARIE
Tel. 33 (1) 47 44 45 90
Paul FLOREN
Tel. : 33 (1) 47 44 45 91
Christine de CHAMPEAUX
Tel : 33 (1) 47 44 47 49
Bertille ARON
Tel. : 33 (1) 47 44 67 12
Mary DWYER
Tel.: 33 (1) 47 44 21 19
Isabelle CABROL
Tel. : 33 (1) 47 44 64 24
Charles-Edouard ANFRAY
Tel. : 33 (1) 47 44 65 55
Franklin BOITIER
Tel. : 33 (1) 47 44 59 81
Philippe GATEAU
Tel. : 33 (1) 47 44 47 05
TOTAL S.A.
Capital 6 179 016 260 euros
542 051 180 R.C.S. Nanterre
www.total.com
                         
in millions of euros   Mar 31, 2006   Dec 31, 2005   Mar 31, 2005
 
Current borrowings
     12,618       3,920       9,915  
 
                        
Net current financial instruments
     (95 )     (301 )     (203 )
 
                        
Non-current financial debt
     13,491       13,793       12,223  
 
                        
Hedging instruments of non-current debt
     (453 )     (477 )     (1,428 )
 
                        
Cash and cash equivalents
     (14,816 )     (4,318 )     (12,548 )
 
 
                        
Net debt
     10,745       12,617       7,959  
 
 
                        
 
 
                        
Shareholders equity
     43,170       40,645       35,052  
 
                        
Accrued dividend payable based on shares at the close of the period*
     (2,941 )     (2,006 )     (2,557 )
 
                        
MMPS
     —       —       117  
 
                        
Minority interests
     913       838       729  
 
 
                        
 
 
                        
Equity
     41,142       39,477       33,341  
 
 
                        
 
 
                        
Net-debt-to-equity ratio
     26.1 %     32.0 %     23.9 %
 
*   for March 31, 2006, this represents a distribution of a dividend equal to 6.48 € /share for each 10€ par value share after deducting the interim dividend of 1,746 M€ paid in November 2005


      

13

 

Return on average capital employed

2, place de la Coupole
La Défense 6
92 400 Courbevoie France
Fax : 33 (1) 47 44 68 21
Catherine ENCK
Tel. 33 (1) 47 44 37 76
Patricia MARIE
Tel. 33 (1) 47 44 45 90
Paul FLOREN
Tel. : 33 (1) 47 44 45 91
Christine de CHAMPEAUX
Tel : 33 (1) 47 44 47 49
Bertille ARON
Tel. : 33 (1) 47 44 67 12
Mary DWYER
Tel.: 33 (1) 47 44 21 19
Isabelle CABROL
Tel. : 33 (1) 47 44 64 24
Charles-Edouard ANFRAY
Tel. : 33 (1) 47 44 65 55
Franklin BOITIER
Tel. : 33 (1) 47 44 59 81
Philippe GATEAU
Tel. : 33 (1) 47 44 47 05
TOTAL S.A.
Capital 6 179 016 260 euros
542 051 180 R.C.S. Nanterre
www.total.com
l For the 12 months ended March 31, 2006
                                         
in millions of euros   Upstream   Downstream   Chemicals**   Segments   Group
 
Adjusted net operating income
     8,621       2,888       785       12,294       13,032  
 
                                        
Capital employed at March 31, 2005*
     17,877       8,735       8,807       35,419       41,907  
Capital employed at March 31, 2006*
     23,282       11,296       9,593       44,171       52,021  
 
 
                                        
ROACE
     41.9 %     28.8 %     8.5 %     30.9 %     27.7 %
 
*   at replacement cost (excluding after-tax inventory effect)
 
**   capital employed for Chemicals reduced for the Toulouse-AZF provision of 100 M€ pre-tax at March 31, 2005 and 122 M€ pre-tax at March 31, 2006
l For the 12 months ended March 31, 2005
                                         
in millions of euros   Upstream   Downstream   Chemicals **   Segments   Group
 
Adjusted net operating income
     6,268       2,584       1,016       9,868       10,530  
 
                                        
Capital employed at March 31, 2004*
     17,307       8,052       9,174       34,533       38,475  
Capital employed at March 31, 2005*
     17,877       8,735       8,807       35,419       41,907  
 
 
                                        
ROACE
     35.6 %     30.8 %     11.3 %     28.2 %     26.2 %
 
*   at replacement cost (excluding after-tax inventory effect)
 
**   capital employed for Chemicals reduced for the Toulouse-AZF provision of 146 M€ pre-tax at March 31, 2004 and 100 M€ pre-tax at March 31, 2005
l For the full year 2005
                                         
in millions of euros   Upstream     Downstream     Chemicals**     Segments     Group  
 
Adjusted net operating income
     8,029       2,916       957       11,902       12,576  
 
                                        
Capital employed at December 31, 2004*
     16,280       9,654       8,263       34,197       40,372  
Capital employed at December 31, 2005*
     23,522       11,421       9,120       44,063       51,576  
 
 
                                        
ROACE
     40.3 %     27.7 %     11.0 %     30.4 %     27.4 %
 
*   at replacement cost (excluding after-tax inventory effect)
 
**   capital employed for Chemicals reduced for the Toulouse-AZF provision of 110 M€ pre-tax at December 31, 2004 and 133 M€ pre-tax at December 31, 2005
14

 

CONSOLIDATED STATEMENT OF INCOME
Total
(unaudited)
                 
    1st quarter     1st quarter  
Amounts in millions of euros (1)   2006     2005  
 
Sales
     39,605       31,739  
Excise taxes
     (4,607 )     (5,051 )
Revenues from sales
     34,998       26,688  
 
                
Purchases, net of inventory variation
     (21,066 )     (14,877 )
Other operating expenses
     (5,495 )     (4,435 )
Unsuccessful exploration costs
     (115 )     (72 )
Depreciation, depletion, and amortization of tangible assets and leasehold rights
     (1,285 )     (1,191 )
 
 
                
Operating income
                
Corporate
     (98 )     (65 )
Business segments *
     7,135       6,178  
 
Total operating income
     7,037       6,113  
 
 
                
Other income
     261       4  
Other expense
     (119 )     (172 )
 
                
Financial interest on debt
     (332 )     (254 )
Financial income from marketable securities and cash equivalents
     272       184  
Cost of net debt
     (60 )     (70 )
 
                
Other financial income
     106       88  
Other financial expense
     (54 )     (66 )
Income taxes
     (3,844 )     (2,899 )
Equity in income (loss) of affiliates
     444       295  
 
Consolidated net income
     3,771       3,293  
 
Group share **
     3,683       3,208  
Minority interests and dividends on subsidiaries’ redeemable preferred shares
     88       85  
 
Earnings per share (euros)
     6.36       5.40  
 
Fully-diluted earnings per share (euros) ***
     6.30       5.38  
 
 
                
 
                
 
                
 
* Adjusted operating income from business segments
     6,767       5,456  
 
Adjusted net operating income from business segments
     3,269       2,877  
 
** Adjusted net income
     3,376       2,919  
 
*** Adjusted fully-diluted earnings per share (euros)
     5.78       4.90  
 
(1)   except for earnings per share

 

 

CONSOLIDATED BALANCE SHEET
Total
                         
    Amounts in millions of euros  
    March 31, 2006     December 31,     March 31, 2005  
    (unaudited)     2005     (unaudited)  
 
ASSETS
                        
 
                        
NON-CURRENT ASSETS
                        
Intangible assets, net
     4,836       4,384       3,274  
Property, plant and equipment, net
     40,244       40,568       36,184  
Equity affiliates: investments and loans
     13,059       12,652       11,298  
Other investments
     1,689       1,516       1,156  
Hedging instruments of non-current financial debt
     453       477       1,428  
Other non-current assets
     3,180       2,794       2,033  
 
Total non-current assets
     63,461       62,391       55,373  
 
 
                        
CURRENT ASSETS
                        
Inventories, net
     12,672       12,690       10,459  
Accounts receivable, net
     19,642       19,612       16,593  
Prepaid expenses and other current assets
     6,969       6,799       5,258  
Current financial instruments
     204       334       257  
Cash and cash equivalents
     14,816       4,318       12,548  
 
Total current assets
     54,303       43,753       45,515  
 
TOTAL ASSETS
     117,764       106,144       100,488  
 
 
                        
LIABILITIES & SHAREHOLDERS’ EQUITY
                        
 
                        
SHAREHOLDERS’ EQUITY
                        
Common shares
     6,179       6,151       6,358  
Paid-in surplus and retained earnings
     41,809       37,504       35,023  
Cumulative translation adjustment
     744       1,421       (481 )
Treasury shares
     (5,562 )     (4,431 )     (5,848 )
 
SHAREHOLDERS’ EQUITY — GROUP SHARE
     43,170       40,645       35,052  
 
Minority interests and subsidiaries’ redeemable preferred shares
     913       838       846  
 
TOTAL SHAREHOLDERS’ EQUITY
     44,083       41,483       35,898  
 
 
                        
NON-CURRENT LIABILITIES
                        
Deferred income taxes
     7,228       6,976       6,700  
Employee benefits
     3,269       3,413       3,592  
Other non-current liabilities
     7,030       7,051       6,497  
 
Total non-current liabilities
     17,527       17,440       16,789  
 
Non-current financial debt
     13,491       13,793       12,223  
 
 
                        
CURRENT LIABILITIES
                        
Accounts payable
     15,559       16,406       13,080  
Other creditors and accrued liabilities
     14,377       13,069       12,529  
Current borrowings
     12,618       3,920       9,915  
Current financial instruments
     109       33       54  
 
Total current liabilities
     42,663       33,428       35,578  
 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
     117,764       106,144       100,488  
 

 

 

CONSOLIDATED STATEMENT OF CASH FLOWS
Total
(unaudited)
                 
    1st quarter     1st quarter  
Amounts in millions of euros   2006     2005  
 
CASH FLOW FROM OPERATING ACTIVITIES
                
 
                
Consolidated net income
     3,771       3,293  
Depreciation, depletion, and amortization
     1,329       1,243  
Non-current liabilities, valuation allowances, and deferred taxes
     94       549  
Unsuccessful exploration costs
     115       72  
(Gains) Losses on sales of assets
     (261 )     (4 )
Undistributed affiliates equity earnings
     (375 )     (195 )
(Increase) Decrease in operating assets and liabilities
     179       (932 )
Other changes, net
     (13 )     11  
 
CASH FLOW FROM OPERATING ACTIVITIES
     4,839       4,037  
 
 
                
CASH FLOW USED IN INVESTING ACTIVITIES
                
 
                
Intangible assets and property,plant and equipment additions
     (2,051 )     (1,513 )
Exploration costs charged directly to expense
     (110 )     (71 )
Acquisitions of subsidiaries, net of cash acquired
     (69 )     —  
Investments in equity affiliates and other securities
     (59 )     (15 )
Increase in non-current loans
     (461 )     (185 )
 
Total Expenditures
     (2,750 )     (1,784 )
Proceeds from sale of intangible assets and property, plant and equipment
     260       14  
Proceeds from sale of subsidiaries, net of cash sold
     —       11  
Proceeds from sale of non-current investments
     3       5  
Repayment of non-current loans
     134       183  
 
Total divestitures
     397       213  
 
CASH FLOW USED IN INVESTING ACTIVITIES
     (2,353 )     (1,571 )
 
 
                
CASH FLOW FROM FINANCING ACTIVITIES
                
 
                
Issuance (repayment) of shares:
                
Parent company’s shareholders
     471       —  
Treasury shares
     (1,118 )     (808 )
Minority shareholders
     12       62  
Subsidiaries’ redeemable preferred shares
     —       (38 )
Cash dividends paid:
                
- Parent company’s shareholders
     (10 )     —  
- Minority shareholders
     (6 )     (28 )
Net issuance (repayment) of non-current debt
     730       689  
Increase (Decrease) in current borrowings
     8,204       5,952  
Other changes, net
     —       (2 )
 
CASH FLOW FROM FINANCING ACTIVITIES
     8,283       5,827  
 
Net increase (decrease) in cash and cash equivalents
     10,769       8,293  
Effect of exchange rates and changes in reporting entity
     (271 )     395  
Cash and cash equivalents at the beginning of the period
     4,318       3,860  
 
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD
     14,816       12,548  
 

 

 

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
Total
                                                                                 
                    Paid-in                                     Subsidiaries’              
                    surplus and     Cumulative                             redeemable              
    Common shares issued     retained     translation     Treasury shares     Shareholders’     preferred     Minority     Total  
(Amounts in millions of euros)   Number     Amount     earnings     adjustment     Number     Amount     equity     shares     interests     equity  
 
As of January 1, 2005
     635,015,108       6,350       31,717       (1,429 )     (39,072,487 )     (5,030 )     31,608       147       663       32,418  
 
Net income for the first quarter
     —       —       3,208       —       —       —       3,208       1       84       3,293  
 
Items recognized directly in equity
     —       —       10       948       —       —       958       7       10       975  
 
Total excluding transactions with shareholders
     —       —       3,218       948       —       —       4,166       8       94       4,268  
 
Cash dividend
     —       —       —       —       —       —       —       —       (28 )     (28 )
 
Issuance of common shares
     821,475       8       55       —       —       —       63       —       —       63  
 
Purchase of treasury shares
     —       —       —       —       (4,870,000 )     (847 )     (847 )     —       —       (847 )
 
Sale of treasury shares (1)
     —       —       10       —       321,340       29       39       —       —       39  
 
Repayment of subsidiaries’ redeemable preferred shares
     —       —       —       —       —       —       —       (38 )     —       (38 )
 
Share-based payments
     —       —       23       —       —       —       23       —       —       23  
 
Transactions with shareholders
     821,475       8       88       —       (4,548,660 )     (818 )     (722 )     (38 )     (28 )     (788 )
 
Cancellation of repurchased shares
     —       —       —       —       —       —       —       —       —       —  
 
As of March 31, 2005
     635,836,583       6,358       35,023       (481 )     (43,621,147 )     (5,848 )     35,052       117       729       35,898  
 
Net income from April 1, 2005 to December 31, 2005
     —       —       9,065       —       —       —       9,065       —       285       9,350  
 
Items recognized directly in equity
     —       —       408       1,902       —       —       2,310       1       33       2,344  
 
Total excluding transactions with shareholders
     —       —       9,473       1,902       —       —       11,375       1       318       11,694  
 
Cash dividend
     —       —       (3,510 )     —       —       —       (3,510 )     —       (209 )     (3,719 )
 
Issuance of common shares
     355,281       4       33       —       —       —       37       —       —       37  
 
Purchase of treasury shares
     —       —       —       —       (13,448,500 )     (2,638 )     (2,638 )     —       —       (2,638 )
 
Sale of treasury shares (1)
     —       —       24       —       1,744,747       197       221       —       —       221  
 
Repayment of subsidiaries’ redeemable preferred shares
     —       —       —       —       —       —       —       (118 )     —       (118 )
 
Share-based payments
     —       —       108       —       —       —       108       —       —       108  
 
Transactions with shareholders
     355,281       4       (3,345 )     —       (11,703,753 )     (2,441 )     (5,782 )     (118 )     (209 )     (6,109 )
 
Cancellation of repurchased shares
     (21,075,568 )     (211 )     (3,647 )     —       21,075,568       3,858       —       —       —       —  
 
As of December 31, 2005
     615,116,296       6,151       37,504       1,421       (34,249,332 )     (4,431 )     40,645       —       838       41,483  
 
Net income for the first quarter
     —       —       3,683       —       —       —       3,683       —       88       3,771  
 
Items recognized directly in equity
     —       —       155       (677 )     —       —       (522 )     —       (7 )     (529 )
 
Total excluding transactions with shareholders
     —       —       3,838       (677 )     —       —       3,161       —       81       3,242  
 
Cash dividend
     —       —       (10 )     —       —       —       (10 )     —       (6 )     (16 )
 
Issuance of common shares
     2,827,663       28       439       —       —       —       467       —       —       467  
 
Purchase of treasury shares
     —       —       —       —       (5,500,000 )     (1,190 )     (1,190 )     —       —       (1,190 )
 
Sale of treasury shares (1)
     —       —       4       —       502,932       59       63       —       —       63  
 
Repayment of subsidiaries’ redeemable preferred shares
     —       —       —       —       —       —       —       —       —       —  
 
Share-based payments
     —       —       34       —       —       —       34       —       —       34  
 
Transactions with shareholders
     2,827,663       28       467       —       (4,997,068 )     (1,131 )     (636 )     —       (6 )     (642 )
 
Cancellation of repurchased shares
     —       —       —       —       —       —       —       —       —       —  
 
As of March 31, 2006
     617,943,959       6,179       41,809       744       (39,246,400 )     (5,562 )     43,170       —       913       44,083  
 
(1)   Treasury shares related to the stock option purchase plans

 

 

BUSINESS SEGMENT INFORMATION
Total
(unaudited)
                                                 
    Amounts in millions of euros  
1st quarter 2006   Upstream     Downstream     Chemicals     Corporate     Intercompany     Total  
 
Non-Group sales
     5,714       27,692       6,191       8               39,605  
Intersegment sales
     5,400       1,335       283       43       (7,061 )     —  
Excise taxes
     —       (4,607 )     —       —               (4,607 )
 
Revenues from sales
     11,114       24,420       6,474       51       (7,061 )     34,998  
 
Operating expenses
     (4,680 )     (22,931 )     (5,986 )     (140 )     7,061       (26,676 )
Depreciation, depletion, and amortization of tangible assets and leasehold rights
     (833 )     (260 )     (183 )     (9 )             (1,285 )
 
Operating income
     5,601       1,229       305       (98 )     —       7,037  
 
Equity in income (loss) of affiliates and other items
     383       74       (20 )     201               638  
Tax on net operating income
     (3,454 )     (373 )     (87 )     53               (3,861 )
 
Net operating income
     2,530       930       198       156               3,814  
 
Net cost of net debt
                                             (43 )
Minority interests and dividends on subsidiaries’ redeemable preferred shares
                                             (88 )
 
Net income
                                             3,683  
 
                                                 
1st quarter 2006                                    
(adjustments) (*)   Upstream     Downstream     Chemicals     Corporate     Intercompany     Total  
 
Non-Group sales
     —       —       —       —       —       —  
Intersegment sales
     —       —       —       —       —       —  
Excise taxes
     —       —       —       —       —       —  
 
Revenues from sales
                                                
 
Operating expenses
     —       373       (5 )     —               368  
Depreciation, depletion, and amortization of tangible assets and leasehold rights
     —       —       —       —               —  
 
Operating income (1)
     —       373       (5 )     —               368  
 
Equity in income (loss) of affiliates and other items (2)
     195       18       (28 )     (81 )             104  
Tax on net operating income
     (65 )     (111 )     12       —               (164 )
 
Net operating income (1)
     130       280       (21 )     (81 )             308  
 
Net cost of net debt
                                             —  
Minority interests and dividends on subsidiaries’ redeemable preferred shares
                                             (1 )
 
Net income
                                             307  
 
 
                                                
(*)   Adjustments include special items, inventory valuation effect and equity share of amortization of intangible assets related to the Sanofi-Aventis merger
 
                                                
(1)  Of which inventory valuation effect
                                              
On operating income
     —       373       —       —                  
On net operating income
     —       280       1       —                  
(2)  Of which equity share of amortization of intangible assets related to the Sanofi-Aventis merger
     —       —       —       (83 )                
                                                 
1st quarter 2006                                    
(adjusted)   Upstream     Downstream     Chemicals     Corporate     Intercompany     Total  
 
Non-Group sales
     5,714       27,692       6,191       8               39,605  
Intersegment sales
     5,400       1,335       283       43       (7,061 )     —  
Excise taxes
     —       (4,607 )     —       —               (4,607 )
 
Revenues from sales
     11,114       24,420       6,474       51       (7,061 )     34,998  
 
Operating expenses
     (4,680 )     (23,304 )     (5,981 )     (140 )     7,061       (27,044 )
Depreciation, depletion, and amortization of tangible assets and leasehold rights
     (833 )     (260 )     (183 )     (9 )             (1,285 )
 
Operating income
     5,601       856       310       (98 )             6,669  
 
Equity in income (loss) of affiliates and other items
     188       56       8       282               534  
Tax on net operating income
     (3,389 )     (262 )     (99 )     53               (3,697 )
 
Net operating income
     2,400       650       219       237               3,506  
 
Net cost of net debt
                                             (43 )
Minority interests and dividends on subsidiaries’ redeemable preferred shares
                                             (87 )
 
Net income
                                             3,376  
 
                                                 
1st quarter 2006   Upstream     Downstream     Chemicals     Corporate     Intercompany     Total  
 
Total expenditures
     2,081       321       324       24               2,750  
Divestitures at selling price
     353       13       28       3               397  
Cash flow from operating activities
     3,831       1,201       (37 )     (156 )             4,839  
 

 

 

BUSINESS SEGMENT INFORMATION
Total
(unaudited)
                                                 
    Amounts in millions of euros
1st quarter 2005   Upstream     Downstream     Chemicals     Corporate     Intercompany     Total  
 
Non-Group sales
     4,805       21,416       5,518       —               31,739  
Intersegment sales
     4,226       1,029       352       58       (5,665 )     —  
Excise taxes
     —       (5,051 )     —       —               (5,051 )
 
Revenues from sales
     9,031       17,394       5,870       58       (5,665 )     26,688  
 
Operating expenses
     (4,266 )     (15,600 )     (5,069 )     (114 )     5,665       (19,384 )
Depreciation, depletion, and amortization of tangible assets and leasehold rights
     (755 )     (251 )     (176 )     (9 )             (1,191 )
 
Operating income
     4,010       1,543       625       (65 )             6,113  
 
Equity in income (loss) of affiliates and other items
     77       115       (106 )     63               149  
Tax on net operating income
     (2,279 )     (530 )     (164 )     51               (2,922 )
 
Net operating income
     1,808       1,128       355       49               3,340  
 
Net cost of net debt
                                             (47 )
Minority interests and dividends on subsidiaries’ redeemable preferred shares
                                             (85 )
 
Net income
                                             3,208  
 
                                                 
1st quarter 2005                                    
(adjustments) (*)   Upstream     Downstream     Chemicals     Corporate     Intercompany     Total  
 
Non-Group sales
                                                
Intersegment sales
                                                
Excise taxes
                                                
 
Revenues from sales
                                                
 
Operating expenses
     —       652       70       —               722  
Depreciation, depletion, and amortization of tangible assets and leasehold rights
     —       —       —       —               —  
 
Operating income (1)
     —       652       70       —               722  
 
Equity in income (loss) of affiliates and other items (2)
     —       13       (125 )     (124 )             (236 )
Tax on net operating income
     —       (215 )     19       —               (196 )
 
Net operating income (1)
     —       450       (36 )     (124 )             290  
 
Net cost of net debt
                                             —  
Minority interests and dividends on subsidiaries’ redeemable preferred shares
                                             (1 )
 
Net income
                                             289  
 
 
(*)   Adjustments include special items, inventory valuation effect and equity share of amortization of intangible assets related to the Sanofi-Aventis merger
 
                                                
(1)  Of which inventory valuation effect
                                              
On operating income
     —       652       70       —                  
On net operating income
     —       450       47       —                  
(2)  Of which equity share of amortization of intangible assets related to the Sanofi-Aventis merger
     —       —       —       (82 )                
                                                 
1st quarter 2005                                    
(adjusted)   Upstream     Downstream     Chemicals     Corporate     Intercompany     Total  
 
Non-Group sales
     4,805       21,416       5,518       —               31,739  
Intersegment sales
     4,226       1,029       352       58       (5,665 )     —  
Excise taxes
     —       (5,051 )     —       —               (5,051 )
 
Revenues from sales
     9,031       17,394       5,870       58       (5,665 )     26,688  
 
Operating expenses
     (4,266 )     (16,252 )     (5,139 )     (114 )     5,665       (20,106 )
Depreciation, depletion, and amortization of tangible assets and leasehold rights
     (755 )     (251 )     (176 )     (9 )             (1,191 )
 
Operating income
     4,010       891       555       (65 )             5,391  
 
Equity in income (loss) of affiliates and other items
     77       102       19       187               385  
Tax on net operating income
     (2,279 )     (315 )     (183 )     51               (2,726 )
 
Net operating income
     1,808       678       391       173               3,050  
 
Net cost of net debt
                                             (47 )
Minority interests and dividends on subsidiaries’ redeemable preferred shares
                                             (84 )
 
Net income
                                             2,919  
 
                                                 
1st quarter 2005   Upstream     Downstream     Chemicals     Corporate     Intercompany     Total  
 
Total expenditures
     1,363       217       158       46               1,784  
Divestitures at selling price
     128       45       22       18               213  
Cash flow from operating activities
     2,188       1,689       82       78               4,037  
 

 

 

CONSOLIDATED STATEMENT OF INCOME (Impact of adjustments)
Total
(unaudited)
                                 
    1st quarter     1st quarter  
    2006     2005  
                    Consolidated        
Amounts in millions of euros   Adjusted     Adjustments     statement of income     Adjusted  
     
Sales
     39,605       —       39,605       31,739  
Excise taxes
     (4,607 )     —       (4,607 )     (5,051 )
Revenues from sales
     34,998       —       34,998       26,688  
 
                                
Purchases, net of inventory variation
     (21,439 )     373       (21,066 )     (15,599 )
Other operating expenses
     (5,490 )     (5 )     (5,495 )     (4,435 )
Unsuccessful exploration costs
     (115 )     —       (115 )     (72 )
Depreciation, depletion, and amortization of tangible assets and leasehold rights
     (1,285 )     —       (1,285 )     (1,191 )
     
 
                                
Operating income
                                
Corporate
     (98 )     —       (98 )     (65 )
Business segments
     6,767       368       7,135       5,456  
     
Total operating income
     6,669       368       7,037       5,391  
     
Other income
     66       195       261       4  
Other expense
     (89 )     (30 )     (119 )     (47 )
Financial interest on debt
     (332 )     —       (332 )     (254 )
Financial income from marketable securities and cash equivalents
     272       —       272       184  
Cost of net debt
     (60 )     —       (60 )     (70 )
Other financial income
     106       —       106       88  
Other financial expense
     (54 )     —       (54 )     (66 )
Income taxes
     (3,680 )     (164 )     (3,844 )     (2,703 )
Equity in income (loss) of affiliates
     505       (61 )     444       406  
     
Consolidated net income
     3,463       308       3,771       3,003  
     
Group share
     3,376       307       3,683       2,919  
Minority interests and dividends on subsidiaries’ redeemable preferred shares
     87       1       88       84