EX-99.8 9 y01478exv99w8.htm EX 99.8: 2ND QUARTER AND 1ST HALF 2006 RESULTS exv99w8
 

     (TOTAL LOGO)
     Exhibit 99.8
TOTAL
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
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 6 062 233 950 euros
542 051 180 R.C.S. Nanterre
www.total.com
(News Release)
Total reports second quarter and first half 2006 results
Main results

         
• Second quarter 2006 adjusted net income1-2
  3.36 billion euros   +16%
 
  4.23 billion dollars3   +16%
 
  1.45 euros per share   +18%
 
  1.82 dollars per share   +18%
• First half 2006 adjusted net income4
  6.74 billion euros   +16%
 
  8.28 billion dollars   +11%
 
  2.89 euros per share   +18%
 
  3.56 dollars per share   +13%
Recent highlights

•   Continued exploration success
  •   Positive results in Algeria, Cameroon, the US Gulf of Mexico, Congo, Libya and Nigeria
 
  •   New acreage in Australia, Nigeria and Indonesia
•   Entry into the Brass LNG project to accelerate the valorization of the Group’s natural gas resources in Nigeria
•   Signature of 5.2 million tons per year of LNG purchase contracts with Qatargas 2 confirms Total’s participation in the project
•   Agreement with Saudi Aramco to build and operate a refinery processing heavy crude at Jubail in Saudi Arabia
•   Start-up of the Normandy DHC project initiated
•   Successful spin-off of Arkema
•   Agreement with Santander to implement arbitration award provisions concerning Cepsa
 
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 second quarter 2005
 
3   dollar amounts represent euro amounts converted at the average €/$ exchange rate for the period (1.2582 $/€ in the second quarter 2006, 1.2594 $/€ in the second quarter 2005, 1.2023 $/€ in the first quarter 2006, 1.2296 $/€ in the first half 2006 and 1.2847 $/€ in the first half 2005)
 
4   percent changes are relative to the first half 2005


 

 







TOTAL
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
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 6 062 233 950 euros
542 051 180 R.C.S. Nanterre
www.total.com
Paris, August 3, 2006 -— Total’s adjusted net income rose to 3,361 million euros (M€) in the second quarter 2006, an increase of 16% compared to the second quarter 2005. Commenting on the results, Chairman and CEO Thierry Desmarest said:
« The petroleum industry continued to benefit from favorable market conditions in the second quarter 2006. Oil prices have continued to rise, driven by sustained demand and persistent pressure on production capacity. Refining margins recovered, reflecting mainly the strength of gasoline demand in the US. However, the environment for the petrochemicals remained difficult due to an increase in raw material prices.
In the first half of 2006, Total’s adjusted net income rose to 8.3 billion dollars, an increase of 11% compared to the first half of 2005, and the profitability of the Group rose to 29% over the past twelve months. This performance was achieved despite a decrease in hydrocarbon production that was essentially due to the price effect on entitlement volumes, disruptions in Nigeria and increased shutdowns for maintenance operations. The upcoming start up of new fields, particularly the Dalia field in Angola later this year, sets the stage for a return to production growth, which will then accelerate in 2007.
In addition to the continued success in exploration, new milestone events, such as Total’s entry into Brass LNG in Nigeria and the partnership with Saudi Aramco to build a refinery in Jubail, have added to our confidence about the outlook for long-term growth. Also, the spin-off of Arkema, which was achieved according to plan, allowed us to rebalance the Group’s Chemicals segment and represented an additional and significant return of value for our shareholders.»
l Key figures from the consolidated accounts of Total 5
Under IFRS rules for discontinued operations, the historical statements of income, with the exception of net income, have been restated to exclude the contribution of Arkema. The impact of the restatement is summarized on page 17.
                                                         
                        2Q06                       1H06
                        vs   in millions of euros,                   vs
2Q06   1Q06   2Q05   2Q05   except earnings per share and number of shares   1H06   1H05   1H05
 
  40,909       38,103       31,609       +29 %  
Sales
     79,012       61,987       +27 %
  6,672       6,688       5,448       +22 %  
Adjusted operating income from business segments
     13,360       10,812       +24 %
  3,369       3,240       2,836       +19 %  
Adjusted net operating income from business segments
     6,609       5,651       +17 %
 
  2,391       2,400       1,887       +27 %  
• Upstream
     4,791       3,695       +30 %
  787       650       733       +7 %  
• Downstream
     1,437       1,411       +2 %
  191       190       216       -12 %  
• Chemicals
     381       545       -30 %
  3,361       3,376       2,906       +16 %  
Adjusted net income
     6,737       5,825       +16 %
  1.45       1.45       1.23       +18 %  
Adjusted fully-diluted earnings per share (euros)6
     2.89       2.45       +18 %
  2,323.0       2,335.8       2,364.4       -2 %  
Fully-diluted weighted-average shares (millions)6
     2,329.4       2,374.5       -2 %
  3,441       3,683       3,079       +12 %  
Net income (Group share)
     7,124       6,287       +13 %
  2,779       2,750       2,255       +23 %  
Investments
     5,529       4,039       +37 %
  624       397       377       +66 %  
Divestments (at selling price)
     1,021       590       +73 %
  4,046       4,839       2,697       +50 %  
Cash flow from operations
     8,885       6,734       +32 %
  4,678       4,287       4,546       +3 %  
Adjusted cash flow from operations
     8,965       8,793       +2 %
 
5   adjusted 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 14
 
6   adjusted retroactively to take into account the 4-for-1 stock split completed on May 18, 2006


2

 







TOTAL
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
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 6 062 233 950 euros
542 051 180 R.C.S. Nanterre
www.total.com
l Second quarter 2006 results
     > Operating income
In the second quarter 2006, the average Brent oil price rose to 69.6 $/b, an increase of 35% compared to the second quarter 2005 and 13% compared to the first quarter 2006. The TRCV European refining margin indicator was 38.3 $/t on average for the quarter, a decrease of 15% compared to the second quarter 2005 but an increase of 48% compared to the first quarter 2006. Petrochemical margins in the Atlantic Basin were at a level comparable to the first quarter 2006 and to the second quarter 2005. However, in Asia margins moved lower. The euro/dollar exchange rate was 1.26 $/€ in the second quarter 2006, compared to 1.26 $/€ in the second quarter 2005 and 1.20 $/€ in the first quarter 2006.
In this context, the adjusted operating income from the business segments increased by 22% to 6,672 M€ in the second quarter 20067.
Adjusted net operating income from the business segments was 3,369 M€ compared to 2,836 M€ in the second quarter 2005, an increase of 19%.
     > Net income
Adjusted net income increased by 16% to 3,361 M€ in the second quarter 2006 from 2,906 M€ in the second quarter 20058. 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 276 M€ in the second quarter 2006 compared to a positive impact of 277 M€ in the second quarter 2005.
Special items had a negative impact on net income of 110 M€ in the second quarter 2006 and were composed mainly of exceptional charges in Chemicals and the equity share of special items recorded by Sanofi-Aventis. In the second quarter 2005, special items had a negative impact on net income of 51 M€ and were composed mainly of the equity share of special items recorded by Sanofi-Aventis.
The Group’s equity share of amortization of intangibles related to the Sanofi-Aventis merger had a negative impact on net income of 86 M€ in the second quarter 2006 and 53 M€ in the second quarter 2005.
Reported net income was 3,441 M€ compared to 3,079 M€ in the second quarter 2005.
The effective tax rate9 for the Group increased to 55% in the second quarter 2006 from 53% in the second quarter 2005, mainly due to the proportionately higher contribution to income from Upstream. The effective tax rate was 55% in the first quarter 2006.
In the second quarter 2006, the Group bought back 20 million of its shares10 for 1,004 M€.
Adjusted fully-diluted earnings per share, based on 2,323.0 million fully-diluted weighted-average shares, rose to 1.45 euros in the second quarter 2006 from 1.23 euros in the second 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.
 
7   special items affecting operating income in the second quarter 2006 included a charge of 50 M€ in the Chemicals segment ; in the second quarter 2005, special items included impairments of 11 M€
 
8   excluding the contribution of Arkema in the second quarter 2005 (43 M€), the increase of the second quarter 2006 adjusted net income was 17%
 
9   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)
 
10   share buybacks prior to the 4-for-1 stock split completed on May 18, 2006 have been multiplied by four


3

 







TOTAL
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
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 6 062 233 950 euros
542 051 180 R.C.S. Nanterre
www.total.com
     > Investments – divestments
Investments in the second quarter 2006 were 2,779 M€ compared to 2,255 M€ in the second quarter 2005. Expressed in dollars, investments increased by 23% to 3.5 billion.
Divestments in the second quarter 2006 were 624 M€ and included the sale of gas marketing assets in France as well as the reimbursement of carried investments on Akpo in Nigeria.
     > Cash flow
Cash flow from operations increased by 50% to 4,046 M€ in the second quarter 2006 from 2,697 M€ in the second quarter 2005.
Adjusted cash flow (cash flow from operations before changes in working capital at replacement cost) was 4,678 M€ in the second quarter 2006, an increase of 3% compared to the second quarter 2005. The lower increase compared to the adjusted net operating income is mainly due to effects related to the split between current and deferred taxes.
Net cash flow11 was 1,891 M€ compared to 819 M€ in the second quarter 2005.
 
11   net cash flow = cash flow from operations + divestments — investments


4

 







TOTAL
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
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 6 062 233 950 euros
542 051 180 R.C.S. Nanterre
www.total.com
l First half 2006 results
     > Operating income
Compared to the first half 2005, the oil market environment in the first half 2006 was marked by a sharp increase in oil prices (+32% for Brent to 65.7 $/b) and a decrease in refining margins (-17% for the TRCV European refining margin indicator to 32.0 $/t). The environment for the Chemicals segment was generally less favorable due to higher raw material prices.
The euro/dollar exchange rate was 1.23 $/€ compared to 1.28 $/€ in the first half 2005.
In this context, the adjusted operating income from the business segments increased to 13,360 M€, a 24% increase compared to the first half 2005.
Special items affecting operating income had a negative impact of 55 M€12 in the first half 2006 and 11 M€12 in the first half 2005.
Adjusted net operating income from the business segments increased by 17% to 6,609 M€ in the first half 2006 from 5,651 M€ in the first half 2005. 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 representing a larger proportion of the results in the first half 2006 compared to the first half 2005.
     > Net income
Adjusted net income increased by 16% to 6,737 M€ from 5,825 M€ in the first half 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 556 M€ in the first half 2006 and 773 M€ in the first half 2005. Special items had no impact on net income in the first half 2006 and had a negative impact of 176 M€ in first half 200512.
The Group’s equity share of amortization of intangibles related to the Sanofi-Aventis merger had a negative impact on net income of 169 M€ in the first half 2006 and 135 M€ in the first half 2005.
Reported net income was 7,124 M€ compared to 6,287 M€ in the first half 2005.
The effective tax rate for the Group was 55% in the first half 2006 and 52% in the first half 2005.
In the first half 2006, the Group bought back 42 million of its shares for 2,194 M€. As of June 30, 2006 there were 2,312.9 million shares compared to 2,333.7 million shares on March 31, 2006 and 2,357.2 million shares on June 30, 2005. In July 2006, the Group bought back 5.22 million shares13 for 267 M€.
Adjusted fully-diluted earnings per share, based on 2,329.4 million fully-diluted weighted-average shares, rose to 2.89 euros from 2.45 euros in the first half 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.
 
12   calculations detailed on page 14
 
13   including 2.30 million shares which are reserved for share grants as per decision of the Board on July 18, 2006


5

 







TOTAL
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
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 6 062 233 950 euros
542 051 180 R.C.S. Nanterre
www.total.com
     > Investments — divestments
Investments in the first half 2006 were 5,529 M€ compared to 4,039 M€ in the first half 2005. Expressed in dollars, investments increased by 31% to 6.8 billion.
Divestments in the first half 2006 were 1,021 M€ compared to 590 M€ in the first half 2005 and included the sale of Upstream assets in the US and in France as well as the reimbursement of carried investments on Akpo in Nigeria.
     > Cash flow
Cash flow from operations in the first half 2006 was 8,885 M€, an increase of 32% compared to the first half 2005.
Adjusted cash flow (cash flow from operations before changes in working capital at replacement cost) was 8,965 M€, an increase of 2%.
Net cash flow was 4,377 M€ compared to 3,285 M€ in the first half 2005.
The net-debt-to-equity ratio was 30% on June 30, 2006 compared to 26% on March 31, 2006 and 30% on June 30, 200514, in line with the target range of the Group.
 
14   calculations detailed on page 15


6

 







TOTAL
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
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 6 062 233 950 euros
542 051 180 R.C.S. Nanterre
www.total.com
l Analysis of segments results
Upstream
     > Environment – liquids and gas price realizations*
                                                         
                        2Q06                       1H06
                        vs                       vs
2Q06   1Q06   2Q05   2Q05       1H06   1H05   1H05
 
  69.6       61.8       51.6       +35 %  
Brent ($/b)
     65.7       49.6       +32 %
  66.2       58.8       48.0       +38 %  
Average liquids price ($/b)
     62.4       45.9       +36 %
  5.75       6.16       4.39       +31 %  
Average gas price ($/Mbtu)
     5.96       4.40       +35 %
 
*   consolidated subsidiaries, excluding fixed margin and buy-back contracts
Total’s average liquids price increased by more than the benchmark Brent price in both the second quarter and first half comparisons, mainly due to the lower price differential between light and heavy crude oil.
Total’s average gas price benefited in the first half from the lag effect but showed a decrease in the second quarter 2006 versus the first quarter 2006 due to lower spot prices in the North Sea.
Between the first half 2005 and the first half 2006, the gas price increased in all producing regions.
     > Production
                                                         
                        2Q06                       1H06
                        vs                       vs
2Q06   1Q06   2Q05   2Q05   Hydrocarbon production   1H06   1H05   1H05
 
  2,290       2,440       2,506       -9 %  
Combined production (kboe/d)
     2,364       2,534       -7 %
  1,466       1,560       1,630       -10 %  
• Liquids (kb/d)
     1,513       1,643       -8 %
  4,501       4,795       4,797       -6 %  
• Gas (Mcfd)
     4,647       4,870       -5 %
Hydrocarbon production was 2,290 thousand barrels of oil equivalent per day (kboe/d) in the second quarter 2006 compared to 2,506 kboe/d in the second quarter 2005, a decrease of 8.6%, which is due to the following items:
  •   -2.5% due to the price effect15,
 
  •   -1.5% due to divestments and other portfolio effects,
 
  •   -0.5% due to the remaining effects of hurricanes in the Gulf of Mexico,
 
  •   -2% due to disruptions in Nigeria,
 
  •   -2.5% due to maintenance programs (UK North Sea and Girassol in Angola)
Excluding these elements, the positive impact of new field start-ups more than offset normal declines and unscheduled maintenance in Norway.
Production decreased by 6.1% from the first quarter 2006 to the second quarter 2006, mainly due to higher maintenance (Angola, North Sea) which represented more than half of the decline. The price effect and a full-quarter impact of the disruptions in Nigeria and other portfolio effects account for the balance of the decrease.
 
15   impact of hydrocarbon prices on entitlement volumes from production sharing and buy-back contracts


7

 







TOTAL
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
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 6 062 233 950 euros
542 051 180 R.C.S. Nanterre
www.total.com
     > Results
                                                         
                        2Q06                       1H06
                        vs                       vs
2Q06   1Q06   2Q05   2Q05   In millions of euros   1H06   1H05   1H05
 
  5,376       5,601       4,212       +28 %  
Adjusted operating income*
     10,977       8,222       +34 %
  2,391       2,400       1,887       +27 %  
Adjusted net operating income*
     4,791       3,695       +30 %
  155       143       98       +58 %  
* Income from equity affiliates
     298       215       +39 %
  2,209       2,081       1,638       +35 %  
Investments
     4,290       3,001       +43 %
  502       353       262       +92 %  
Divestments at selling price
     855       390       +119 %
  3,371       3,831       2,731       +23 %  
Cash flow
     7,202       4,919       +46 %
 
*   detail of adjustment items shown in business segment information
Adjusted net operating income for the Upstream segment increased by 27% to 2,391 M€ in the second quarter 2006 from 1,887 M€ in the second quarter 2005.
This increase reflects the benefit of higher oil and gas prices, which was slightly offset by a decrease in production volumes and an increase in 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 second quarter 2006 from 59% in the second quarter 2005, essentially due to higher oil and gas prices. The rate remained stable in the first and second quarters of 2006.
Effective in the third quarter 2006, the UK will increase petroleum taxes retroactively to January 1, 2006, following the recent vote at the Parliament. In addition to the effect on third quarter operations, there will be a charge of approximately 150 M€ related to the first half of 2006, and there will be a special charge of approximately 100 M€ to adjust past deferred taxes.
The ongoing impact of the tax change on the Upstream segment will be an increase in the average tax rate in the range of 1.5%.
Adjusted net operating income for the Upstream segment increased by 30% to 4,791 M€ in the first half 2006 from 3,695 M€ in the first half 2005.
Expressed in dollars, adjusted net operating income for the Upstream segment increased by 1.1 B$. The positive impact of the improvement in the oil and gas environment, estimated at approximately 1.6 B$, was partially offset by negative impacts estimated at 0.2 B$ for lower volumes, 0.1 B$ for portfolio effects, and 0.2 B$ for other elements including higher costs.
The return on average capital employed (ROACE16) for the Upstream segment for the twelve months ended June 30, 2006 was 43% compared to 36% for the twelve months ended June 30, 2005 and 40% for the full year 2005.
 
16   calculated based on adjusted net operating income and average capital employed, using replacement cost, as shown on page 16


8

 







TOTAL
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
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 6 062 233 950 euros
542 051 180 R.C.S. Nanterre
www.total.com
Downstream
     > Refinery throughput
                                                         
                        2Q06                       1H06
                        vs                       vs
2Q06   1Q06   2Q05   2Q05   Refinery throughput (kb/d)   1H06   1H05   1H05
 
  2,432       2,421       2,219       +10 %  
Total refinery throughput*
     2,429       2,420       —  
  888       899       831       +7 %  
* France
     894       939       -5 %
  1,214       1,217       1,055       +15 %  
* Rest of Europe*
     1,216       1,152       +6 %
  330       305       333       -1 %  
* Rest of world
     319       329       -3 %
 
*   includes share of Cepsa
The refinery utilization rate was 86% in the second quarter 2006 compared to 82% in the second quarter 2005 and 86% in the first quarter 2006.
The second quarter 2005 utilization rate reflected a large program of turnarounds.
The utilization rate in the second quarter 2006 was affected by the completion of a turnaround at the Provence refinery.
     > Results
                                                         
                        2Q06                
                        vs   In millions of euros            
2Q06   1Q06   2Q05   2Q05   (except the TRCV refining margin index)   1H06   1H05   1H06 vs 1H05
 
                               
TRCV — European refining
                        
  38.3       25.8       45.0       -15 %  
margin indicator ($/t)
     32.0       38.4       -17 %
  1,036       856       944       +10 %  
Adjusted operating income *
     1,892       1,835       +3 %
  787       650       733       +7 %  
Adjusted net operating income *
     1,437       1,411       +2 %
  81       61 **     68       +19 %  
* Income from equity affiliates
     142       140       +1 %
                               
 
                        
  368       321       359       +3 %  
Investments
     689       576       +20 %
  50       13       58       -14 %  
Divestments at selling price
     63       103       -39 %
  984       1,201       (70 )   ns  
Cash flow
     2,185       1,619       +35 %
  1,087       831       976       +11 %  
Adjusted cash flow
     1,918       1,724       +11 %
 
*   detail of adjustment items shown in business segment information
 
**   disparity of (19) M€ compared to previous publication due to the inventory effect on Cepsa
Adjusted net operating income for the Downstream segment was 787 M€ compared to 733 M€ in the second quarter 2005, an increase of 7%.
The increase reflects the stronger refining environment in the US and the benefits of higher throughput and productivity programs, all of which was partially offset by a slightly less favorable refining environment in Europe.
Adjusted net operating income for the Downstream segment in the first half 2006 was 1,437 M€ compared to 1,411 M€ in the first half 2005, an increase of 2%.
Expressed in dollars, the adjusted net operating income for the Downstream segment was stable, with the impact of slightly less favorable market conditions being offset by the benefits of growth and productivity.
The ROACE for the Downstream segment for the twelve months ended June 30, 2006 was 28% compared to 30% for the twelve months ended June 30, 2005 and 28% for the full year 2005.


9

 









TOTAL
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
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 6 062 233 950 euros
542 051 180 R.C.S. Nanterre
www.total.com
Chemicals
     > Results
Under IFRS rules for discontinued operations, the historical statements on income, with the exception of net income, have been restated to exclude the contribution of Arkema. The impact of the restatement is summarized on page 17.
                                                         
                        2Q06                       1H06
                        vs                       vs
2Q06   1Q06   2Q05   2Q05   In millions of euros   1H06   1H05   1H05
 
  4,965       4,689       4,272       +16 %  
Sales
     9,654       8,429       +15 %
  3,122       2,863       2,615       +19 %  
• Base chemicals
     5,985       5,202       +15 %
  1,843       1,826       1,659       +11 %  
• Specialties
     3,669       3,227       +14 %
  260       231       292       -11 %  
Adjusted operating income*
     491       755       -35 %
  191       190       216       -12 %  
Adjusted net operating income*
     381       545       -30 %
  85       78       114       -25 %  
• Base chemicals
     163       368       -56 %
  109       103       103       +6 %  
• Specialties
     212       173       +23 %
  176       324       245       -28 %  
Investments
     500       403       +24 %
  67       28       8       x8,4    
Divestments at selling price
     95       30       +217 %
  (7 )     (37 )     205     ns  
Cash flow
     (44 )     287     ns  
  255       305       350       -27 %  
Adjusted cash flow
     560       894       -37 %
 
*   detail of adjustment items shown in business segment information
Sales for the Chemicals segment increased by 16% to 4,965 M€ in the second quarter 2006 from 4,272 M€ in the second quarter 2005.
Adjusted net operating income for the Chemicals segment was 191 M€, a decrease of 12% compared to the second quarter 2005.
In a context of high raw material prices, petrochemical margins were comparable to the level of the second quarter 2005 in the Atlantic basin, but margins were substantially lower in Asia. In addition, maintenance on crackers in the Atlantic basin reduced the utilization rate.
Specialties continue to benefit from global economic growth and show a significant increase in their results.
Adjusted net operating income for the Chemicals segment in the first half 2006 was 381 M€ compared to 545 M€ in the first half 2005, a decrease of 30%.
Expressed in dollars, the adjusted net operating income for the Chemicals segment decreased by 0.2 B$, mainly due to the impact of lower petrochemical margins.
After restating historical figures to exclude the contribution of Arkema17, the ROACE for the Chemicals segment for the twelve months ended June 30, 2006 was 11% compared to 15% for the twelve months ended June 30, 2005 and 15% for the full year 2005.
 
17   see reconciliation tables on page 17


10

 






TOTAL
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
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 6 062 233 950 euros
542 051 180 R.C.S. Nanterre
www.total.com
l Cancellation of outstanding shares
The Board of Directors met on July 18, 2006 and approved the cancellation of 47,020,000 shares. The share capital has been adjusted to 6,062,233,950 euros represented by 2,424,893,580 shares with a par value of 2.5 €.
l Total S.A. accounts
The parent company, Total S.A., reported net income of 2,593 M€ in the first half 2006 compared to 2,444 M€ in the first half 2005.
l Summary and Outlook
For the twelve months ended June 30, 2006, the ROACE was 29% at the Group level and 33% at the level of the business segments compared to 28% and 30% respectively for the twelve months ended June 30, 200518.
The return on equity for the twelve months ended June 30, 2006 was 36%.
In line with its objectives, the Group maintains its net-debt-to-equity ratio around 25% to 30%.
Since the beginning of the third quarter 2006, oil prices have remained at very high levels and refining margins settled close to the level of the first half 2006.
The outlook for sustained growth in the coming years and over the longer term has been strengthened by projects under development which are progressing as planned, continued exploration success and the favorable pace of negotiations to gain access to new major projects.
¨ ¨ ¨
To listen to the conference call with CFO Robert Castaigne and financial analysts today at 15:30 (Paris time), 14:30 (UK time) please call +44 (0)207 162 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 : 705 990).
The June 30, 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 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.
 
18   recalculated after restating historical figures to exclude the contribution of Arkema ; see reconciliation tables on page 17


11

 

Operating information by segment
Second quarter and first half 2006

TOTAL
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
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 6 062 233 950 euros
542 051 180 R.C.S. Nanterre
www.total.com
l Upstream
                                                         
                        2Q06                       1H06
                        vs   Combined liquids and gas production                   vs
2Q06   1Q06   2Q05   2Q05   by region (kboe/d)   1H06   1H05   1H05
 
  708       778       793       -11 %  
Europe
     743       812       -8 %
  692       742       790       -12 %  
Africa
     717       797       -10 %
  7       13       57       -88 %  
North America
     10       47       -79 %
  250       253       234       +7 %  
Far East
     251       245       +2 %
  402       411       380       +6 %  
Middle East
     406       387       +5 %
  225       236       243       -7 %  
South America
     230       237       -3 %
  6       7       9       -33 %  
Rest of world
     7       9       -22 %
 
  2,290       2,440       2,506       -9 %  
Total production
     2,364       2,534       -7 %
                                                         
                        2Q06                       1H06
                        vs                       vs
2Q06   1Q06   2Q05   2Q05   Liquids production by region (kb/d)   1H06   1H05   1H05
 
  358       378       397       -10 %  
Europe
     368       406       -9 %
  604       656       706       -14 %  
Africa
     630       714       -12 %
  1       2       16       -94 %  
North America
     1       11       -91 %
  29       29       29       —    
Far East
     29       29       —  
  350       357       332       +5 %  
Middle East
     354       335       +6 %
  118       131       141       -16 %  
South America
     124       140       -11 %
  6       7       9       -33 %  
Rest of world
     7       8       -13 %
 
  1,466       1,560       1,630       -10 %  
Total production
     1,513       1,643       -8 %


12

 









TOTAL
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
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 6 062 233 950 euros
542 051 180 R.C.S. Nanterre
www.total.com
                                                         
                        2Q06                       1H06
                        vs                       vs
2Q06   1Q06   2Q05   2Q05   Gas production by region (Mcfd)   1H06   1H05   1H05
 
  1,900       2,172       2,154       -12 %  
Europe
     2,035       2,206       -8 %
  469       457       451       +4 %  
Africa
     463       451       +3 %
  31       63       218       -86 %  
North America
     47       191       -75 %
  1,231       1,238       1,145       +8 %  
Far East
     1,235       1,200       +3 %
  279       284       256       +9 %  
Middle East
     281       276       +2 %
  589       579       571       +3 %  
South America
     584       544       +7 %
  2       2       2       —    
Rest of world
     2       2       —  
 
  4,501       4,795       4,797       -6 %  
Total production
     4,647       4,870       -5 %
l Downstream
                                                         
                        2Q06                       1H06
                        vs                       vs
2Q06   1Q06   2Q05   2Q05   Refined product sales by region (kb/d)*   1H06   1H05   1H05
 
  2,658       2,689       2,412       +10 %  
Europe
     2,674       2,605       +3 %
  318       319       339       -6 %  
Africa
     318       329       -3 %
  603       626       612       -1 %  
Americas
     614       601       +2 %
  198       230       258       -23 %  
Rest of world
     214       240       -11 %
 
  3,777       3,864       3,621       +4 %  
Total
     3,820       3,774       +1 %
 
*   includes trading and equity share of Cepsa


13

 

Adjustment items







TOTAL
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
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 6 062 233 950 euros
542 051 180 R.C.S. Nanterre
www.total.com
l Adjustments to operating income from business segments
                                         
2Q06   1Q06   2Q05   in millions of euros   1H06   1H05
 
  (50 )     (5 )     (11 )  
Special items affecting operating income from business segments
     (55 )     (11 )
 
  (23 )     —       —    
• Restructuring charges
     (23 )     —  
  —       —       (11 )  
• Impairments
     —       (11 )
  (27 )     (5 )     —    
• Other
     (32 )     —  
  383       373       391    
Pre-tax inventory effect : FIFO vs. replacement cost
     756       1,113  
  333       368       380    
Total adjustments affecting operating income from business segments
     701       1,102  
l Adjustments to net income (Group share)
                                         
2Q06   1Q06   2Q05   in millions of euros   1H06   1H05
 
  (110 )     110       (51 )  
Special items affecting net income (Group share)
     —       (176 )
 
  (35 )     2       (36 )  
• Equity share of special items recorded by Sanofi-Aventis
     (33 )     (78 )
  —       130       —    
• Gain on asset sales
     130       —  
  (44 )     (15 )     (7 )  
• Restructuring charges
     (59 )     (90 )
  —       —       (8 )  
• Impairments
     —       (8 )
  (31 )     (7 )     —    
• Other
     (38 )     —  
  (86 )     (83 )     (53 )  
Adjustment related to the Sanofi-Aventis merger* (share of amortization of intangible assets)
     (169 )     (135 )
  276       280       277    
After-tax inventory effect : FIFO vs. replacement cost
     556       773  
  80       307       173    
Total adjustments to net income
     387       462  
 
*   based on 13% participation in Sanofi-Aventis at 6/30/2005, 3/31/2006 and 6/30/2006


14

 

Net-debt-to-equity ratio





TOTAL
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
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 6 062 233 950 euros
542 051 180 R.C.S. Nanterre
www.total.com
                         
in millions of euros   6/30/2006   3/31/2006   6/30/2005
 
Current borrowings
     13,707       12,618       13,805  
Net current financial instruments
     45       (95 )     (883 )
Non-current financial debt
     13,256       13,491       12,392  
Hedging instruments of non-current debt
     (588 )     (453 )     (907 )
Cash and cash equivalents
     (14,602 )     (14,816 )     (13,577 )
 
Net debt
     11,818       10,745       10,830  
 
Shareholders equity
     40,272       43,170       36,609  
Accrued dividend payable based on shares at the close of the period*
     (1,860 )     (2,941 )     (1,582 )
Minority interests
     783       913       708  
Equity
     39,195       41,142       35,735  
 
Net-debt-to-equity ratio
     30.2 %     26.1 %     30.3 %
 
*   As of June 30, 2006, this represents a distribution of a dividend of 1.62 €/share for each 2.5 € par value share
2006 Sensitivities*
                                 
                    Impact on operating   Impact on net
    Scenario   Change   income (e)   operating income (e)
 
€/$
       1.20 $/€       +0.1 €per $     +1.6 B€       +0.8 B€
Brent
     40-50 $/b     +1 $/b   +0.41 B€     +0.17 B€
TRCV – European refining margin indicator
        25 $/t     +1  $/t   +   0.09 B€   +   0.06 B€
 
*   sensitivities revised once per year upon publication of the previous year fourth quarter results


15

 

Return on average capital employed




TOTAL
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
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 6 062 233 950 euros
542 051 180 R.C.S. Nanterre
www.total.com
l For the 12 months ended June 30, 2006
                                         
in millions of euros   Upstream   Downstream   Chemicals**   Segments   Group
 
Adjusted net operating income
     9,125       2,942       803       12,870       13,603  
Capital employed at June 30, 2005*
     19,595       9,934       6,978       36,507       43,539  
Capital employed at June 30, 2006*
     23,139       11,335       7,147       41,601       49,798  
ROACE
     42.7 %     27.7 %     11.4 %     33.0 %     29.1 %
 
*   at replacement cost (excluding after-tax inventory effect)
 
**   capital employed for Chemicals reduced by 2,321 M€ for Arkema at June 30, 2005 and for the Toulouse-AZF provision of 59 M€ pre-tax at June 30, 2005 and 113 M€ pre-tax at June 30, 2006
l For the 12 months ended June 30, 2005
                                         
in millions of euros   Upstream   Downstream   Chemicals **   Segments   Group
 
Adjusted net operating income
     6,639       2,773       1,026       10,438       11,150  
Capital employed at June 30, 2004*
     17,478       8,590       6,866       32,934       37,456  
Capital employed at June 30, 2005*
     19,595       9,934       6,978       36,507       43,539  
ROACE
     35.8 %     29.9 %     14.8 %     30.1 %     27.5 %
 
*   at replacement cost (excluding after-tax inventory effect)
 
**   capital employed for Chemicals reduced by 2,457 M€ for Arkema at June 30, 2004 and 2,321 M€ at June 30, 2005 and for the Toulouse-AZF provision of 204 M€ pre-tax at June 30, 2004 and 59 M€ pre-tax at June 30, 2005
l For the full year 2005
                                         
in millions of euros   Upstream   Downstream   Chemicals**   Segments   Group
 
Adjusted net operating income
     8,029       2,916       967       11,912       12,586  
Capital employed at December 31, 2004*
     16,280       9,654       6,205       32,139       38,314  
Capital employed at December 31, 2005*
     23,522       11,421       6,885       41,828       49,341  
ROACE
     40.3 %     27.7 %     14.8 %     32.2 %     28.7 %
 
*   at replacement cost (excluding after-tax inventory effect)
 
**   capital employed for Chemicals reduced by 2,058 M€ for Arkema at December 31, 2004 and 2,235 M€ at December 31, 2005 and for the Toulouse-AZF provision of 110 M€ pre-tax at December 31, 2004 and 133 M€ pre-tax at December 31, 2005


16

 

Presentation of historical accounts and
profitability excluding Arkema







TOTAL
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
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 6 062 233 950 euros
542 051 180 R.C.S. Nanterre
www.total.com
Sales — Group
                                 
In M€   1Q06   2Q05   3Q05   4Q05
 
Published data
     39,605       33,073       38,414       39,942  
Arkema impact
     (1,502 )     (1,464 )     (1,358 )     (1,377 )
New data
     38,103       31,609       37,056       38,565  
Sales — Chemicals
                                 
In M€   1Q06   2Q05   3Q05   4Q05
 
Published data
     6,191       5,736       5,401       5,671  
Arkema impact
     (1,502 )     (1,464 )     (1,358 )     (1,377 )
New data
     4,689       4,272       4,043       4,294  
Adjusted operating income
Business segments
                                 
In M€   1Q06   2Q05   3Q05   4Q05
 
Published data
     6,767       5,537       6,346       6,330  
Arkema impact
     (79 )     (89 )     (58 )     34  
New data
     6,688       5,448       6,288       6,364  
Adjusted operating income
Chemicals
                                 
In M€   1Q06   2Q05   3Q05   4Q05
 
Published data
     310       381       166       247  
Arkema impact
     (79 )     (89 )     (58 )     34  
New data
     231       292       108       281  
Adjusted net operating income
Business segments
                                 
In M€   1Q06   2Q05   3Q05   4Q05
 
Published data
     3,269       2,886       3,044       3,095  
Arkema impact
     (29 )     (50 )     (36 )     158  
New data
     3,240       2,836       3,008       3,253  
Adjusted net operating income
Chemicals
                                 
In M€   1Q06   2Q05   3Q05   4Q05
 
Published data
     219       266       136       164  
Arkema impact
     (29 )     (50 )     (36 )     158  
New data
     190       216       100       322  
ROACE — business segments*
                                 
    1Q06   2Q05   3Q05   4Q05
 
Published data
     30.9 %     28.5 %     29.8 %     30.4 %
Arkema impact
     +2 %     +1.6 %     +1.5 %     +1.8 %
New data
     32.9 %     30.1 %     31.3 %     32.2 %
ROACE — Chemicals*
                                 
    1Q06   2Q05   3Q05   4Q05
 
Published data
     8.5 %     12.6 %     12.0 %     11.0 %
Arkema impact
     +3.5 %     +2.2 %     +1.5 %     +3.8 %
New data
     12.0 %     14.8 %     13.5 %     14.8 %
 
*   ROACE calculated on based on rolling twelve months at end of quarter
ROACE — Group*
                                 
    1Q06   2Q05   3Q05   4Q05
 
Published data
     27.7 %     26.3 %     27.8 %     27.4 %
Arkema impact
     +1.5 %     +1.2 %     +1.2 %     +1.3 %
New data
     29.2 %     27.5 %     29.0 %     28.7 %
 
*   ROACE calculated on based on rolling twelve months at end of quarter
ROACE — Group*

17

 

CONSOLIDATED STATEMENT OF INCOME
TOTAL
(unaudited)
                         
    2nd quarter     1st quarter     2nd quarter  
Amounts in millions of euros (1)   2006     2006     2005  
 
Sales
     40,909       38,103       31,609  
Excise taxes
     (5,141 )     (4,607 )     (5,246 )
Revenues from sales
     35,768       33,496       26,363  
 
                        
Purchases, net of inventory variation
     (22,387 )     (20,442 )     (14,314 )
Other operating expenses
     (5,172 )     (4,750 )     (4,975 )
Unsuccessful exploration costs
     (146 )     (115 )     (92 )
Depreciation, depletion, and amortization of tangible assets and leasehold rights
     (1,212 )     (1,231 )     (1,254 )
 
 
                        
Operating income
                        
Corporate
     (154 )     (98 )     (100 )
Business segments *
     7,005       7,056       5,828  
 
Total operating income
     6,851       6,958       5,728  
 
 
                        
Other income
     72       261       81  
Other expense
     (158 )     (85 )     (27 )
 
                        
Financial interest on debt
     (387 )     (328 )     (286 )
Financial income from marketable securities and cash equivalents
     340       271       214  
Cost of net debt
     (47 )     (57 )     (72 )
 
                        
Other financial income
     201       106       113  
Other financial expense
     (69 )     (51 )     (55 )
Income taxes
     (3,644 )     (3,813 )     (2,966 )
Equity in income (loss) of affiliates
     376       444       321  
 
Consolidated net income from continuing operations (Group without Arkema)
     3,582       3,763       3,123  
 
Consolidated net income from discontinued operations (Arkema)
     —       8       37  
 
Consolidated net income
     3,582       3,771       3,160  
 
Group share **
     3,441       3,683       3,079  
Minority interests and dividends on subsidiaries’ redeemable preferred shares
     141       88       81  
 
Earnings per share (euros)
     1.49       1.59       1.31  
 
Fully-diluted earnings per share (euros) ***
     1.48       1.58       1.30  
 
 
                        
* Adjusted operating income from business segments
     6,672       6,688       5,448  
Adjusted net operating income from business segments
     3,369       3,240       2,836  
** Adjusted net income
     3,361       3,376       2,906  
*** Adjusted fully-diluted earnings per share (euros)
     1.45       1.45       1.23  
(1)   Except for earnings per share

 

 

CONSOLIDATED STATEMENT OF INCOME
TOTAL
(unaudited)
                 
    1st half     1st half  
Amounts in millions of euros (1)   2006     2005  
 
Sales
     79,012       61,987  
Excise taxes
     (9,748 )     (10,297 )
Revenues from sales
     69,264       51,690  
 
                
Purchases, net of inventory variation
     (42,829 )     (28,683 )
Other operating expenses
     (9,922 )     (8,703 )
Unsuccessful exploration costs
     (261 )     (164 )
Depreciation, depletion, and amortization of tangible assets and leasehold rights
     (2,443 )     (2,391 )
 
 
                
Operating income
                
Corporate
     (252 )     (165 )
Business segments *
     14,061       11,914  
 
Total operating income
     13,809       11,749  
 
 
                
Other income
     333       85  
Other expense
     (243 )     (77 )
 
                
Financial interest on debt
     (715 )     (530 )
Financial income from marketable securities and cash equivalents
     611       396  
Cost of net debt
     (104 )     (134 )
 
Other financial income
     307       199  
Other financial expense
     (120 )     (118 )
Income taxes
     (7,457 )     (5,872 )
Equity in income (loss) of affiliates
     820       610  
 
Consolidated net income from continuing operations (Group without Arkema)
     7,345       6,442  
 
Consolidated net income from discontinued operations (Arkema)
     8       11  
 
Consolidated net income
     7,353       6,453  
 
Group share **
     7,124       6,287  
Minority interests and dividends on subsidiaries’ redeemable preferred shares
     229       166  
 
Earnings per share (euros)
     3.08       2.66  
 
Fully-diluted earnings per share (euros) ***
     3.06       2.64  
 
 
                
* Adjusted operating income from business segments
     13,360       10,812  
Adjusted net operating income from business segments
     6,609       5,651  
** Adjusted net income
     6,737       5,825  
*** Adjusted fully-diluted earnings per share (euros)
     2.89       2.45  
(1)   Except for earnings per share

 

 

CONSOLIDATED BALANCE SHEET
TOTAL
                                 
    Amounts in millions of euros  
    June 30,     March 31,         June 30,  
    2006     2006     December     2005  
    (unaudited)     (unaudited)     31, 2005     (unaudited)  
 
ASSETS
                                
 
                                
NON-CURRENT ASSETS
                                
Intangible assets, net
     4,658       4,836       4,384       3,319  
Property, plant and equipment, net
     38,920       40,244       40,568       38,290  
Equity affiliates : investments and loans
     12,702       13,059       12,652       11,927  
Other investments
     1,656       1,689       1,516       1,212  
Hedging instruments of non-current financial debt
     588       453       477       907  
Other non-current assets
     2,186       3,180       2,794       2,056  
 
Total non-current assets
     60,710       63,461       62,391       57,711  
 
 
                                
CURRENT ASSETS
                                
Inventories, net
     12,215       12,672       12,690       11,499  
Accounts receivable, net
     17,715       19,642       19,612       17,250  
Prepaid expenses and other current assets
     6,632       6,969       6,799       5,542  
Current financial instruments
     159       204       334       942  
Cash and cash equivalents
     14,602       14,816       4,318       13,577  
 
Total current assets
     51,323       54,303       43,753       48,810  
 
TOTAL ASSETS
     112,033       117,764       106,144       106,521  
 
 
                                
LIABILITIES & SHAREHOLDERS’ EQUITY
                                
 
                                
SHAREHOLDERS’ EQUITY
                                
Common shares
     6,179       6,179       6,151       6,359  
Paid-in surplus and retained earnings
     41,279       41,809       37,504       36,397  
Cumulative translation adjustment
     (650 )     744       1,421       920  
Treasury shares
     (6,536 )     (5,562 )     (4,431 )     (7,067 )
 
SHAREHOLDERS’ EQUITY — GROUP SHARE
     40,272       43,170       40,645       36,609  
 
Minority interests and subsidiaries’ redeemable preferred shares
     783       913       838       708  
 
TOTAL SHAREHOLDERS’ EQUITY
     41,055       44,083       41,483       37,317  
 
 
                                
NON-CURRENT LIABILITIES
                                
Deferred income taxes
     6,909       7,228       6,976       7,485  
Employee benefits
     2,976       3,269       3,413       3,609  
Other non-current liabilities
     6,187       7,030       7,051       6,626  
 
Total non-current liabilities
     16,072       17,527       17,440       17,720  
 
Non-current financial debt
     13,256       13,491       13,793       12,392  
 
 
                                
CURRENT LIABILITIES
                                
Accounts payable
     14,149       15,559       16,406       12,721  
Other creditors and accrued liabilities
     13,590       14,377       13,069       12,507  
Current borrowings
     13,707       12,618       3,920       13,805  
Current financial instruments
     204       109       33       59  
 
Total current liabilities
     41,650       42,663       33,428       39,092  
 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
     112,033       117,764       106,144       106,521  
 
The comparative balance sheets until March 31st, 2006 include the sub-group Arkema which was spun-off on May 12, 2006.

 

 

CONSOLIDATED STATEMENT OF CASH FLOWS
TOTAL
(unaudited)
                         
    2nd quarter     1st quarter     2nd quarter  
Amounts in millions of euros   2006     2006     2005  
 
CASH FLOW FROM OPERATING ACTIVITIES
                        
 
                        
Consolidated net income
     3,582       3,771       3,160  
Depreciation, depletion and amortization
     1,253       1,329       1,357  
Non-current liabilities, valuation allowances and deferred taxes
     83       94       315  
Impact of coverage of pension benefit plans
     (37 )     —       —  
Unsuccessful exploration costs
     146       115       92  
(Gains) Losses on sales of assets
     (72 )     (261 )     (38 )
Undistributed affiliates equity earnings
     111       (375 )     19  
(Increase) Decrease in operating assets and liabilities
     (1,015 )     179       (2,240 )
Other changes, net
     (5 )     (13 )     32  
 
CASH FLOW FROM OPERATING ACTIVITIES
     4,046       4,839       2,697  
 
 
                        
CASH FLOW USED IN INVESTING ACTIVITIES
                        
 
                        
Intangible assets and property, plant and equipment additions
     (2,288 )     (2,051 )     (1,983 )
Exploration costs charged directly to expense
     (145 )     (110 )     (68 )
Acquisitions of subsidiaries, net of cash acquired
     (11 )     (69 )     —  
Investments in equity affiliates and other securities
     (64 )     (59 )     (57 )
Increase in non-current loans
     (271 )     (461 )     (147 )
 
Total expenditures
     (2,779 )     (2,750 )     (2,255 )
Proceeds from sale of intangible assets and property, plant and equipment
     49       260       180  
Proceeds from sale of subsidiaries, net of cash sold
     —       —       —  
Proceeds from sale of non-current investments
     86       3       38  
Repayment of non-current loans
     489       134       159  
 
Total divestitures
     624       397       377  
 
CASH FLOW USED IN INVESTING ACTIVITIES
     (2,155 )     (2,353 )     (1,878 )
 
 
                        
CASH FLOW FROM FINANCING ACTIVITIES
                        
 
                        
Issuance (repayment) of shares:
                        
Parent company’s shareholders
     7       471       —  
Treasury shares
     (968 )     (1,118 )     (1,211 )
Minority shareholders
     1       12       9  
Subsidiaries’ redeemable preferred shares
     —       —       (118 )
Cash dividends paid:
                        
- Parent company’s shareholders
     (2,012 )     (10 )     (1,764 )
- Minority shareholders
     (224 )     (6 )     (124 )
Net issuance (repayment) of non-current debt
     395       730       349  
Increase (Decrease) in current borrowings
     1,369       8,204       2,240  
Other changes, net
     —       —       —  
 
CASH FLOW FROM FINANCING ACTIVITIES
     (1,432 )     8,283       (619 )
 
Net increase (decrease) in cash and cash equivalents
     459       10,769       200  
Effect of exchange rates and changes in reporting entity
     (673 )     (271 )     829  
Cash and cash equivalents at the beginning of the period
     14,816       4,318       12,548  
 
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD
     14,602       14,816       13,577  
 
First quarter 2006 and second quarter 2005 cash flow statements include the sub-group Arkema which was spun-off on May 12, 2006.

 

 

CONSOLIDATED STATEMENT OF CASH FLOWS
TOTAL
(unaudited)
                 
    1st half     1st half  
Amounts in millions of euros   2006     2005  
 
CASH FLOW FROM OPERATING ACTIVITIES
                
 
                
Consolidated net income
     7,353       6,453  
Depreciation, depletion and amortization
     2,582       2,600  
Non-current liabilities, valuation allowances and deferred taxes
     177       864  
Impact of coverage of pension benefit plans
     (37 )     —  
Unsuccessful exploration costs
     261       164  
(Gains) Losses on sales of assets
     (333 )     (42 )
Undistributed affiliates equity earnings
     (264 )     (176 )
(Increase) Decrease in operating assets and liabilities
     (836 )     (3,172 )
Other changes, net
     (18 )     43  
 
CASH FLOW FROM OPERATING ACTIVITIES
     8,885       6,734  
 
 
                
CASH FLOW USED IN INVESTING ACTIVITIES
                
 
                
Intangible assets and property, plant and equipment additions
     (4,339 )     (3,496 )
Exploration costs charged directly to expense
     (255 )     (139 )
Acquisitions of subsidiaries, net of cash acquired
     (80 )     —  
Investments in equity affiliates and other securities
     (123 )     (72 )
Increase in non-current loans
     (732 )     (332 )
 
Total expenditures
     (5,529 )     (4,039 )
Proceeds from sale of intangible assets and property, plant and equipment
     309       194  
Proceeds from sale of subsidiaries, net of cash sold
     —       11  
Proceeds from sale of non-current investments
     89       43  
Repayment of non-current loans
     623       342  
 
Total divestitures
     1,021       590  
 
CASH FLOW USED IN INVESTING ACTIVITIES
     (4,508 )     (3,449 )
 
 
                
CASH FLOW FROM FINANCING ACTIVITIES
                
 
                
Issuance (repayment) of shares:
                
Parent company’s shareholders
     478       —  
Treasury shares
     (2,086 )     (2,019 )
Minority shareholders
     13       71  
Subsidiaries’ redeemable preferred shares
     —       (156 )
Cash dividends paid:
                
- Parent company’s shareholders
     (2,022 )     (1,765 )
- Minority shareholders
     (230 )     (152 )
Net issuance (repayment) of non-current debt
     1,125       1,038  
Increase (Decrease) in current borrowings
     9,573       8,192  
Other changes, net
     —       (1 )
 
CASH FLOW FROM FINANCING ACTIVITIES
     6,851       5,208  
 
Net increase/(decrease) in cash and cash equivalents
     11,228       8,493  
Effect of exchange rates and changes in reporting entity
     (944 )     1,224  
Cash and cash equivalents at the beginning of the period
     4,318       3,860  
 
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD
     14,602       13,577  
 
First half 2005 cash flow statement include the sub-group Arkema which was spun-off on May 12, 2006

 

 

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
TOTAL
                                                                                 
                    Paid-in                                     Subsidiaries’              
                    surplus and     Cumulative                     Shareholders’     redeemable              
    Common shares issued     retained     translation     Treasury shares     equity Group     preferred     Minority     Total  
(Amounts in millions of euros)   Number     Amount     earnings     adjustment     Number     Amount     share     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 half
     —       —       6,287       —       —       —       6,287       1       165       6,453  
Items recognized directly in equity
     —       —       37       2,349       —       —       2,386       8       32       2,426  
 
Total excluding transactions with shareholders
     —       —       6,324       2,349       —       —       8,673       9       197       8,879  
 
Cash dividend
     —       —       (1,765 )     —       —       —       (1,765 )     —       (152 )     (1,917 )
Issuance of common shares
     926,095       9       63       —       —       —       72       —       —       72  
Purchase of treasury shares
     —       —       —       —       (11,720,000 )     (2,101 )     (2,101 )     —       —       (2,101 )
Sale of treasury shares (1)
     —       —       12       —       676,707       64       76       —       —       76  
Repayment of subsidiaries’ redeemable preferred shares
     —       —       —       —       —       —       —       (156 )     —       (156 )
Share-based payments
     —       —       46       —       —       —       46       —       —       46  
Transactions with shareholders
     926,095       9       (1,644 )     —       (11,043,293 )     (2,037 )     (3,672 )     (156 )     (152 )     (3,980 )
Cancellation of repurchased shares
     —       —       —       —       —       —       —       —       —       —  
 
As of June 30, 2005
     635,941,203       6,359       36,397       920       (50,115,780 )     (7,067 )     36,609       —       708       37,317  
 
 
                                                                                
Net income for the second half
     —       —       5,986       —       —       —       5,986       —       204       6,190  
Items recognized directly in equity
     —       —       381       501       —       —       882       —       11       893  
 
Total excluding transactions with shareholders
     —       —       6,367       501       —       —       6,868       —       215       7,083  
 
Cash dividend
     —       —       (1,745 )     —       —       —       (1,745 )     —       (85 )     (1,830 )
Issuance of common shares
     250,661       3       25       —       —       —       28       —       —       28  
Purchase of treasury shares
     —       —       —       —       (6,598,500 )     (1,384 )     (1,384 )     —       —       (1,384 )
Sale of treasury shares (1)
     —       —       22       —       1,389,380       162       184       —       —       184  
Repayment of subsidiaries’ redeemable preferred shares
     —       —       —       —       —       —       —       —       —       —  
Share-based payments
     —       —       85       —       —       —       85       —       —       85  
Transaction with shareholders
     250,651       3       (1,613 )     —       5,209,120       1,222       2,832       —       (85 )     (2,917 )
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 half
     —       —       7,124       —       —       —       7,124       —       229       7,353  
Items recognized directly in equity
     —       —       193       (1,862 )     —       —       (1,669 )     —       (46 )     (1,715 )
Total excluding transactions with shareholders
     —       —       7,317       (1,862 )     —       —       5,455       —       183       5,638  
Four-for-one split of shares par value (2)
     1,845,348,888       —       —       —       (102,747,996 )     —       —       —       —       —  
Spin-off of Arkema
     —       —       (2,045 )     (209 )     —       —       (2,254 )     —       (8 )     (2,262 )
Cash dividend
     —       —       (2,022 )     —       —       —       (2,022 )     —       (230 )     (2,252 )
Issuance of common shares
     11,496,072       28       445       —       —       —       473       —       —       473  
Purchase of treasury shares
     —       —       —       —       (42,000,000 )     (2,193 )     (2,193 )     —       —       (2,193 )
Sale of treasury shares (1)
     —       —       4       —       2,967,320       88       92       —       —       92  
Repayment of subsidiaries’ redeemable preferred shares
     —       —       —       —       —       —       —       —       —       —  
Share-based payments
     —       —       76       —       —       —       76       —       —       76  
Transactions with shareholders
     1,856,844,960       28       (3,542 )     (209 )     (141,780,676 )     (2,105 )     (5,828 )     —       (238 )     (6,066 )
Cancellation of repurchased shares
     —       —       —       —       —       —       —       —       —       —  
 
As of June 30, 2006
     2,471,961,256       6,179       41,279       (650 )     (176,030,008 )     (6,536 )     40,272       —       783       41,055  
 
 
(1)   Treasury shares related to the stock option purchase plans
 
(2)   Annual Meeting of shareholders, May 12, 2006

 

 

BUSINESS SEGMENT INFORMATION
TOTAL
(unaudited)
                                                 
    Amounts in millions of euros  
2nd quarter 2006   Upstream     Downstream     Chemicals     Corporate     Intercompany     Total  
 
Non-Group sales
     5,424       30,516       4,965       4               40,909  
Intersegment sales
     5,439       1,256       443       44       (7,182 )     —  
Excise taxes
     —       (5,141 )     —       —       —       (5,141 )
 
Revenues from sales
     10,863       26,631       5,408       48       (7,182 )     35,768  
 
Operating expenses
     (4,702 )     (25,021 )     (4,972 )     (192 )     7,182       (27,705 )
Depreciation, depletion, and amortization of tangible assets and leasehold rights
     (785 )     (283 )     (134 )     (10 )             (1,212 )
 
Operating income
     5,376       1,327       302       (154 )             6,851  
 
Equity in income (loss) of affiliates and other items
     252       75       (44 )     139               422  
Tax on net operating income
     (3,237 )     (394 )     (73 )     31               (3,673 )
 
Net operating income
     2,391       1,008       185       16               3,600  
 
Net cost of net debt
                                             (18 )
Minority interests and dividends on subsidiaries’ redeemable preferred shares
                                             (141 )
 
Net income from continuing operations Group share
                                             3,441  
 
Net income from discontinued operations Group share
                                             —  
 
Net income Group share
                                             3,441  
 
                                                 
2nd quarter 2006                                    
(adjustments) (*)   Upstream     Downstream     Chemicals     Corporate     Intercompany     Total  
 
Non-Group sales
                                               
Intersegment sales
                                                
Excise taxes
                                                
 
Revenues from sales
                                                
 
Operating expenses
     —       291       42       (11 )             322  
Depreciation, depletion, and amortization of tangible assets and leasehold rights
     —       —       —       —               —  
 
Operating income (1)
     —       291       42       (11 )             322  
 
Equity in income (loss) of affiliates and other items (2)
     —       10       (51 )     (122 )             (163 )
Tax on net operating income
     —       (80 )     3       4               (73 )
 
Net operating income (1)
     —       221       (6 )     (129 )             86  
 
Net cost of net debt
                                             —  
Minority interests and dividends on subsidiaries’ redeemable preferred shares
                                             (6 )
 
Net income from continuing operations Group share
                                             80  
 
Net income from discontinued operations Group share
                                             —  
 
Net income Group share
                                             80  
 
 
                                                
(*) 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
     —       291       92       —                  
On net operating income
     —       221       62       —                  
(2) Of which equity share of amortization of intangible assets related to the Sanofi-Aventis merger
     —       —       —       (87 )                
                                                 
2nd quarter 2006                                    
(adjusted)   Upstream     Downstream     Chemicals     Corporate     Intercompany     Total  
 
Non-Group sales
     5,424       30,516       4,965       4               40,909  
Intersegment sales
     5,439       1,256       443       44       (7,182 )     —  
Excise taxes
     —       (5,141 )     —       —       —       (5,141 )
 
Revenues from sales
     10,863       26,631       5,408       48       (7,182 )     35,768  
 
Operating expenses
     (4,702 )     (25,312 )     (5,014 )     (181 )     7,182       (28,027 )
Depreciation, depletion, and amortization of tangible assets and leasehold rights
     (785 )     (283 )     (134 )     (10 )             (1,212 )
 
Operating income
     5,376       1,036       260       (143 )             6,529  
 
Equity in income (loss) of affiliates and other items
     252       65       7       261               585  
Tax on net operating income
     (3,237 )     (314 )     (76 )     27               (3,600 )
 
Net operating income
     2,391       787       191       145               3,514  
 
Net cost of net debt
                                             (18 )
Minority interests and dividends on subsidiaries’ redeemable preferred shares
                                             (135 )
 
Net income from continuing operations Group share
                                             3,361  
 
Net income from discontinued operations Group share
                                             —  
 
Net income Group share
                                             3,361  
 
                                                 
2nd quarter 2006   Upstream     Downstream     Chemicals     Corporate     Intercompany     Total  
 
Total expenditures
     2,209       368       176       26       —       2,779  
Divestitures at selling price
     502       50       67       5       —       624  
Cash flow from operating activities
     3,371       984       (7 )     (302 )     —       4,046  
 

 

 

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       4,689       8       —       38,103  
Intersegment sales
     5,400       1,335       152       43       (6,930 )     —  
Excise taxes
     —       (4,607 )     —       —       —       (4,607 )
 
Revenues from sales
     11,114       24,420       4,841       51       (6,930 )     33,496  
 
Operating expenses
     (4,680 )     (22,931 )     (4,486 )     (140 )     6,930       (25,307 )
Depreciation, depletion, and amortization of tangible assets and leasehold rights
     (833 )     (260 )     (129 )     (9 )     —       (1,231 )
 
Operating income
     5,601       1,229       226       (98 )     —       6,958  
 
Equity in income (loss) of affiliates and other items
     383       74       17       201       —       675  
Tax on net operating income
     (3,454 )     (373 )     (55 )     53       —       (3,829 )
 
Net operating income
     2,530       930       188       156       —       3,804  
 
Net cost of net debt
     —       —       —       —       —       (41 )
Minority interests and dividends on subsidiaries’ redeemable preferred shares
     —       —       —       —       —       (88 )
 
Net income from continuing operations Group share
     —       —       —       —       —       3,675  
 
Net income from discontinued operations Group share
     —       —       —       —       —       8  
 
Net income Group share
     —       —       —       —       —       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
     —       373       (5 )     —       —       368  
 
Equity in income (loss) of affiliates and other items
     195       18       1       (81 )     —       133  
Tax on net operating income
     (65 )     (111 )     2       —       —       (174 )
 
Net operating income
     130       280       (2 )     (81 )     —       327  
 
Net cost of net debt
     —       —       —       —       —       —  
Minority interests and dividends on subsidiaries’ redeemable preferred shares
     —       —       —       —       —       (1 )
 
Net income from continuing operations Group share
     —       —       —       —       —       326  
 
Net income from discontinued operations Group share
     —       —       —       —       —       (19 )
 
Net income Group share
     —       —       —       —       —       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       4,689       8       —       38,103  
Intersegment sales
     5,400       1,335       152       43       (6,930 )     —  
Excise taxes
     —       (4,607 )     —       —       —       (4,607 )
 
Revenues from sales
     11,114       24,420       4,841       51       (6,930 )     33,496  
 
Operating expenses
     (4,680 )     (23,304 )     (4,481 )     (140 )     6,930       (25,675 )
Depreciation, depletion, and amortization of tangible assets and leasehold rights
     (833 )     (260 )     (129 )     (9 )     —       (1,231 )
 
Operating income
     5,601       856       231       (98 )     —       6,590  
 
Equity in income (loss) of affiliates and other items
     188       56       16       282       —       542  
Tax on net operating income
     (3,389 )     (262 )     (57 )     53       —       (3,655 )
 
Net operating income
     2,400       650       190       237       —       3,477  
 
Net cost of net debt
     —       —       —       —       —       (41 )
Minority interests and dividends on subsidiaries’ redeemable preferred shares
     —       —       —       —       —       (87 )
 
Net income from continuing operations Group share
     —       —       —       —       —       3,349  
 
Net income from discontinued operations Group share
     —       —       —       —       —       27  
 
Net income Group share
     —       —       —       —       —       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  
2nd quarter 2005   Upstream     Downstream     Chemicals     Corporate     Intercompany     Total  
 
Non-Group sales
     4,210       23,119       4,272       8               31,609  
Intersegment sales
     4,167       935       176       20       (5,298 )     —  
Excise taxes
     —       (5,246 )     —       —               (5,246 )
 
Revenues from sales
     8,377       18,808       4,448       28       (5,298 )     26,363  
 
Operating expenses
     (3,326 )     (17,093 )     (4,139 )     (121 )     5,298       (19,381 )
Depreciation, depletion, and amortization of tangible assets and leasehold rights
     (839 )     (268 )     (140 )     (7 )             (1,254 )
 
Operating income
     4,212       1,447       169       (100 )             5,728  
 
Equity in income (loss) of affiliates and other items
     176       112       13       131               431  
Tax on net operating income
     (2,501 )     (471 )     (46 )     30               (2,988 )
 
Net operating income
     1,887       1,088       136       60               3,171  
 
Net cost of net debt
                                             (48 )
Minority interests and dividends on subsidiaries’ redeemable preferred shares
                                             (79 )
 
Net income from continuing operations Group share
                                             3,044  
 
Net income from discontinued operations Group share
                                             35  
 
Net income Group share
                                             3,079  
 
                                                 
2nd quarter 2005                                    
(adjustments) (*)   Upstream     Downstream     Chemicals     Corporate     Intercompany     Total  
 
Non-Group sales Intersegment sales Excise taxes
                                                
 
Revenues from sales
                                                
 
Operating expenses
     —       503       (112 )     —               391  
Depreciation, depletion, and amortization of tangible assets and leasehold rights
     —       —       (11 )     —               (11 )
 
Operating income (1)
     —       503       (123 )     —               380  
 
Equity in income (loss) of affiliates and other items (2)
     —       17       3       (90 )             (70 )
Tax on net operating income
     —       (165 )     40       —               (125 )
 
Net operating income (1)
     —       355       (80 )     (90 )             185  
 
Net cost of net debt
                                             —  
Minority interests and dividends on subsidiaries’ redeemable preferred shares
                                             (4 )
 
Net income from continuing operations Group share
                                             181  
 
Net income from discontinued operations Group share
                                             (8 )
 
Net income Group share
                                             173  
 
 
                                                
(*) 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
     —       503       (112 )     —                  
On net operating income
     —       355       (73 )     —                  
(2) Of which equity share of amortization of intangible assets related to the Sanofi-Aventis merger
     —       —       —       (55 )                
                                                 
2nd quarter 2005                                    
(adjusted)   Upstream     Downstream     Chemicals     Corporate     Intercompany     Total  
 
Non-Group sales
     4,210       23,119       4,272       8               31,609  
Intersegment sales
     4,167       935       176       20       (5,298 )     —  
Excise taxes
     —       (5,246 )     —       —               (5,246 )
 
Revenues from sales
     8,377       18,808       4,448       28       (5,298 )     26,363  
 
Operating expenses
     (3,326 )     (17,596 )     (4,027 )     (121 )     5,298       (19,772 )
Depreciation, depletion, and amortization of tangible assets and leasehold rights
     (839 )     (268 )     (129 )     (7 )             (1,243 )
 
Operating income
     4,212       944       292       (100 )             5,348  
 
Equity in income (loss) of affiliates and other items
     176       95       10       220               501  
Tax on net operating income
     (2,501 )     (306 )     (86 )     30               (2,863 )
 
Net operating income
     1,887       733       216       150               2,986  
 
Net cost of net debt
                                             (48 )
Minority interests and dividends on subsidiaries’ redeemable preferred shares
                                             (75 )
 
Net income from continuing operations Group share
                                             2,863  
 
Net income from discontinued operations Group share
                                             43  
 
Net income Group share
                                             2,906  
 
                                                 
2nd quarter 2005   Upstream     Downstream     Chemicals     Corporate     Intercompany     Total  
 
Total expenditures
     1,638       359       245       13               2,255  
Divestitures at selling price
     262       58       8       49               377  
Cash flow from operating activities
     2,731       (70 )     205       (169 )             2,697  
 

 

 

BUSINESS SEGMENT INFORMATION
TOTAL
(unaudited)
                                                 
    Amounts in millions of euros  
1st half 2006   Upstream     Downstream     Chemicals     Corporate     Intercompany     Total  
 
Non-Group sales
     11,138       58,208       9,654       12               79,012  
Intersegment sales
     10,839       2,591       595       87       (14,112 )     —  
Excise taxes
     —       (9,748 )     —       —               (9,748 )
 
Revenues from sales
     21,977       51,051       10,249       99       (14,112 )     69,264  
 
Operating expenses
     (9,382 )     (47,952 )     (9,458 )     (332 )     14,112       (53,012 )
Depreciation, depletion, and amortization of tangible assets and leasehold rights
     (1,618 )     (543 )     (263 )     (19 )             (2,443 )
 
Operating income
     10,977       2,556       528       (252 )     —       13,809  
 
Equity in income (loss) of affiliates and other items
     635       149       (27 )     340               1,097  
Tax on net operating income
     (6,691 )     (767 )     (128 )     84               (7,502 )
 
Net operating income
     4,921       1,938       373       172               7,404  
 
Net cost of net debt
                                             (59 )
Minority interests and dividends on subsidiaries’ redeemable preferred shares
                                             (229 )
 
Net income from continuing operations Group share
                                             7,116  
 
Net income from discontinued operations Group share
                                             8  
 
Net income Group share
                                             7,124  
 
                                                 
1st half 2006                                    
(adjustments) (*)   Upstream     Downstream     Chemicals     Corporate     Intercompany     Total  
 
Non-Group sales
     —       —       —       —       —       —  
Intersegment sales
     —       —       —       —       —       —  
Excise taxes
     —       —       —       —       —       —  
 
Revenues from sales
                                             -  
 
Operating expenses
     —       664       37       (11 )             690  
Depreciation, depletion, and amortization of tangible assets and leasehold rights
     —       —       —       —               —  
 
Operating income (1)
     —       664       37       (11 )             690  
 
Equity in income (loss) of affiliates and other items (2)
     195       28       (50 )     (203 )             (30 )
Tax on net operating income
     (65 )     (191 )     5       4               (247 )
 
Net operating income (1)
     130       501       (8 )     (210 )             413  
 
Net cost of net debt
                                             —  
Minority interests and dividends on subsidiaries’ redeemable preferred shares
                                             (7 )
 
Net income from continuing operations Group share
                                             406  
 
Net income from discontinued operations Group share
                                             (19 )
 
Net income Group share
                                             387  
 
 
                                                
(*) 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
     —       664       92       —                  
On net operating income
     —       501       63       —                  
(2) Of which equity share of amortization of intangible assets related to the Sanofi-Aventis merger
     —       —       —       (170 )                
                                                 
1st half 2006                                    
(adjusted)   Upstream     Downstream     Chemicals     Corporate     Intercompany     Total  
 
Non-Group sales
     11,138       58,208       9,654       12               79,012  
Intersegment sales
     10,839       2,591       595       87       (14,112 )     —  
Excise taxes
     —       (9,748 )     —       —               (9,748 )
 
Revenues from sales
     21,977       51,051       10,249       99       (14,112 )     69,264  
 
Operating expenses
     (9,382 )     (48,616 )     (9,495 )     (321 )     14,112       (53,702 )
Depreciation, depletion, and amortization of tangible assets and leasehold rights
     (1,618 )     (543 )     (263 )     (19 )             (2,443 )
 
Operating income
     10,977       1,892       491       (241 )             13,119  
 
Equity in income (loss) of affiliates and other items
     440       121       23       543               1,127  
Tax on net operating income
     (6,626 )     (576 )     (133 )     80               (7,255 )
 
Net operating income
     4,791       1,437       381       382               6,991  
 
Net cost of net debt
     —       —       —       —               (59 )
Minority interests and dividends on subsidiaries’ redeemable preferred shares
     —       —       —       —               (222 )
 
Net income from continuing operations Group share
     —       —       —       —               6,710  
 
Net income from discontinued operations Group share
     —       —       —       —               27  
 
Net income Group share
     —       —       —       —               6,737  
 
                                                 
1st half 2006   Upstream     Downstream     Chemicals     Corporate     Intercompany     Total  
 
Total expenditures
     4,290       689       500       50               5,529  
Divestitures at selling price
     855       63       95       8               1,021  
Cash flow from operating activities
     7,202       2,185       (44 )     (458 )             8,885  
 

 

 

BUSINESS SEGMENT INFORMATION
TOTAL
(unaudited)
                                                 
    Amounts in millions of euros  
1st half 2005   Upstream     Downstream     Chemicals     Corporate     Intercompany     Total  
 
Non-Group sales
     9,015       44,535       8,429       8               61,987  
Intersegment sales
     8,393       1,964       402       78       (10,837 )     —  
Excise taxes
     —       (10,297 )     —       —               (10,297 )
 
Revenues from sales
     17,408       36,202       8,831       86       (10,837 )     51,690  
 
Operating expenses
     (7,592 )     (32,693 )     (7,867 )     (235 )     10,837       (37,550 )
Depreciation, depletion, and amortization of tangible assets and leasehold rights
     (1,594 )     (519 )     (262 )     (16 )             (2,391 )
 
Operating income
     8,222       2,990       702       (165 )             11,749  
 
Equity in income (loss) of affiliates and other items
     253       227       25       194               698  
Tax on net operating income
     (4,780 )     (1,001 )     (215 )     81               (5,915 )
 
Net operating income
     3,695       2,216       512       109               6,532  
 
Net cost of net debt
                                             (90 )
Minority interests and dividends on subsidiaries’ redeemable preferred shares
                                             (166 )
 
Net income from continuing operations Group share
                                             6,276  
 
Net income from discontinued operations Group share
                                             11  
 
Net income Group share
                                             6,287  
 
                                                 
1st half 2005                                    
(adjustments) (*)   Upstream     Downstream     Chemicals     Corporate     Intercompany     Total  
 
Non-Group sales Intersegment sales Excise taxes
                                                
 
Revenues from sales
                                                
 
Operating expenses
     —       1,155       (42 )     —               1,113  
Depreciation, depletion, and amortization of tangible assets and leasehold rights
     —       —       (11 )     —               (11 )
 
Operating income (1)
     —       1,155       (53 )     —               1,102  
 
Equity in income (loss) of affiliates and other items (2)
     —       30       3       (214 )             (181 )
Tax on net operating income
     —       (380 )     17       —               (363 )
 
Net operating income (1)
     —       805       (33 )     (214 )             558  
 
Net cost of net debt
                                             —  
Minority interests and dividends on subsidiaries’ redeemable preferred shares
                                             (5 )
 
Net income from continuing operations Group share
                                             553  
 
Net income from discontinued operations Group share
                                             (91 )
 
Net income Group share
                                             462  
 
 
                                                
(*) 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
     —       1,155       (42 )     —                  
On net operating income
     —       805       (26 )     —                  
(2) Of which equity share of amortization of intangible assets related to the Sanofi-Aventis merger
     —       —       —       (137 )                
                                                 
1st half 2005                                    
(adjusted)   Upstream     Downstream     Chemicals     Corporate     Intercompany     Total  
 
Non-Group sales
     9,015       44,535       8,429       8               61,987  
Intersegment sales
     8,393       1,964       402       78       (10,837 )     —  
Excise taxes
     —       (10,297 )     —       —               (10,297 )
 
Revenues from sales
     17,408       36,202       8,831       86       (10,837 )     51,690  
 
Operating expenses
     (7,592 )     (33,848 )     (7,825 )     (235 )     10,837       (38,663 )
Depreciation, depletion, and amortization of tangible assets and leasehold rights
     (1,594 )     (519 )     (251 )     (16 )             (2,380 )
 
Operating income
     8,222       1,835       755       (165 )             10,647  
 
Equity in income (loss) of affiliates and other items
     253       197       22       407               879  
Tax on net operating income
     (4,780 )     (621 )     (232 )     81               (5,552 )
 
Net operating income
     3,695       1,411       545       323               5,974  
 
Net cost of net debt
                                             (90 )
Minority interests and dividends on subsidiaries’ redeemable preferred shares
                                             (161 )
 
Net income from continuing operations Group share
                                             5,723  
 
Net income from discontinued operations Group share
                                             102  
 
Net income Group share
                                             5,825  
 
                                                 
1st half 2005   Upstream     Downstream     Chemicals     Corporate     Intercompany     Total  
 
Total expenditures
     3,001       576       403       59               4,039  
Divestitures at selling price
     390       103       30       67               590  
Cash flow from operating activities
     4,919       1,619       287       (91 )             6,734  
 

 

 

CONSOLIDATED STATEMENT OF INCOME (Impact of adjustments)
TOTAL
(unaudited)
                                 
    1st half     1st half  
    2006     2005  
                    Consolidated        
                    statement of        
Amounts in millions of euros   Adjusted     Adjustments     income     Adjusted  
         
Sales
     79,012       —       79,012       61,987  
Excise taxes
     (9,748 )     —       (9,748 )     (10,297 )
Revenues from sales
     69,264       —       69,264       51,690  
 
Purchases, net of inventory variation
     (43,585 )     756       (42,829 )     (29,796 )
Other operating expenses
     (9,856 )     (66 )     (9,922 )     (8,703 )
Unsuccessful exploration costs
     (261 )     —       (261 )     (164 )
Depreciation, depletion, and amortization of tangible assets and leasehold rights
     (2,443 )     —       (2,443 )     (2,380 )
       
 
Operating income
                                
Corporate
     (241 )     (11 )     (252 )     (165 )
Business segments
     13,360       701       14,061       10,812  
       
Total operating income
     13,119       690       13,809       10,647  
       
Other income
     139       194       333       85  
Other expense
     (193 )     (50 )     (243 )     (77 )
 
Financial interest on debt
     (715 )     —       (715 )     (530 )
Financial income from marketable securities and cash equivalents
     611       —       611       396  
Cost of net debt
     (104 )     —       (104 )     (134 )
 
Other financial income
     307       —       307       199  
Other financial expense
     (120 )     —       (120 )     (118 )
Income taxes
     (7,210 )     (247 )     (7,457 )     (5,509 )
Equity in income (loss) of affiliates
     994       (174 )     820       791  
         
Consolidated net income from continuing operations (Group without Arkema)
     6,932       413       7,345       5,884  
       
Consolidated net income from discontinued operations (Arkema)
     27       (19 )     8       102  
       
Consolidated net income
     6,959       394       7,353       5,986  
       
Group share
     6,737       387       7,124       5,825  
Minority interests and dividends on subsidiaries’ redeemable preferred shares
     222       7       229       161  
       
                                 
    2nd quarter     2nd quarter  
    2006     2005  
                    Consolidated        
                    statement of        
Amounts in millions of euros   Adjusted     Adjustments     income     Adjusted  
         
Sales
     40,909       —       40,909       31,609  
Excise taxes
     (5,141 )     —       (5,141 )     (5,246 )
Revenues from sales
     35,768       —       35,768       26,363  
 
Purchases, net of inventory variation
     (22,770 )     383       (22,387 )     (14,705 )
Other operating expenses
     (5,111 )     (61 )     (5,172 )     (4,975 )
Unsuccessful exploration costs
     (146 )     —       (146 )     (92 )
Depreciation, depletion, and amortization of tangible assets and leasehold rights
     (1,212 )     —       (1,212 )     (1,243 )
       
 
Operating income
                                
Corporate
     (143 )     (11 )     (154 )     (100 )
Business segments
     6,672       333       7,005       5,448  
       
Total operating income
     6,529       322       6,851       5,348  
       
Other income
     73       —       72       81  
Other expense
     (108 )     (51 )     (158 )     (27 )
 
Financial interest on debt
     (387 )     —       (387 )     (286 )
Financial income from marketable securities and cash equivalents
     340       —       340       214  
Cost of net debt
     (47 )     —       (47 )     (72 )
 
Other financial income
     201       —       201       113  
Other financial expense
     (69 )     —       (69 )     (55 )
Income taxes
     (3,571 )     (73 )     (3,644 )     (2,841 )
Equity in income (loss) of affiliates
     488       (112 )     376       391  
       
Consolidated net income from continuing operations (Group without Arkema)
     3,496       86       3,582       2,938  
       
Consolidated net income from discontinued operations (Arkema)
     —       —       —       45  
       
Consolidated net income
     3,496       86       3,582       2,983  
       
Group share
     3,361       80       3,441       2,906  
Minority interests and dividends on subsidiaries’ redeemable preferred shares
     135       6       141       77