EX-99.7 8 a03169exv99w7.htm EX-99.7: 3Q 2009 RESULTS OF TOTAL S.A. exv99w7

(TOTAL LOGO)
Exhibit 99.7
2, place Jean Millier
La Défense 6
92 400 Courbevoie France
Tel. : 33 (1) 47 44 58 53
Fax : 33 (1) 47 44 58 24
Bertrand DE LA NOUE
Sandrine SABOUREAU
Laurent KETTENMEYER
Matthieu GOT
Robert HAMMOND (U.S.)
Tel. : (1) 713-483-5070
Fax : (1) 713-483-5629
TOTAL S.A.
Capital 5.867.520.185 euros
542 051 180 R.C.S. Nanterre
www.total.com
(NEWS RELEASE)
Paris, November 4, 2009
Third quarter 2009 results
Main results1-2

         
• Third quarter adjusted net income3
  1.9 billion euros   -54%
 
  2.7 billion dollars   -56%
 
 
  0.84 euros per share   -54%
 
  1.20 dollars per share   -56%
 
        
• First nine months adjusted net income
  5.7 billion euros   -48%
 
  7.8 billion dollars   -54%
 
        
• First nine months net income (Group share)
  6.4 billion euros   -44%
Highlights since the beginning of the third quarter 2009

•   Upstream production of 2,243 kboe/d in the third quarter 2009
 
•   Started up production at Tyrihans in Norway, Tombua Landana in Angola, Qatargas II Train B and Yemen LNG
 
•   Algerian authorities approved development plan for Timimoun gas field
 
•   Declaration of commerciality filed for the Itau gas field in Bolivia
 
•   Signed gas sales contract allowing the development of the Greater Bongkot South field in Thailand
 
•   Announced Gardenia-1, first oil discovery on Block 17/06 in Angola
 
•   Acquisition of a 43.75% interest in the UK Shetlands P967 block that includes the Tobermory gas discovery
 
•   Signed an agreement with KazMunaiGas to take a 17% interest in the development of the Khvalynskoye gas field in the Caspian Sea
 
•   Creation of joint research partnerships with IMEC and the French National Center for Scientific Research together with l’Ecole Polytechnique to focus on solar photovoltaic technology
 
1   percent changes are relative to the same period 2008.
 
2   dollar amounts represent euro amounts converted at the average €-$ exchange rate for the period : 1.4303 $/€ in the 3rd quarter 2009, 1.5050 $/€ in the 3rd quarter 2008, 1.3632 $/€ in the 2nd quarter 2009, 1.3665 $/€ for the first nine months of 2009 and 1.5217 $/€ for the first nine months of 2008.
 
3   adjusted net income = net income using replacement cost (Group share) adjusted for special items and excluding Total’s share of adjustments and, from 2009, selected items related to Sanofi-Aventis. Total’s net income (Group share) for the 3nd quarter 2009 was 1,923 M€.


 

 

The Board of Directors of Total, led by Chairman Thierry Desmarest, met on November 3, 2009 to review the Group’s third quarter 2009 results.
Adjusted net income was 1,869 million euros (M€), a decrease of 54% compared to the third quarter 2008 and an increase of 9% compared to second quarter 2009.
Commenting on the results, CEO Christophe de Margerie said :
« In the third quarter, the average Brent price increased to 68 $/b. However, spot gas prices and refining margins reached very low levels, reflecting the sharp decline in demand and the resulting oversupply. The Chemicals segment benefited from a small improvement in margins.
In this mixed environment, Total’s adjusted net income was 2.7 billion dollars, an increase of 14% compared to the second quarter 2009. Compared to the third quarter 2008, when oil prices hit record highs, the Group’s results are down 56%, but, once again, they show resilience that is among the best of the peer group. In the third quarter 2009, the Group generated net cash flow of 3 billion dollars and reduced its gearing to 21%.
In the Upstream, Total’s production is back on track with growth of 3% from the second quarter to 2,243 kboe/d, thanks in particular to the ramp up of Akpo in Nigeria and Tahiti in the Gulf of Mexico as well as the start-up of Tyrihans in Norway, Tombua Landana in Angola and Qatargas 2 Train B. The mid-October start-up of Yemen LNG completes the Group’s objective to start up its 2009 major projects.
Total is also pursuing the development of new fields and took decisive steps during the quarter on projects in Bolivia, Algeria and Thailand. The recent agreement with KazMunaïGas in the Caspian Sea, like the one signed with Novatek in Russia in the previous quarter, also illustrates the Group’s ability to create partnerships and to participate in the development of new resources by leveraging its technical expertise and its capacity for investment. At the same time, the Upstream segment is continuing to actively implement cost reduction programs targeting its fixed costs and the projected cost of its investments.
In the Downstream segment, refining is faced with a very difficult environment. We are working to reduce costs and restore the profitability of this activity. In the Chemicals segment, the benefits of our restructuring efforts can be seen in the sequential improvement in the results despite an environment that remains difficult.
Total is determined to pursue its strategy of profitable and responsible growth, while reaffirming the priority of safety and the environment. Combining the key elements of reliability and safety in our operations and production growth with cost reduction will allow us to successfully implement our strategy.
w w w

2

 

• Key figures4
                                                         
                        3Q09                       9M09
                        vs   in millions of euros                   vs
3Q09   2Q09   3Q08   3Q08   except earnings per share and number of shares   9M09   9M08   9M08
 
  33,628       31,430       48,849       -31 %  
Sales
     95,099       141,262       -33 %
  3,510       3,044       8,083       -57 %  
Adjusted operating income from business segments
     10,169       22,988       -56 %
  1,808       1,678       4,063       -56 %  
Adjusted net operating income from business segments
     5,536       11,019       -50 %
  1,501       1,451       2,899       -48 %  
• Upstream
     4,434       8,729       -49 %
  146       156       901       -84 %  
• Downstream
     902       1,799       -50 %
  161       71       263       -39 %  
• Chemicals
     200       491       -59 %
  1,869       1,721       4,070       -54 %  
Adjusted net income
     5,703       11,047       -48 %
  0.84       0.77       1.81       -54 %  
Adjusted fully-diluted earnings per share (euros)
     2.55       4.91       -48 %
  2,236.8       2,235.6       2,244.3       —    
Fully-diluted weighted-average shares (millions)
     2,235.9       2,250.4       -1 %
  1,923       2,169       3,050       -37 %  
Net income (Group share)
     6,382       11,384       -44 %
  3,256       3,634       3,371       -3 %  
Investments5
     9,825       8,882       +11 %
  3,169       3,575       3,195       -1 %  
Investments including net investments in equity affiliates and non-consolidated companies5
     9,584       7,879       +22 %
  807       858       718       +12 %  
Divestments
     2,137       1,642       +30 %
  4,538       1,939       7,338       -38 %  
Cash flow from operations
     10,471       14,576       -28 %
  3,454       3,237       5,642       -39 %  
Adjusted cash flow from operations
     10,063       14,771       -32 %
                                                         
                        3Q09                       9M09
                        vs   in millions of dollars 6                   vs
3Q09   2Q09   3Q08   3Q08   except earnings per share and number of shares   9M09   9M08   9M08
 
  48,098       42,845       73,518       -35 %  
Sales
     129,953       214,958       -40 %
  5,020       4,150       12,165       -59 %  
Adjusted operating income from business segments
     13,896       34,981       -60 %
  2,586       2,287       6,115       -58 %  
Adjusted net operating income from business segments
     7,565       16,768       -55 %
  2,147       1,978       4,363       -51 %  
• Upstream
     6,059       13,283       -54 %
  209       213       1,356       -85 %  
• Downstream
     1,233       2,738       -55 %
  230       97       396       -42 %  
• Chemicals
     273       747       -63 %
  2,673       2,346       6,125       -56 %  
Adjusted net income
     7,793       16,810       -54 %
  1.20       1.05       2.73       -56 %  
Adjusted fully-diluted earnings per share (dollars)
     3.49       7.47       -53 %
  2,236.8       2,235.6       2,244.3       —    
Fully-diluted weighted-average shares (millions)
     2,235.9       2,250.4       -1 %
  2,750       2,957       4,590       -40 %  
Net income (Group share)
     8,721       17,323       -50 %
  4,657       4,954       5,073       -8 %  
Investments5
     13,426       13,516       -1 %
  4,533       4,873       4,808       -6 %  
Investments including net investments in equity affiliates and non-consolidated companies5
     13,097       11,989       +9 %
  1,154       1,170       1,081       +7 %  
Divestments
     2,920       2,499       +17 %
  6,491       2,643       11,044       -41 %  
Cash flow from operations
     14,309       22,180       -35 %
  4,940       4,413       8,491       -42 %  
Adjusted cash flow from operations
     13,751       22,477       -39 %
 
4   adjusted income (adjusted operating income, adjusted net operating income and adjusted net income) is defined as income using replacement cost, adjusted for special items affecting operating income and excluding Total’s equity share of adjustments and, from 2009, selected items related to Sanofi-Aventis; adjusted cash flow from operations is defined as cash flow from operations before changes in working capital at replacement cost; adjustment items are on page 17.
 
5   including acquisitions.
 
6   dollar amounts represent euro amounts converted at the average €-$ exchange rate for the period.

3

 

• Third quarter 2009 results
> Operating income
In the third quarter 2009, the Brent price averaged 68.1 $/b, a decrease of 41% compared to the third quarter 2008 and an increase of 15% compared to the second quarter 2009. The TRCV European refining margin indicator fell to 6.6 $/t on average in the third quarter 2009, a decrease of 85% compared to the third quarter 2008 and 47% compared to the second quarter 2009.
The euro-dollar exchange rate averaged 1.43 $/€ in the third quarter 2009 compared to 1.51 $/€ in the third quarter 2008 and 1.36 $/€ in the second quarter 2009.
In this environment, the adjusted operating income from the business segments was 3,510 M€, a decrease of 57% compared to the third quarter 20087. Expressed in dollars, the decrease was 59%.
The effective tax rate8 for the business segments was 57% in the third quarter 2009 compared to 56% in the third quarter 2008.
Adjusted net operating income from the business segments was 1,808 M€ compared to 4,063 M€ in the third quarter 2008, a decrease of 56%.
Expressed in dollars, adjusted net operating income from the business segments was 2.6 billion dollars (B$), a decrease of 58% compared to the third quarter 2008.
> Net income
Adjusted net income was 1,869 M€ compared to 4,070 M€ in the third quarter 2008, a decrease of 54%. Expressed in dollars, adjusted net income decreased by 56%. It excludes the after-tax inventory effect, special items, and the Group’s equity share of adjustments and selected items related to Sanofi-Aventis.
•   The after-tax inventory effect had a positive impact on net income of 122 M€ in the third quarter 2009 and a negative effect of 752 M€ in the third quarter 2008.
•   The Group’s share of adjustments and selected items related to Sanofi-Aventis had a negative impact on net income of 70 M€ in the third quarter 2009. The adjustments related to Sanofi-Aventis had a negative impact of 78 M€ in the third quarter 2008.
•   Other special items had a positive impact on net income of 2 M€ in the third quarter 2009. In the third quarter 2008, other special items had a negative impact on net income of 190 M€9.
Reported net income (Group share) was 1,923 M€ compared to 3,050 M€ in the third quarter 2008.
The effective tax rate for the Group was 56.5% in the third quarter 2009.
The Group did not buy back shares in the third quarter 2009.
Adjusted fully-diluted earnings per share, based on 2,236.8 million fully-diluted weighted-average shares, was 0.84 euros compared to 1.81 euros in the third quarter 2008, a decrease of 54%.
Expressed in dollars, adjusted fully-diluted earnings per share fell by 56% to $1.20.
 
7   special items affecting operating income from the business segments had a negative impact of 9 M€ in the 3rd quarter 2009 and no impact in the 3rd quarter 2008.
 
8   defined as: (tax on adjusted net operating income) / (adjusted net operating income - income from equity affiliates, dividends received from investments and impairments of acquisition goodwill + tax on adjusted net operating income).
 
9   detail shown on page 17.

4

 

> Investments — divestments10
Investments excluding acquisitions and including net investments in equity affiliates and non-consolidated companies were 3.1 B€ (4.4 B$) in the third quarter 2009 compared to 2.8 B€ (4.2 B$) in the third quarter 2008.
Acquisitions were 58 M€ in the third quarter 2009.
Asset sales in the third quarter 2009 were 702 M€, consisting essentially of Sanofi-Aventis shares.
Net investments11 were 2.4 B€ (3.5 B$) in the third quarter 2009 compared to 2.7 B€ (4.0 B$) in the third quarter 2008.
> Cash flow
Cash flow from operating activities was 4,538 M€ in the third quarter 2009 compared to 7,338 M€ in the third quarter 2008. The 38% decrease was mainly due to the decrease in net income and a decrease in working capital requirements in the third quarter 2009 that was smaller than the decrease in working capital requirements in the third quarter 2008.
Adjusted cash flow12 was 3,454 M€, a decrease of 39% compared to third quarter 2008. Expressed in dollars, adjusted cash flow was 4.9 B$, a decrease of 42%.
Net cash flow 13 for the Group was 2,089 M€ compared to 4,685 M€ in the third quarter 2008. Expressed in dollars, net cash flow for the Group was 3.0 B$ in the third quarter 2009.
 
10   detail shown on page 18.
 
11   net investments = investments including acquisitions and net investments in equity affiliates and non-consolidated companies - asset sales + net financing for employees related to stock purchase plans.
 
12   cash flow from operations at replacement cost before changes in working capital.
 
13   net cash flow = cash flow from operations + divestments - gross investments.

5

 

• Results for the first nine months 2009
> Operating income
Compared to the first nine months of 2008, the oil environment in the first nine months of 2009 was marked by a 48% decrease in the average price of Brent to 57.3 $/b. The TRCV European refining margin indicator fell by 51% to 17.9 $/t. The euro-dollar exchange rate was 1.37 $/€ in the first nine months of 2009 compared to 1.52 $/€ in the first nine months of 2008.
In this context, the adjusted operating income from the business segments was 10,169 M€, a decrease of 56% compared to the first nine months of 200814. Expressed in dollars, adjusted operating income from the business segments was 13.9 B$, a decrease of 60% compared to the first nine months of 2008.
The effective tax rate15 for the business segments was 55% in the first nine months of 2009 compared to 58% in the first nine months of 2008, reflecting mainly the lower tax rate in the Upstream.
Adjusted net operating income from the business segments was 5,536 M€ compared to 11,019 M€ in the first nine months of 2008, a decrease of 50%. The smaller decrease, relative to the one in adjusted operating income, is essentially due to the lower effective tax rate between the two periods and a more limited decrease in the contribution from equity affiliates.
Expressed in dollars, adjusted net operating income from the business segments fell by 55%.
> Net income
Adjusted net income decreased by 48% to 5,703 M€ in the first nine months of 2009 from 11,047 M€ in the first nine months of 2008. It excludes the after-tax inventory effect, special items, and the Group’s equity share of adjustments and selected items related to Sanofi-Aventis.
•   The after-tax inventory effect had a positive impact on net income of 1,237 M€ in the first nine months of 2009 compared to a positive impact of 676 M€ in the first nine months of 2008.
•   The Group’s share of adjustments and selected items related to Sanofi-Aventis had a negative impact on net income of 252 M€ in the first nine months of 2009. The adjustments related to Sanofi-Aventis had a negative impact on net income of 227 M€ in the first nine months of 2008.
•   Other special items had a negative impact on net income of 306 M€ in the first nine months of 2009 compared to a negative impact of 112 M€ in the first nine months of 200816.
Reported net income (Group share) was 6,382 M€ compared to 11,384 M€ in the first nine months of 2008.
The effective tax rate for the Group was 55% in the first nine months of 2009.
The Group did not buy back shares in the first nine months of 2009. On September 30, 2009, there were 2,239.7 million fully-diluted shares compared to 2,238.3 million fully-diluted shares on September 30, 2008.
Adjusted fully-diluted earnings per share, based on 2,235.9 million weighted-average shares was 2.55 euros compared to 4.91 euros in the first nine months of 2008, a decrease of 48%.
Expressed in dollars, the adjusted fully-diluted earnings per share was 3.49 compared to 7.47 in the first nine months of 2008, a decrease of 53%.
 
14   special items affecting operating income from the business segments had a negative impact of 300 M€ in the first nine months of 2009 and no impact in the first nine months of 2008.
 
15   defined as: (tax on adjusted net operating income) / (adjusted net operating income - income from equity affiliates, dividends received from investments and impairments of acquisition goodwill + tax on adjusted net operating income).
 
16   detail shown on page 17.

6

 

> Investments — divestments17
Investments excluding acquisitions and including net investments in equity affiliates and non-consolidated companies were 9.0 B€ (12.2 B$) in the first nine months of 2009 compared to 7.4 B€ (11.2 B$) in the first nine months of 2008.
Acquisitions were 631 M€ in the first nine months of 2009.
Asset sales in the first nine months of 2009 were 1,842 M€, consisting essentially of Sanofi-Aventis shares.
Net investments18 were 7.7 B€ in the first nine months of 2009, slightly higher than the 7.2 B€ in the first nine months of 2008. Expressed in dollars, net investments in the first nine months of 2009 were 10.5 B$, a decrease of 5% compared to the 11 B$ of net investments in the first nine months of 2008.
> Cash flow
Cash flow from operating activities was 10,471 M€, a decrease of 28% compared to the first nine months of 2008, essentially due to the decrease in net income.
Adjusted cash flow19 was 10,063 M€, a decrease of 32%. Expressed in dollars, adjusted cash flow was 13.8 B$, a decrease of 39%.
Net cash flow20 for the Group was 2,783 M€ compared to 7,336 M€ in the first nine months of 2008. Expressed in dollars, net cash flow for the Group was 3.8 B$ in the first nine months of 2009.
The net-debt-to-equity ratio was 20.8% on September 30, 2009 compared to 24.7% on June 30, 2009 and 15.4% on September 30, 200821.
 
17   detail shown on page 18.
 
18   net investments = investments including acquisitions and net investments in equity affiliates and non-consolidated companies - asset sales + net financing for employees related to stock purchase plans.
 
19   cash flow from operations at replacement cost before changes in working capital.
 
20   net cash flow = cash flow from operations + divestments - gross investments.
 
21   detail shown on page 19.

7

 

• Analysis of business segment results
Upstream
> Environment — liquids and gas price realizations*
                                                         
                        3Q09                       9M09
                        vs                       vs
3Q09   2Q09   3Q08   3Q08       9M09   9M08   9M08
 
  68.1       59.1       115.1       -41 %  
Brent ($/b)
     57.3       111.1       -48 %
  65.1       54.8       107.8       -40 %  
Average liquids price ($/b)
     53.7       104.4       -49 %
  4.89       4.71       8.05       -39 %  
Average gas price ($/Mbtu)
     5.20       7.31       -29 %
  50.7       44.2       83.9       -40 %  
Average hydrocarbons price ($/boe)
     44.5       80.4       -45 %
 
*   consolidated subsidiaries, excluding fixed margin and buy-back contracts.
Total’s average realized liquids price decreased by 40% and 49%, respectively, in the third quarter and the first nine months of 2009 compared to the same periods in 2008, in line with the changes in the price of Brent.
The average realized price for Total’s natural gas decreased by 39% in the third quarter 2009 compared to the third quarter 2008 and by 29% in the first nine months of 2009 compared to the first nine months of 2008.
> Production
                                                         
                        3Q09                       9M09
                        vs                       vs
3Q09   2Q09   3Q08   3Q08   Hydrocarbon production   9M09   9M08   9M08
 
  2,243       2,182       2,231       +1 %  
Combined production (kboe/d)
     2,249       2,336       -4 %
  1,379       1,328       1,409       -2 %  
• Liquids (kb/d)
     1,373       1,463       -6 %
  4,726       4,686       4,471       +6 %  
• Gas (Mcf/d)
     4,789       4,743       +1 %
Hydrocarbon production was 2,243 thousand barrels of oil equivalent per day (kboe/d) in the third quarter 2009, an increase of 0.5% compared to the third quarter 2008 and 2.8% compared to the second quarter 2009. Compared to the third quarter 2008, production increased mainly as a result of :
•   +5% for ramp-ups and start-ups of new fields net of the normal decline,
•   +1% for the price effect22,
•   -2.5% for OPEC reductions and lower gas demand linked to the economic recession,
•   -1% for disruptions in Nigeria related to security issues,
•   -2% for changes in the portfolio, mainly in Venezuela and Libya.
In the first nine months of 2009, hydrocarbon production was 2,249 kboe/d, a decrease of 3.7% compared to the first nine months of 2008, mainly as a result of :
•   +1.5% for ramp-ups and start-ups of new fields net of the normal decline,
•   +2% for the price effect22,
•   -3% for OPEC reductions and lower gas demand,
•   -1.5% for disruptions in Nigeria related to security issues
•   -2.5% for changes in the portfolio, essentially in Venezuela and Libya.
 
22   impact of changing hydrocarbon prices on entitlement volumes.

8

 

> Results
                                                         
                        3Q09                       9M09
                        vs                       vs
3Q09   2Q09   3Q08   3Q08   in millions of euros   9M09   9M08   9M08
 
  3,236       2,843       6,525       -50 %  
Adjusted operating income*
     8,971       19,912       -55 %
  1,501       1,451       2,899       -48 %  
Adjusted net operating income*
     4,434       8,729       -49 %
  190       176       368       -48 %  
• includes income from equity affiliates
     593       967       -39 %
  2,512       2,664       2,480       +1 %  
Investments
     7,426       6,734       +10 %
  87       105       188       -54 %  
Divestments
     321       860       -63 %
  2,854       1,943       3,732       -24 %  
Cash flow from operating activities
     7,375       11,626       -37 %
  2,939       2,550       3,715       -21 %  
Adjusted cash flow
     8,168       11,464       -29 %
 
*   detail of adjustment items shown in business segment information.
Adjusted net operating income for the Upstream segment was 1,501 M€ in the third quarter 2009 compared to 2,899 M€ in the third quarter 2008, a decrease of 48%.
Expressed in dollars, adjusted net operating income for the Upstream segment decreased by 51%, reflecting essentially the impact of lower hydrocarbon prices compared to the third quarter 2008.
Compared to the third quarter 2008, the decrease in income from equity affiliates was driven principally by lower results from Nigeria LNG.
The effective tax rate for the Upstream segment was 59% compared to 58% in the second quarter 2009 and 62% in the third quarter 2008.
Over the first nine months of 2009, adjusted net operating income for the Upstream segment was 4,434 M€ compared to 8,729 M€ in the first nine months of 2008, a decrease of 49%.
 
Expressed in dollars, adjusted net operating income for the Upstream segment was 6.1 B$, a 54% decrease compared to the first nine months of 2008, essentially due to lower hydrocarbon prices.
The return on average capital employed (ROACE 23) for the Upstream segment for the twelve months ended September 30, 2009 was 20% compared to 25% for the twelve months ended June 30, 2009 and 36% for the full year 2008.
 
23   calculated based on adjusted net operating income and average capital employed, using replacement cost, as shown on page 20.

9

 

Downstream
> Refinery throughput and utilization rates*
                                                         
                        3Q09                       9M09
                        vs                       vs
3Q09   2Q09   3Q08   3Q08       9M09   9M08   9M08
 
  2,142       2,175       2,393       -10 %  
Total refinery throughput (kb/d)
     2,184       2,360       -7 %
  828       925       1,013       -18 %  
• France
     882       959       -8 %
  1,045       1,024       1,168       -11 %  
• Rest of Europe
     1,052       1,130       -7 %
  269       226       212       +27 %  
• Rest of world
     250       271       -8 %
                               
Utilization rates
                        
  78 %     79 %     89 %          
• Based on crude only
     79 %     87 %        
  82 %     84 %     92 %          
• Based on crude and other feedstock
     84 %     91 %        
 
*     includes share of CEPSA.
In the third quarter 2009, refinery throughput decreased by 10% compared to the third quarter 2008 and by 2% compared to the second quarter 2009.
The third quarter 2009 was affected by scheduled refinery turnarounds at Vlissingen and Normandy. Also, during the quarter, several refineries elected to reduce throughput to adjust to economic conditions.
Scheduled turnarounds and voluntary throughput reductions in the third quarter 2009 reduced the utilization rate based on crude and other feedstock to 82% from 92% in the third quarter 2008.
> Results
                                                         
                        3Q09                       9M09
                        vs   in millions of euros                   vs
3Q09   2Q09   3Q08   3Q08   except TRCV refining margins   9M09   9M08   9M08
 
  6.6       12.4       45.0       -85 %  
European refining margin indicator — TRCV ($/t)
     17.9       36.6       -51 %
  83       141       1,215       -93 %  
Adjusted operating income*
     1,015       2,457       -59 %
  146       156       901       -84 %  
Adjusted net operating income*
     902       1,799       -50 %
  75       28       39       +92 %  
• includes income from equity affiliates
     136       56       x2.4  
  607       825       638       -5 %  
Investments
     1,927       1,446       +33 %
  23       26       46       -50 %  
Divestments
     85       198       -57 %
  944       (28 )     2,731       -65 %  
Cash flow from operating activities
     2,564       2,508       +2 %
  229       239       1,466       -84 %  
Adjusted cash flow
     1,402       2,609       -46 %
 
*   detail of adjustment items shown in business segment information.
The TRCV European refining margin indicator averaged 6.6 $/t in the third quarter 2009, a decrease of 85% compared to the third quarter 2008. For the first nine months of 2009, the TRCV European refining margin indicator averaged 17.9 $/t, a decrease of 51% compared to the same period last year.
Adjusted net operating income for the Downstream segment was 146 M€ in the third quarter 2009, a decrease of 84% compared to the third quarter 2008, reflecting essentially the sharp decrease in refining margins.

10

 

Expressed in dollars, adjusted net operating income for the Downstream segment was 209 M$, a decrease of 85% compared to the third quarter 2008.
Adjusted net operating income for the Downstream segment in the first nine months of 2009 was 902 M€, a decrease of 50% compared to the first nine months of 2008.
 
Expressed in dollars, adjusted net operating income for the Downstream segment was 1.2 B$ in the first nine months of 2009, a decrease of 55% compared to the first nine months of 2008, reflecting essentially the unfavorable refining environment.
The ROACE24 for the Downstream segment for the twelve months ended September 30, 2009 was 13% compared to 18% for the twelve months ended June 30, 2009 and 20% for the full year 2008.
 
24   calculated based on adjusted net operating income and average capital employed, using replacement cost, as shown on page 20.

11

 

Chemicals
                                                         
                        3Q09                       9M09
                        vs                       vs
3Q09   2Q09   3Q08   3Q08   in millions of euros   9M09   9M08   9M08
 
  3,892       3,684       5,431       -28 %  
Sales
     10,794       16,138       -33 %
  2,326       2,164       3,675       -37 %  
• Base chemicals
     6,266       10,727       -42 %
  1,566       1,520       1,756       -11 %  
• Specialties
     4,528       5,411       -16 %
  191       60       343       -44 %  
Adjusted operating income*
     183       619       -70 %
  161       71       263       -39 %  
Adjusted net operating income*
     200       491       -59 %
  53       19       176       -70 %  
• Base chemicals
     32       214       -85 %
  111       58       89       +25 %  
• Specialties
     185       284       -35 %
  112       115       212       -47 %  
Investments
     406       597       -32 %
 
  13       8       14       -7 %  
Divestments
     27       33       -18 %
 
  300       280       14       x21    
Cash flow from operating activities
     758       (19 )   na
 
  244       114       352       -31 %  
Adjusted cash flow
     224       770       -71 %
 
*   detail of adjustment items shown in business segment information.
In the third quarter 2009, the environment for the Chemicals segment continued to be affected by weak demand in Europe and North America, but margins for the Petrochemicals increased from the levels of the previous quarter.
In the third quarter 2009, sales for the Chemicals segment were 3.9 B€.
Adjusted net operating income for the Chemicals segment was 161 M€ in the third quarter 2009, a decrease of 39% compared to the third quarter 2008 but more than double the level of the second quarter 2009. The sequential improvement reflects improved margins and lower costs in both the Petrochemicals and the Specialties.
In the first nine months of 2009, adjusted net operating income for the Chemicals segment was 200 M€ compared to 491 M€ for the same period in 2008, a decrease of 59% that resulted from significantly weaker demand in Europe and North America.
The ROACE25 for the Chemicals segment for the twelve months ended September 30, 2009 was 5% compared to 7% for the twelve months ended June 30, 2009 and 9% for the full year 2008.
 
25   calculated based on adjusted net operating income and average capital employed, using replacement cost, as shown on page 20.

12

 

• Summary and outlook
The ROACE for the twelve months ended September 30, 2009 was 15% for the Group and 16% for the business segments. The ROACE at the Group level was 19% for the twelve months ended June 30, 2009 and 26% for the full year 2008.
Return on equity for the twelve months ended September 30, 2009 was 17.5%.
Investments26 in the business segments, excluding acquisitions, were 12.2 B$ through September 2009, in line with the 2009 budget of 18 B$ for the full year. The net-debt-to-equity-ratio was 20.8% at September 30, 2009 compared to 24.7% at the end of the previous quarter.
Following the July 30, 2009 approval by the Board of Directors, Total will pay the 2009 interim dividend of 1.14 € per share on November 18, 200927.
Since the start of the fourth quarter 2009, the dollar has continued to fall against the euro, while oil prices have continued to rise, lifted by expectations for an economic recovery, the onset of the winter heating season in the northern hemisphere and the perception of a tight supply-demand balance in the medium term.
Despite modest improvement in diesel margins, European refining margins remain at very weak levels, requiring the Group to maintain voluntary throughput reductions.
In the Upstream, with the start-up of Yemen LNG in mid-October, the Group’s production in the coming months should reflect the ongoing ramp-up from the major projects started up in 2009 and maintenance levels normally below that of the third quarter.
To provide for production growth over the medium term, Total is continuing to prepare its next wave of projects, including Surmont Phase 2 in Canada, CLOV in Angola and Laggan-Tormore in the UK, for which it expects to make final investment decisions in the coming quarters.
¨ ¨ ¨
To listen to CFO Patrick de la Chevardière’s conference call with financial analysts today at 15:00 (Paris time) please log on to www.total.com or call +44 (0)203 367 9453 in Europe or +1 866 907 5928 in the U.S. (access code : Total). For a replay through November 12, please consult the website or call +44 (0)207 107 0686 in Europe or 1 877 642 3018 in the US (code : 264 973).
 
26   includes net investments in equity affiliates and non-consolidated companies.
 
27   the ex-dividend date for the 2009 interim dividend is November 13 and the payment date is November 18, 2009; for the ADR (NYSE :TOT) the ex-dividend date is November 9.

13

 

The September 30, 2009 notes to the condensed 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.
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.
 
The adjusted results of the Downstream and Chemical segments are also presented according to the replacement cost method. This method is used to assess the segments’ performance and ensure the comparability of the segments’ results with those of its competitors, mainly North American.
 
In the replacement cost method, which approximates the LIFO (Last-In, First-Out) method, the variation of inventory values in the income statement is determined by the average price of the period rather than the historical value. The inventory valuation effect is the difference between the results according to FIFO (First-In, First-Out) and replacement cost.
 
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 adjustments and, from 2009, selected items related to Sanofi-Aventis. They are meant to facilitate the analysis of the financial performance and the comparison of income between periods.
Dollar amounts presented herein represent euro amounts converted at the average euro-dollar exchange rate for the applicable period and are not the result of financial statements prepared in dollars.

14

 

Operating information by segment
Third quarter and first nine months 2009
• Upstream
                                                         
                        3Q09                       9M09
                        vs   Combined liquids and gas                   vs
3Q09   2Q09   3Q08   3Q08   production by region (kboe/d)   9M09   9M08   9M08
 
  569       574       553       +3 %  
Europe
     609       593       +3 %
  762       713       747 *     +2 %  
Africa
     739       795 *     -7 %
  31       13       13       x2.4    
North America
     18       14       +29 %
  259       248       247       +5 %  
Far East
     254       248       +2 %
  419       420       430       -3 %  
Middle East
     419       433       -3 %
  183       193       218 *     -16 %  
South America
     187       227 *     -18 %
  20       21       23       -13 %  
Rest of world
     23       26       -12 %
 
  2,243       2,182       2,231       +1 %  
Total production
     2,249       2,336       -4 %
 
  351       342       398       -12 %  
Includes equity and non-consolidated affiliates
     348       404       -14 %
 
*   restated to reclassify Total’s 48.83% share of CEPSA’s production in Colombia.
                                                         
                        3Q09                       9M09
                        vs                       vs
3Q09   2Q09   3Q08   3Q08   Liquids production by region (kb/d)   9M09   9M08   9M08
 
  279       275       288       -3 %  
Europe
     291       295       -1 %
  647       600       627 *     +3 %  
Africa
     627       666 *     -6 %
  27       11       10       x2.7    
North America
     16       11       +45 %
  33       33       28       +18 %  
Far East
     34       28       +21 %
  300       310       330       -9 %  
Middle East
     308       332       -7 %
  79       87       115 *     -31 %  
South America
     84       119 *     -29 %
  14       12       11       +27 %  
Rest of world
     13       12       +8 %
 
  1,379       1,328       1,409       -2 %  
Total production
     1,373       1,463       -6 %
 
  286       289       344       -17 %  
Includes equity and non-consolidated affiliates
     289       350       -17 %
 
*   restated to reclassify Total’s 48.83% share of CEPSA’s production in Colombia.

15

 

                                                         
                        3Q09                       9M09
                        vs                       vs
3Q09   2Q09   3Q08   3Q08   Gas production by region (Mcf/d)   9M09   9M08   9M08
 
  1,580       1,639       1,442       +10 %  
Europe
     1,733       1,618       +7 %
  583       580       621       -6 %  
Africa
     572       659       -13 %
  19       9       12       +58 %  
North America
     12       18       -33 %
  1,276       1,215       1,210       +5 %  
Far East
     1,238       1,222       +1 %
  657       609       552       +19 %  
Middle East
     614       560       +10 %
  575       585       569       +1 %  
South America
     570       589       -3 %
  36       49       65       -45 %  
Rest of world
     50       77       -35 %
 
  4,726       4,686       4,471       +6 %  
Total production
     4,789       4,743       +1 %
 
  355       285       290       +22 %  
Includes equity and non-consolidated affiliates
     314       293       +7 %
                                                         
                        3Q09                       9M09
                        vs                       vs
3Q09   2Q09   3Q08   3Q08   Liquefied natural gas   9M09   9M08   9M08
 
  2.12       2.12       2.32       -9 %  
LNG sales* (Mt)
     6.34       6.90       -8 %
 
*     sales, Group share, excluding trading ; 1 Mt/y = approx. 133 Mcf/d ; data from 2008 previous period have been restated to reflect volumes estimation for Bontang LNG in Indonesia based on the 2008 SEC coefficient.
      • Downstream
                                                         
                        3Q09                       9M09
                        vs                       vs
3Q09   2Q09   3Q08   3Q08   Refined products sales by region (kb/d)*   9M09   9M08   9M08
 
  2,014       1,979       2,161       -7 %  
Europe
     2,055       2,102       -2 %
  278       272       279       —    
Africa
     276       279       -1 %
  164       161       136       +21 %  
Americas
     171       170       +1 %
  134       148       147       -9 %  
Rest of world
     137       145       -6 %
 
  2,590       2,560       2,723       -5 %  
Total consolidated sales
     2,639       2,696       -2 %
 
  887       1,092       992       -11 %  
Trading
     993       964       +3 %
 
  3,477       3,652       3,715       -6 %  
Total refined product sales
     3,632       3,660       -1 %
 
 
* includes share of CEPSA

16

 

Adjustment items
• Adjustments to operating income from business segments
                                         
3Q09   2Q09   3Q08   in millions of euros   9M09   9M08
 
                       
Special items affecting operating income from the
                
  (9 )     (188 )     —    
     business segments
     (300 )     —  
 
  —       —       —    
• Restructuring charges
     —       —  
  (3 )     (105 )     —    
• Impairments
     (108 )     —  
  (6 )     (83 )     —    
• Other
     (192 )     —  
 
  214       1,065       (1,193 )  
Pre-tax inventory effect : FIFO vs. replacement cost
     1,756       869  
 
  205       877       (1,193 )  
Total adjustments affecting operating income from the business segments
     1,456       869  
 
• Adjustments to net income (Group share)
                                         
3Q09   2Q09   3Q08   in millions of euros   9M09   9M08
 
  2       (221 )     (190 )  
Special items affecting net income (Group share)
     (306 )     (112 )
 
  46       28       50    
• Gain on asset sales
     87       197  
  (7 )     (99 )     (4 )  
• Restructuring charges
     (112 )     (48 )
  (2 )     (71 )     (34 )  
• Impairments
     (73 )     (34 )
  (35 )     (79 )     (202 )  
• Other
     (208 )     (227 )
 
  (70 )     (119 )     (78 )  
Equity shares of adjustments and, from 2009, selected items related to Sanofi-Aventis*
     (252 )     (227 )
 
  122       788       (752 )  
After-tax inventory effect : FIFO vs. replacement cost
     1,237       676  
 
  54       448       (1,020 )  
Total adjustments to net income
     679       337  
 
*   based on Total’s share in Sanofi-Aventis of 8.6% at 9/30/2009, 9.7% at 6/30/2009, and 12.4% at 9/30/2008.
Effective tax rates
                                         
3Q09   2Q09   3Q08   Effective tax rate*   9M09   9M08
 
  59.3 %     58.3 %     61.7 %  
Upstream
     58.6 %     61.8 %
  56.5 %     55.9 %     55.9 %  
Group
     54.8 %     57.6 %
 
*   tax on adjusted net operating income / (adjusted net operating income — income from equity affiliates, dividends received from investments, and impairments of acquisition goodwill + tax on adjusted net operating income).

17

 

Investments — Divestments
                                                         
                        3Q09                       9M09
                        vs                       vs
3Q09   2Q09   3Q08   3Q08   in millions of euros   9M09   9M08   9M08
 
  3,111       3,095       2,774       +12 %  
Investments excluding acquisitions*
     8,953       7,363       +22 %
 
  227       154       212       +7 %  
• Capitalized exploration
     609       589       +3 %
  187       23       (56 )   na  
• Net investments in equity affiliates and non-consolidated companies
     435       (466 )   na
 
  58       480       421       -86 %  
Acquisitions
     631       516       +22 %
 
  3,169       3,575       3,195       -1 %  
Investments including acquisitions*
     9,584       7,879       +22 %
 
  702       781       524       +34 %  
Asset sales
     1,842       719       x2.6  
 
  2,449       2,776       2,653       -8 %  
Net investments **
     7,688       7,240       +6 %
                                                         
                        3Q09                       9M09
                        vs                       vs
3Q09   2Q09   3Q08   3Q08   expressed in millions of dollars***   9M09   9M08   9M08
 
  4,450       4,219       4,175       +7 %  
Investments excluding acquisitions*
     12,234       11,204       +9 %
 
  325       210       319       +2 %  
• Capitalized exploration
     832       896       -7 %
  267       31       (84 )   na  
• Net investments in equity affiliates and non-consolidated companies
     594       (709 )   na
 
  83       654       634       -87 %  
Acquisitions
     862       785       +10 %
 
  4,533       4,873       4,809       -6 %  
Investments including acquisitions*
     13,097       11,989       +9 %
 
  1,004       1,065       789       +27 %  
Asset sales
     2,517       1,094       x2.3  
 
  3,503       3,784       3,993       -12 %  
Net investments **
     10,506       11,017       -5 %
 
*   includes net investments in equity affiliates and non-consolidated companies.
 
**   net investments = investments including acquisitions and net investments in equity affiliates and non-consolidated companies - asset sales + net financing for employees related to stock purchase plans.
 
***   dollar amounts represent euro amounts converted at the average €-$ exchange rate for the period

18

 

Net-debt-to-equity ratio
                         
in millions of euros   9/30/2009   6/30/2009   9/30/2008
 
Current borrowings
     6,012       7,916       5,378  
Net current financial assets
     (160 )     (123 )     (230 )
Non-current financial debt
     19,146       19,640       16,347  
Hedging instruments of non-current debt
     (983 )     (875 )     (406 )
Cash and cash equivalents
     (13,775 )     (14,299 )     (13,231 )
 
Net debt
     10,240       12,259       7,858  
 
Shareholders equity
     49,620       51,299       50,801  
Estimated dividend payable*
     (1,273 )     (2,541 )     (920 )
Minority interests
     959       963       1,001  
 
Equity
     49,306       49,721       50,882  
 
Net-debt-to-equity ratio
     20.8 %     24.7 %     15.4 %
 
*   for 9/30/09, based on a 2009 dividend equal to the dividend paid in 2008 (2.28 €/share), after deducting the interim dividend of 1.14 € per share approved by the Board of Directors on July 30, 2009.
2009 Sensitivities*
                 
                Impact on adjusted
            Impact on adjusted   net operating
    Scenario   Change   operating income(e)   income(e)
 
Dollar
  1.30 $/€   +0.1 $  per   €-1.3 B€   -0.7 B€
 
Brent
  60 $/b   +1 $/b   +0.32 B€ / 0.42 B$   +0.15 B€ / 0.20 B$
 
European refining margins TRCV
  30 $/t   +1 $/t   +0.08 B€ / 0.11 B$   +0.06 B€ / 0.07 B$
 
*   sensitivities revised once per year upon publication of the previous year’s fourth quarter results. The impact of the €-$ sensitivity on adjusted operating income and adjusted net operating income attributable to the Upstream segment are approximately 75% and 65% respectively, and the remaining impact of the €-$ sensitivity is essentially in the Downstream segment.

19

 

Return on average capital employed
• For the twelve months ended September 30, 2009
                                         
in millions of euros   Upstream   Downstream   Chemicals**   Segments   Group***
 
Adjusted net operating income
     6,429       1,672       377       8,478       9,096  
Capital employed at 9/30/2008*
     30,184       12,649       8,107       50,940       58,165  
Capital employed at 9/30/2009*
     35,514       13,513       6,845       55,872       61,030  
 
ROACE
     19.6 %     12.8 %     5.0 %     15.9 %     15.3 %
 
*   at replacement cost (excluding after-tax inventory effect).
 
**   capital employed for Chemicals reduced for the Toulouse-AZF provision of 121 M€ pre-tax at 9/30/2008
 
***   capital employed for the Group adjusted for the amount of the interim dividend payable approved in July 2009 (2,544 M€).
• For the twelve months ended June 30, 2009
                                         
in millions of euros   Upstream   Downstream   Chemicals**   Segments   Group
 
Adjusted net operating income
     7,827       2,427       479       10,733       11,388  
Capital employed at 6/30/2008*
     26,676       13,491       7,394       47,561       56,107  
Capital employed at 6/30/2009*
     35,385       13,939       6,915       56,239       62,294  
 
ROACE
     25.2 %     17.7 %     6.7 %     20.7 %     19.2 %
 
*   at replacement cost (excluding after-tax inventory effect).
 
**   capital employed for Chemicals reduced for the Toulouse-AZF provision of 126 M€ pre-tax at 6/30/2008.
• For the twelve months ended September 30, 2008
                                         
in millions of euros   Upstream   Downstream   Chemicals**   Segments   Group***
 
Adjusted net operating income
     11,298       2,345       578       14,221       14,915  
Capital employed at 9/30/2007*
     26,863       11,446       7,305       45,614       53,243  
Capital employed at 9/30/2008*
     30,184       12,649       8,107       50,940       58,165  
 
ROACE
     39.6 %     19.5 %     7.5 %     29.5 %     26.8 %
 
*   at replacement cost (excluding after-tax inventory effect).
 
**   capital employed for Chemicals reduced for the Toulouse-AZF provision of 139 M€ pre-tax at 9/30/2007 and 121 M€ pre-tax at 9/30/2008.
 
***   capital employed for the Group adjusted for the amount of the interim dividend payable approved in September 2008 (2,545 M€).

20