e6vk

Exhibit 99.2

Consolidated statement of income

TOTAL


For the year ended December 31,
(M€)^(a)		2010			2009			2008

Sales	(Notes 4 & 5)		159,269			131,327			179,976
Excise taxes			(18,793	)		(19,174	)		(19,645	)
Revenues from sales			140,476			112,153			160,331

Purchases net of inventory variation	(Note 6)		(93,171	)		(71,058	)		(111,024	)
Other operating expenses	(Note 6)		(19,135	)		(18,591	)		(19,101	)
Exploration costs	(Note 6)		(864	)		(698	)		(764	)
Depreciation, depletion and amortization of tangible assets and mineral interests			(8,421	)		(6,682	)		(5,755	)
Other income	(Note 7)		1,396			314			369
Other expense	(Note 7)		(900	)		(600	)		(554	)

Financial interest on debt			(465	)		(530	)		(1,000	)
Financial income from marketable securities & cash equivalents			131			132			473
Cost of net debt	(Note 29)		(334	)		(398	)		(527	)

Other financial income	(Note 8)		442			643			728
Other financial expense	(Note 8)		(407	)		(345	)		(325	)

Equity in income (loss) of affiliates	(Note 12)		1,953			1,642			1,721

Income taxes	(Note 9)		(10,228	)		(7,751	)		(14,146	)

Consolidated net income			10,807			8,629			10,953

Group share			10,571			8,447			10,590
Minority interests			236			182			363


Earnings per share (€)			4.73			3.79			4.74
Fully-diluted earnings per share (€)			4.71			3.78			4.71


(a)		Except for per share amounts.

Page 1

Consolidated balance sheet

TOTAL


As of December 31,
(M€)		2010			2009			2008

ASSETS

Non-current assets
Intangible assets, net	(Notes 5 & 10)		8,917			7,514			5,341
Property, plant and equipment, net	(Notes 5 & 11)		54,964			51,590			46,142
Equity affiliates: investments and loans	(Note 12)		11,516			13,624			14,668
Other investments	(Note 13)		4,590			1,162			1,165
Hedging instruments of non-current financial debt	(Note 20)		1,870			1,025			892
Other non-current assets	(Note 14)		3,655			3,081			3,044

Total non-current assets			85,512			77,996			71,252

Current assets
Inventories, net	(Note 15)		15,600			13,867			9,621
Accounts receivable, net	(Note 16)		18,159			15,719			15,287
Other current assets	(Note 16)		7,483			8,198			9,642
Current financial assets	(Note 20)		1,205			311			187
Cash and cash equivalents	(Note 27)		14,489			11,662			12,321

Total current assets			56,936			49,757			47,058

Assets classified as held for sale	(Note 34)		1,270			—			—

Total assets			143,718			127,753			118,310


LIABILITIES & SHAREHOLDERS’ EQUITY

Shareholders’ equity
Common shares			5,874			5,871			5,930
Paid-in surplus and retained earnings			60,538			55,372			52,947
Currency translation adjustment			(2,495	)		(5,069	)		(4,876	)
Treasury shares			(3,503	)		(3,622	)		(5,009	)

Total shareholders’ equity — Group share	(Note 17)		60,414			52,552			48,992

Minority interests			857			987			958

Total shareholders’ equity			61,271			53,539			49,950

Non-current liabilities
Deferred income taxes	(Note 9)		9,947			8,948			7,973
Employee benefits	(Note 18)		2,171			2,040			2,011
Provisions and other non-current liabilities	(Note 19)		9,098			9,381			7,858

Total non-current liabilities			21,216			20,369			17,842

Non-current financial debt	(Note 20)		20,783			19,437			16,191

Current liabilities
Accounts payable			18,450			15,383			14,815
Other creditors and accrued liabilities	(Note 21)		11,989			11,908			11,632
Current borrowings	(Note 20)		9,653			6,994			7,722
Other current financial liabilities	(Note 20)		159			123			158

Total current liabilities			40,251			34,408			34,327

Liabilities directly associated with the assets classified as held for sale	(Note 34)		197			—			—

Total liabilities and shareholders’ equity			143,718			127,753			118,310

Page 3

Consolidated statement of cash flow

TOTAL

(Note 27)


For the year ended December 31,
(M€)	2010			2009			2008


CASH FLOW FROM OPERATING ACTIVITIES
Consolidated net income		10,807			8,629			10,953
Depreciation, depletion and amortization		9,117			7,107			6,197
Non-current liabilities, valuation allowances, and deferred taxes		527			441			(150	)
Impact of coverage of pension benefit plans		(60	)		—			(505	)
(Gains) losses on disposals of assets		(1,046	)		(200	)		(257	)
Undistributed affiliates’ equity earnings		(470	)		(378	)		(311	)
(Increase) decrease in working capital		(496	)		(3,316	)		2,571
Other changes, net		114			77			171

Cash flow from operating activities		18,493			12,360			18,669

CASH FLOW USED IN INVESTING ACTIVITIES
Intangible assets and property, plant and equipment additions		(13,812	)		(11,849	)		(11,861	)
Acquisitions of subsidiaries, net of cash acquired		(862	)		(160	)		(559	)
Investments in equity affiliates and other securities		(654	)		(400	)		(416	)
Increase in non-current loans		(945	)		(940	)		(804	)
Total expenditures		(16,273	)		(13,349	)		(13,640	)
Proceeds from disposals of intangible assets and property, plant and equipment		1,534			138			130
Proceeds from disposals of subsidiaries, net of cash sold		310			—			88
Proceeds from disposals of non-current investments		1,608			2,525			1,233
Repayment of non-current loans		864			418			1,134
Total divestments		4,316			3,081			2,585

Cash flow used in investing activities		(11,957	)		(10,268	)		(11,055	)

CASH FLOW USED IN FINANCING ACTIVITIES
Issuance (repayment) of shares:
- Parent company shareholders		41			41			262
- Treasury shares		49			22			(1,189	)
- Minority shareholders		—			—			(4	)
Dividends paid:
- Parent company shareholders		(5,098	)		(5,086	)		(4,945	)
- Minority shareholders		(152	)		(189	)		(213	)
Other transactions with minority shareholders		(429	)		—			—
Net issuance (repayment) of non-current debt		3,789			5,522			3,009
Increase (decrease) in current borrowings		(731	)		(3,124	)		1,437
Increase (decrease) in current financial assets and liabilities		(817	)		(54	)		850

Cash flow used in financing activities		(3,348	)		(2,868	)		(793	)

Net increase (decrease) in cash and cash equivalents		3,188			(776	)		6,821

Effect of exchange rates		(361	)		117			(488	)
Cash and cash equivalents at the beginning of the period		11,662			12,321			5,988

Cash and cash equivalents at the end of the period		14,489			11,662			12,321

Page 4

Consolidated statement of changes in shareholders’ equity

TOTAL


							Paid-in
							surplus and			Currency									Shareholders’						Total
	Common shares issued						retained			translation			Treasury shares						equity — Group			Minority			shareholders’
(M€)	Number			Amount			earnings			adjustment			Number			Amount			share			interests			equity

As of January 1, 2008		2,395,532,097			5,989			48,797			(4,396	)		(151,421,232	)		(5,532	)		44,858			842			45,700

Net income 2008		—			—			10,590			—			—			—			10,590			363			10,953
Other comprehensive income (Note 17)		—			—			(258	)		(480	)		—			—			(738	)		(34	)		(772	)
Comprehensive income		—			—			10,332			(480	)		—			—			9,852			329			10,181
Dividend		—			—			(4,945	)		—			—			—			(4,945	)		(213	)		(5,158	)
Issuance of common shares (Note 17)		6,275,977			16			246			—			—			—			262			—			262
Purchase of treasury shares		—			—			—			—			(27,600,000	)		(1,339	)		(1,339	)		—			(1,339	)
Sale of treasury shares^(a)		—			—			(71	)		—			5,939,137			221			150			—			150
Share-based payments (Note 25)		—			—			154			—									154			—			154
Other operations with minority interests		—			—			—			—									—			—			—
Share cancellation (Note 17)		(30,000,000	)		(75	)		(1,566	)		—			30,000,000			1,641			—			—			—
Transactions with shareholders		(23,724,023	)		(59	)		(6,182	)		—			8,339,137			523			(5,718	)		(213	)		(5,931	)
As of December 31, 2008		2,371,808,074			5,930			52,947			(4,876	)		(143,082,095	)		(5,009	)		48,992			958			49,950

Net income 2009		—			—			8,447			—			—			—			8,447			182			8,629
Other comprehensive income (Note 17)		—			—			246			(193	)		—			—			53			60			113
Comprehensive income		—			—			8,693			(193	)		—			—			8,500			242			8,742
Dividend		—			—			(5,086	)		—			—			—			(5,086	)		(189	)		(5,275	)
Issuance of common shares (Note 17)		1,414,810			3			38			—			—			—			41			—			41
Purchase of treasury shares		—			—			—			—			—			—			—			—			—
Sale of treasury shares^(a)		—			—			(143	)		—			2,874,905			165			22			—			22
Share-based payments (Note 25)		—			—			106			—			—			—			106			—			106
Other operations with minority interests		—			—			(23	)		—			—			—			(23	)		(24	)		(47	)
Share cancellation (Note 17)		(24,800,000	)		(62	)		(1,160	)		—			24,800,000			1,222			—			—			—
Transactions with shareholders		(23,385,190	)		(59	)		(6,268	)		—			27,674,905			1,387			(4,940	)		(213	)		(5,153	)
As of December 31, 2009		2,348,422,884			5,871			55,372			(5,069	)		(115,407,190	)		(3,622	)		52,552			987			53,539

Net income 2010		—			—			10,571			—			—			—			10,571			236			10,807
Other comprehensive income (Note 17)		—			—			(216	)		2,581			—			—			2,365			9			2,374
Comprehensive income		—			—			10,355			2,581			—			—			12,936			245			13,181
Dividend		—			—			(5,098	)		—			—			—			(5,098	)		(152	)		(5,250	)
Issuance of common shares (Note 17)		1,218,047			3			38			—			—			—			41			—			41
Purchase of treasury shares		—			—			—			—			—			—			—			—			—
Sale of treasury shares^(a)		—			—			(70	)		—			2,919,511			119			49			—			49
Share-based payments (Note 25)		—			—			140			—			—			—			140			—			140
Other operations with minority interests		—			—			(199	)		(7	)		—			—			(206	)		(223	)		(429	)
Share cancellation (Note 17)		—			—			—			—			—			—			—			—			—
Transactions with shareholders		1,218,047			3			(5,189	)		(7	)		2,919,511			119			(5,074	)		(375	)		(5,449	)

As of December 31, 2010		2,349,640,931			5,874			60,538			(2,495	)		(112,487,679	)		(3,503	)		60,414			857			61,271


(a)		Treasury shares related to the stock option purchase plans and restricted stock grants.

Page 5

TOTAL

Notes to the Consolidated Financial Statements

On February 10, 2011, the Board of Directors established and authorized the publication of the Consolidated Financial Statements of TOTAL S.A. for the year ended December 31, 2010, which will be submitted for approval to the shareholders’ meeting to be held on May 13, 2011.

Introduction

The Consolidated Financial Statements of TOTAL S.A. and its subsidiaries (the Group) are presented in Euros and have been prepared on the basis of IFRS (International Financial Reporting Standards) as adopted by the European Union and IFRS as issued by the IASB (International Accounting Standard Board) as of December 31, 2010.

The accounting principles applied in the Consolidated Financial Statements as of December 31, 2010 were the same as those that were used as of December 31, 2009 except for amendments and interpretations of IFRS which were mandatory for the periods beginning after January 1, 2010 (and not early adopted). Their adoption has no material impact on the Consolidated Financial Statements as of December 31, 2010.

Among these new standards or interpretations effective for annual periods beginning on or after January 1, 2010, the revised versions of IFRS 3 “Business Combinations” and IAS 27 “Consolidated and Separate Financial Statements” should be noted. These revised standards introduce new provisions regarding the accounting for business combinations. Their application is prospective.

In addition, as of January 1, 2010, jointly-controlled entities are consolidated under the equity method, as provided for in the alternative method of IAS 31 “Interests in Joint Ventures”. Until December 31, 2009, these entities were consolidated under the proportionate consolidation method. This change involves two entities and is not material (see Note 12 to the Consolidated Financial Statements).

The preparation of financial statements in accordance with IFRS requires the management to make estimates and assumptions that affect the reported amounts of assets, liabilities and contingent liabilities at the date of preparation of the financial statements and reported income and expenses for the period. The management reviews these estimates and assumptions on an ongoing basis, by reference to past experience and various other factors considered as reasonable which form the basis for assessing the carrying amount of assets and liabilities. Actual results may differ significantly from these estimates, if different assumptions or circumstances apply. These judgments and estimates relate principally to the application of the successful efforts method for the oil and gas accounting, the valuation of long-lived assets, the provisions for asset retirement obligations and environmental remediation, the pensions and post-retirements benefits and the income tax computation.

Furthermore, where the accounting treatment of a specific transaction is not addressed by any accounting standard or interpretation, the management applies its judgment to define and apply accounting policies that will lead to relevant and reliable information, so that the financial statements:

	•		give a true and fair view of the Group’s financial position, financial performance and cash flows;

	•		reflect the substance of transactions;

	•		are neutral;

	•		are prepared on a prudent basis; and

	•		are complete in all material aspects.

Page 6

1) Accounting policies

Pursuant to the accrual basis of accounting followed by the Group, the financial statements reflect the effects of transactions and other events when they occur. Assets and liabilities such as property, plant and equipment and intangible assets are usually measured at amortized cost. Financial assets and liabilities are usually measured at fair value.

Accounting policies used by the Group are described below:

A) Principles of consolidation

Subsidiaries that are directly controlled by the parent company or indirectly controlled by other consolidated subsidiaries are fully consolidated.

Investments in jointly-controlled entities are consolidated under the equity method. The Group accounts for jointly-controlled operations and jointly-controlled assets by recognising its share of assets, liabilities, income and expenses.

Investments in associates, in which the Group has significant influence, are accounted for by the equity method. Significant influence is presumed when the Group holds, directly or indirectly (e.g. through subsidiaries), 20% or more of the voting rights. Companies in which ownership interest is less than 20%, but over which the Company is deemed to exercise significant influence, are also accounted for by the equity method.

All significant intercompany balances, transactions and income are eliminated.

B) Business combinations

Business combinations are accounted for using the acquisition method. This method implies the recognition of the acquired identifiable assets, assumed liabilities and any minority interest in the companies acquired by the Group at their fair value.

The acquirer shall recognize goodwill at the acquisition date, being the excess of:

	•		The consideration transferred, the amount of minority interest and, in business combinations achieved in stages, the fair value at the acquisition date of the investment previously held in the acquired company

	•		Over the fair value at the acquisition date of acquired identifiable assets and assumed liabilities.

If the consideration transferred is lower than the fair value of acquired identifiable assets and assumed liabilities, an additional analysis is performed on the identification and valuation of the identifiable elements of the assets and liabilities. Any residual badwill is recorded as income.

In transactions with minority interests, the difference between the price paid (received) and the book value of minority interests acquired (sold) is recognized directly in equity.

The analysis of goodwill is finalized within one year from the acquisition date.

Non-monetary contributions by venturers to a jointly-controlled entity in exchange for an equity interest in the jointly-controlled entity are accounted for by applying guidance provided in SIC 13 “Jointly Controlled Entities — Non-Monetary Contributions by Venturers”. A gain or loss on disposal of the previously held investment is recorded up to the share of the co-venturer in the jointly controlled entity.

C) Foreign currency translation

The financial statements of subsidiaries are prepared in the currency that most clearly reflects their business environment. This is referred to as their functional currency.

(i)

Monetary transactions

Transactions denominated in foreign currencies are translated at the exchange rate on the transaction date. At each balance sheet date, monetary assets and liabilities are translated at the closing rate and the resulting exchange differences are recognized in “Other income” or “Other expenses”.

(ii)

Translation of financial statements denominated in foreign currencies

Assets and liabilities of foreign entities are translated into euros on the basis of the exchange rates at the end of the period. The income and cash flow statements are translated using the average exchange rates for the period. Foreign exchange differences resulting from such translations are either recorded in shareholders’ equity under “Currency translation adjustments” (for the Group share) or under “Minority interests” (for the minority share) as deemed appropriate.

Page 7

D) Sales and revenues from sales

Revenues from sales are recognized when the significant risks and rewards of ownership have been passed to the buyer and when the amount is recoverable and can be reasonably measured. Sales figures include excise taxes collected by the Group within the course of its oil distribution operations. Excise taxes are deducted from sales in order to obtain the “Revenues from sales” indicator.

Revenues from sales of crude oil, natural gas and coal are recorded upon transfer of title, according to the terms of the sales contracts.

Revenues from the production of crude oil and natural gas properties, in which the Group has an interest with other producers, are recognized based on actual volumes sold during the period. Any difference between volumes sold and entitlement volumes, based on the Group net working interest, is recognized as “Crude oil and natural gas inventories” or “Accounts receivable, net” or “Accounts payable”, as appropriate.

Revenues from gas transport are recognized when services are rendered. These revenues are based on the quantities transported and measured according to procedures defined in each service contract.

Revenues from sales of electricity are recorded upon transfer of ownership, according to the terms of the related contracts.

Revenues from services are recognized when the services have been rendered.

Shipping revenues and expenses from time-charter activities are recognized on a pro rata basis over a period that commences upon the unloading of the previous voyage and terminates upon the unloading of the current voyage. Shipping revenue recognition starts only when a charter has been agreed to by both the Group and the customer.

Oil and gas sales are inclusive of quantities delivered that represent production royalties and taxes, when paid in cash, and outside the United States and Canada.

Certain transactions within the trading activities (contracts involving quantities that are purchased to third parties then resold to third parties) are shown at their net value in sales.

Exchanges of crude oil and petroleum products within normal trading activities do not generate any income and therefore these flows are shown at their net value in both the statement of income and the balance sheet.

E) Share-based payments

The Group may grant employees stock options, create employee share purchase plans and offer its employees the opportunity to subscribe to reserved capital increases. These employee benefits are recognized as expenses with a corresponding credit to shareholders’ equity.

The expense is equal to the fair value of the instruments granted. The fair value of the options is calculated using the Black-Scholes model at the grant date. The expense is recognized on a straight-line basis between the grant date and vesting date.

For restricted share plans, the expense is calculated using the market price at the grant date after deducting the expected distribution rate during the vesting period.

The cost of employee-reserved capital increases is immediately expensed. A discount reduces the expense in order to account for the nontransferability of the shares awarded to the employees over a period of five years.

F) Income taxes

Income taxes disclosed in the statement of income include the current tax expenses and the deferred tax expenses.

The Group uses the liability method whereby deferred income taxes are recorded based on the temporary differences between the carrying amounts of assets and liabilities recorded in the balance sheet and their tax bases, and on carry-forwards of unused tax losses and tax credits.

Deferred tax assets and liabilities are measured using the tax rates that have been enacted or substantially enacted at the balance sheet date. The tax rates used depend on the timing of reversals of temporary differences, tax losses and other tax credits. The effect of a change in tax rate is recognized either in the Consolidated Statement of Income or in shareholders’ equity depending on the item it relates to.

Deferred tax assets are recognized when future recovery is probable.

Asset retirement obligations and finance leases give rise to the recognition of assets and liabilities for accounting purposes as described in paragraph K “Leases” and paragraph Q “Asset retirement obligations” of this Note. Deferred income taxes resulting from temporary differences between the carrying amounts and tax bases of such assets and liabilities are recognized.

Page 8

Deferred tax liabilities resulting from temporary differences between the carrying amounts of equity-method investments and their tax bases are recognized. The deferred tax calculation is based on the expected future tax effect (dividend distribution rate or tax rate on the gain or loss upon disposal of these investments).

G) Earnings per share

Earnings per share is calculated by dividing net income (Group share) by the weighted-average number of common shares outstanding during the period, excluding TOTAL shares held by TOTAL S.A. (Treasury shares) and TOTAL shares held by the Group subsidiaries which are deducted from consolidated shareholders’ equity.

Diluted earnings per share is calculated by dividing net income (Group share) by the fully-diluted weighted-average number of common shares outstanding during the period. Treasury shares held by the parent company, TOTAL S.A., and TOTAL shares held by the Group subsidiaries are deducted from consolidated shareholders’ equity. These shares are not considered outstanding for purposes of this calculation which also takes into account the dilutive effect of stock options, restricted share grants and capital increases with a subscription period closing after the end of the fiscal year.

The weighted-average number of fully-diluted shares is calculated in accordance with the treasury stock method provided for by IAS 33. The proceeds, which would be recovered in the event of an exercise of rights related to dilutive instruments, are presumed to be a share buyback at the average market price over the period. The number of shares thereby obtained leads to a reduction in the total number of shares that would result from the exercise of rights.

H) Oil and gas exploration and producing properties and mining activity

The Group applies IFRS 6 “Exploration for and Evaluation of Mineral Resources”. Oil and gas exploration and production properties and assets are accounted for in accordance with the successful efforts method.

(i) Exploration costs

Geological and geophysical costs, including seismic surveys for exploration purposes are expensed as incurred.

Mineral interests are capitalized as intangible assets when acquired. These acquired interests are tested for impairment on a regular basis, property-by-property, based on the results of the exploratory activity and the management’s evaluation.

In the event of a discovery, the unproved mineral interests are transferred to proved mineral interests at their net book value as soon as proved reserves are booked.

Exploratory wells are tested for impairment on a well-by-well basis and accounted for as follows:

•		Costs of exploratory wells which result in proved reserves are capitalized and then depreciated using the unit-of-production method based on proved developed reserves;

•		Costs of dry exploratory wells and wells that have not found proved reserves are charged to expense;

•		Costs of exploratory wells are temporarily capitalized until a determination is made as to whether the well has found proved reserves if both of the following conditions are met:

	•		The well has found a sufficient quantity of reserves to justify its completion as a producing well, if appropriate, assuming that the required capital expenditures are made;

	•		The Group is making sufficient progress assessing the reserves and the economic and operating viability of the project. This progress is evaluated on the basis of indicators such as whether additional exploratory works are under way or firmly planned (wells, seismic or significant studies), whether costs are being incurred for development studies and whether the Group is waiting for governmental or other third-party authorization of a proposed project, or availability of capacity on an existing transport or processing facility.

Costs of exploratory wells not meeting these conditions are charged to expense.

(ii) Oil and Gas producing assets

Development costs incurred for the drilling of development wells and for the construction of production facilities are capitalized, together with borrowing costs incurred during the period of construction and the present value of estimated future costs of asset retirement obligations. The depletion rate is usually equal to the ratio of oil and gas production for the period to proved developed reserves (unit-of-production method).

With respect to production sharing contracts, this computation is based on the portion of production and reserves assigned to the Group taking into account estimates based on the contractual clauses regarding the reimbursement of exploration, development and production costs (cost oil) as well as the sharing of hydrocarbon rights (profit oil).

Transportation assets are depreciated using the unit-of-production method based on throughput or by using the straight-line method whichever best reflects the economic life of the asset.

Proved mineral interests are depreciated using the unit-of-production method based on proved reserves.

Page 9

(iii) Mining activity

Before an assessment can be made on the existence of resources, exploration costs, including studies and core drilling campaigns as a whole, are expensed.

When the assessment concludes that resources exist, the costs engaged subsequently to this assessment are capitalized temporarily while waiting for the field final development decision, if a positive decision is highly probable. Otherwise, these costs are expensed.

Once the development decision is taken, the predevelopment costs capitalized temporarily are integrated with the cost of development and depreciated from the start of production at the same pace than development assets.

Mining development costs include the initial stripping costs and all costs incurred to access resources, and particularly the costs of:

	•		Surface infrastructures;

	•		Machinery and mobile equipment which are significantly costly;

	•		Utilities and off-sites.

These costs are capitalized and depreciated either on a straight line basis or depleted using the UOP method from the start of production.

I) Goodwill and other intangible assets excluding mineral interests

Other intangible assets include goodwill, patents, trademarks, and lease rights.

Intangible assets are carried at cost, after deducting any accumulated depreciation and accumulated impairment losses.

Guidance for calculating goodwill is presented in Note 1 paragraph B to the Consolidated Financial Statements. Goodwill is not amortized but is tested for impairment annually or as soon as there is any indication of impairment (see Note 1 paragraph L to the Consolidated Financial Statements).

In equity affiliates, goodwill is included in the investment book value.

Other intangible assets (except goodwill) have a finite useful life and are amortized on a straight-line basis over 3 to 20 years depending on the useful life of the assets.

Research and development

Research costs are charged to expense as incurred.

Development expenses are capitalized when the following can be demonstrated:

•		the technical feasibility of the project and the availability of the adequate resources for the completion of the intangible asset;

•		the ability of the asset to generate probable future economic benefits;

•		the ability to measure reliably the expenditures attributable to the asset; and

•		the feasibility and intention of the Group to complete the intangible asset and use or sell it.

Advertising costs are charged to expense as incurred.

J) Other property, plant and equipment

Other property, plant and equipment are carried at cost, after deducting any accumulated depreciation and accumulated impairment losses. This cost includes borrowing costs directly attributable to the acquisition or production of a qualifying asset incurred until assets are placed in service. Borrowing costs are capitalized as follows:

	•		if the project benefits from a specific funding, the capitalization of borrowing costs is based on the borrowing rate;

	•		if the project is financed by all the Group’s debt, the capitalization of borrowing costs is based on the weighted average borrowing cost for the period.

Routine maintenance and repairs are charged to expense as incurred. The costs of major turnarounds of refineries and large petrochemical units are capitalized as incurred and depreciated over the period of time between two consecutive major turnarounds.

Page 10

Other property, plant and equipment are depreciated using the straight-line method over their useful lives, which are as follows:


•	Furniture, office equipment, machinery and tools	3-12 years

•	Transportation equipments	5-20 years

•	Storage tanks and related equipment	10-15 years

•	Specialized complex installations and pipelines	10-30 years

•	Buildings	10-50 years

K) Leases

A finance lease transfers substantially all the risks and rewards incidental to ownership from the lessor to the lessee. These contracts are capitalized as assets at fair value or, if lower, at the present value of the minimum lease payments according to the contract. A corresponding financial debt is recognized as a financial liability. These assets are depreciated over the corresponding useful life used by the Group.

Leases that are not finance leases as defined above are recorded as operating leases.

Certain arrangements do not take the legal form of a lease but convey the right to use an asset or a group of assets in return for fixed payments. Such arrangements are accounted for as leases and are analyzed to determine whether they should be classified as operating leases or as finance leases.

L) Impairment of long-lived assets

The recoverable amounts of intangible assets and property, plant and equipment are tested for impairment as soon as any indication of impairment exists. This test is performed at least annually for goodwill.

The recoverable amount is the higher of the fair value (less costs to sell) or its value in use.

Assets are grouped into cash-generating units (or CGUs) and tested. A cash-generating unit is a homogeneous group of assets that generates cash inflows that are largely independent of the cash inflows from other groups of assets.

The value in use of a CGU is determined by reference to the discounted expected future cash flows, based upon the management’s expectation of future economic and operating conditions. If this value is less than the carrying amount, an impairment loss on property, plant and equipment and mineral interests, or on other intangible assets, is recognized either in “Depreciation, depletion and amortization of property, plant and equipment and mineral interests” or in “Other expense”, respectively. This impairment loss is first allocated to reduce the carrying amount of any goodwill.

Impairment losses recognized in prior periods can be reversed up to the original carrying amount, had the impairment loss not been recognized. Impairment losses recognized for goodwill cannot be reversed.

M) Financial assets and liabilities

Financial assets and liabilities are financial loans and receivables, investments in non-consolidated companies, publicly traded equity securities, derivatives instruments and current and non-current financial liabilities.

The accounting treatment of these financial assets and liabilities is as follows:

(i) Loans and receivables

Financial loans and receivables are recognized at amortized cost. They are tested for impairment, by comparing the carrying amount of the assets to estimates of the discounted future recoverable cash flows. These tests are conducted as soon as there is any evidence that their fair value is less than their carrying amount, and at least annually. Any impairment loss is recorded in the statement of income.

(ii) Other investments

These assets are classified as financial assets available for sale and therefore measured at their fair value. For listed securities, this fair value is equal to the market price. For unlisted securities, if the fair value is not reliably determinable, securities are recorded at their historical value. Changes in fair value are recorded in shareholders’ equity. If there is any evidence of a significant or long-lasting impairment loss, a loss is recorded in the Statement of Income. This impairment is reversed in the statement of income only when the securities are sold.

(iii) Derivative instruments

The Group uses derivative instruments to manage its exposure to risks of changes in interest rates, foreign exchange rates and commodity prices. Changes in fair value of derivative instruments are recognized in the statement of income or in shareholders’ equity and are recognized in the balance sheet in the accounts corresponding to their nature,

Page 11

according to the risk management strategy described in Note 31 to the Consolidated Financial Statements. The derivative instruments used by the Group are the following:

•

Cash management

Financial instruments used for cash management purposes are part of a hedging strategy of currency and interest rate risks within global limits set by the Group and are considered to be used for transactions (held for trading). Changes in fair value are systematically recorded in the statement of income. The balance sheet value of those instruments is included in “Current financial assets” or “Other current financial liabilities”.

•

Long-term financing

When an external long-term financing is set up, specifically to finance subsidiaries, and when this financing involves currency and interest rate derivatives, these instruments are qualified as:

	i.		Fair value hedge of the interest rate risk on the external debt and of the currency risk of the loans to subsidiaries. Changes in fair value of derivatives are recognized in the statement of income as are changes in fair value of underlying financial debts and loans to subsidiaries.

			The fair value of those hedging instruments of long-term financing is included in the assets under “Hedging instruments on non-current financial debt” or in the liabilities under “Non-current financial debt “for the non-current portion. The current portion (less than one year) is accounted for in “Current financial assets” or “Other current financial liabilities”.

			In case of the anticipated termination of derivative instruments accounted for as fair value hedges, the amount paid or received is recognized in the statement of income and:

	•		If this termination is due to an early cancellation of the hedged items, the adjustment previously recorded as revaluation of those hedged items is also recognized in the statement of income;

	•		If the hedged items remain in the balance sheet, the adjustment previously recorded as a revaluation of those hedged items is spread over the remaining life of those items.

	ii.		Cash flow hedge of the currency risk of the external debt. Changes in fair value are recorded in equity for the effective portion of the hedging and in the statement of income for the ineffective portion of the hedging. Amounts recorded in equity are transferred to the income statement when the hedged transaction affects profit or loss.

			The fair value of those hedging instruments of long-term financing is included in the assets under “Hedging instruments on non-current financial debt” or in the liabilities under “Non-current financial debt” for the non-current portion. The current portion (less than one year) is accounted for in “Current financial assets” or “Other current financial liabilities”.

			If the hedging instrument expires, is sold or terminated by anticipation, gains or losses previously recognized in equity remain in equity. Amounts are recycled in the income statement only when the hedged transaction affects profit or loss.

•

Foreign subsidiaries’ equity hedge

Certain financial instruments hedge against risks related to the equity of foreign subsidiaries whose functional currency is not the euro (mainly the dollar). These instruments qualify as “net investment hedges”. Changes in fair value are recorded in shareholders’ equity.

The fair value of these instruments is recorded under “Current financial assets” or “Other current financial liabilities”.

•

Financial instruments related to commodity contracts

Financial instruments related to commodity contracts, including crude oil, petroleum products, gas, power and coal purchase/sales contracts within the trading activities, together with the commodity contract derivative instruments such as energy contracts and forward freight agreements, are used to adjust the Group’s exposure to price fluctuations within global trading limits. These instruments are considered, according to the industry practice, as held for trading. Changes in fair value are recorded in the statement of income. The fair value of these instruments is recorded in “Other current assets” or “Other creditors and accrued liabilities” depending on whether they are assets or liabilities.

Detailed information about derivatives positions is disclosed in Notes 20, 28, 29, 30 and 31 to the Consolidated Financial Statements.

(iv) Current and non-current financial liabilities

Current and non-current financial liabilities (excluding derivatives) are recognized at amortized cost, except those for which a hedge accounting can be applied as described in the previous paragraph.

Page 12

(v) Fair value of financial instruments

Fair values are estimated for the majority of the Group’s financial instruments, with the exception of publicly traded equity securities and marketable securities for which the market price is used.

Estimated fair values, which are based on principles such as discounting future cash flows to present value, must be weighted by the fact that the value of a financial instrument at a given time may be influenced by the market environment (liquidity especially), and also the fact that subsequent changes in interest rates and exchange rates are not taken into account.

As a consequence, the use of different estimates, methodologies and assumptions could have a material effect on the estimated fair value amounts.

The methods used are as follows:

•

Financial debts, swaps

The market value of swaps and of bonds that are hedged by those swaps has been determined on an individual basis by discounting future cash flows with the zero coupon interest rate curves existing at year-end.

•

Financial instruments related to commodity contracts

The valuation methodology is to mark to market all open positions for both physical and derivative transactions. The valuations are determined on a daily basis using observable market data based on organized and over the counter (OTC) markets. In particular cases when market data are not directly available, the valuations are derived from observable data such as arbitrages, freight or spreads and market corroboration. For valuation of risks which are the result of a calculation, such as options for example, commonly known models are used to compute the fair value.

•

Other financial instruments

The fair value of the interest rate swaps and of FRA (Forward Rate Agreement) are calculated by discounting future cash flows on the basis of zero coupon interest rate curves existing at year-end after adjustment for interest accrued but unpaid.

Forward exchange contracts and currency swaps are valued on the basis of a comparison of the negociated forward rates with the rates in effect on the financial markets at year-end for similar maturities.

Exchange options are valued based on the Garman-Kohlhagen model including market quotations at year-end.

•

Fair value hierarchy

IFRS 7 “Financial instruments: disclosures”, amended in 2009, introduces a fair value hierarchy for financial instruments and proposes the following three-level classification :

	•		level 1: quotations for assets and liabilities (identical to the ones that are being valued) obtained at the valuation date on an active market to which the entity has access;

	•		level 2: the entry data are observable data but do not correspond to quotations for identical assets or liabilities;

	•		level 3: the entry data are not observable data. For example: these data come from extrapolation. This level applies when there is no market or observable data and the company has to use its own hypotheses to estimate the data that other market players would have used to determine the fair value of the asset.

Fair value hierarchy is disclosed in Notes 29 and 30 to the Consolidated Financial Statements.

N) Inventories

Inventories are measured in the Consolidated Financial Statements at the lower of historical cost or market value. Costs for petroleum and petrochemical products are determined according to the FIFO (First-In, First-Out) method and other inventories are measured using the weighted-average cost method.

Downstream (Refining — Marketing)

Petroleum product inventories are mainly comprised of crude oil and refined products. Refined products principally consist of gasoline, kerosene, diesel, fuel oil and heating oil produced by the Group’s refineries. The turnover of petroleum products does not exceed two months on average.

Crude oil costs include raw material and receiving costs. Refining costs principally include the crude oil costs, production costs (energy, labor, depreciation of producing assets) and allocation of production overhead (taxes, maintenance, insurance, etc.). Start-up costs and general administrative costs are excluded from the cost price of refined products.

Chemicals

Page 13

Costs of chemical products inventories consist of raw material costs, direct labor costs and an allocation of production overhead. Start-up costs and general administrative costs are excluded from the cost of inventories of chemicals products.

O) Treasury shares

Treasury shares of the parent company held by its subsidiaries or itself are deducted from consolidated shareholders’ equity. Gains or losses on sales of treasury shares are excluded from the determination of net income and are recognized in shareholders’ equity.

P) Provisions and other non-current liabilities

Provisions and non-current liabilities are comprised of liabilities for which the amount and the timing are uncertain. They arise from environmental risks, legal and tax risks, litigation and other risks.

A provision is recognized when the Group has a present obligation (legal or constructive) as a result of a past event for which it is probable that an outflow of resources will be required and when a reliable estimate can be made regarding the amount of the obligation. The amount of the liability corresponds to the best possible estimate.

Q) Asset retirement obligations

Asset retirement obligations, which result from a legal or constructive obligation, are recognized based on a reasonable estimate in the period in which the obligation arises.

The associated asset retirement costs are capitalized as part of the carrying amount of the underlying asset and depreciated over the useful life of this asset.

An entity is required to measure changes in the liability for an asset retirement obligation due to the passage of time (accretion) by applying a risk-free discount rate to the amount of the liability. The increase of the provision due to the passage of time is recognized as “Other financial expense”.

R) Employee benefits

In accordance with the laws and practices of each country, the Group participates in employee benefit plans offering retirement, death and disability, healthcare and special termination benefits. These plans provide benefits based on various factors such as length of service, salaries, and contributions made to the governmental bodies responsible for the payment of benefits.

These plans can be either defined contribution or defined benefit pension plans and may be entirely or partially funded with investments made in various non-Group instruments such as mutual funds, insurance contracts, and other instruments.

For defined contribution plans, expenses correspond to the contributions paid.

Defined benefit obligations are determined according to the Projected Unit Method. Actuarial gains and losses may arise from differences between actuarial valuation and projected commitments (depending on new calculations or assumptions) and between projected and actual return of plan assets.

The Group applies the corridor method to amortize its actuarial gains and losses. This method amortizes the net cumulative actuarial gains and losses that exceed 10% of the greater of the present value of the defined benefit obligation and the fair value of plan assets at the opening balance sheet date, over the average expected remaining working lives of the employees participating in the plan.

In case of a change in or creation of a plan, the vested portion of the cost of past services is recorded immediately in the statement of income, and the unvested past service cost is amortized over the vesting period.

The net periodic pension cost is recognized under “Other operating expenses”.

S) Consolidated Statement of Cash Flows

The Consolidated Statement of Cash Flows prepared in foreign currencies has been translated into euros using the exchange rate on the transaction date or the average exchange rate for the period. Currency translation differences arising from the translation of monetary assets and liabilities denominated in foreign currency into euros using the closing exchange rates are shown in the Consolidated Statement of Cash Flows under “Effect of exchange rates”. Therefore, the Consolidated Statement of Cash Flows will not agree with the figures derived from the Consolidated Balance Sheet.

Page 14

Cash and cash equivalents

Cash and cash equivalents are comprised of cash on hand and highly liquid short-term investments that are easily convertible into known amounts of cash and are subject to insignificant risks of changes in value.

Investments with maturity greater than three months and less than twelve months are shown under “Current financial assets”.

Changes in current financial assets and liabilities are included in the financing activities section of the Consolidated Statement of Cash Flows.

Non-current financial debt

Changes in non-current financial debt are presented as the net variation to reflect significant changes mainly related to revolving credit agreements.

T) Carbon dioxide emission rights

In the absence of a current IFRS standard or interpretation on accounting for emission rights of carbon dioxide, the following principles have been applied:

	•		emission rights granted free of charge are accounted for at zero carrying amount;

	•		liabilities resulting from potential differences between available quotas and quotas to be delivered at the end of the compliance period are accounted for as liabilities and measured at fair market value;

	•		spot market transactions are recognized in income at cost; and

	•		forward transactions are recognized at their fair market value on the face of the balance sheet. Changes in the fair value of such forward transactions are recognized in income.

U) Non-current assets held for sale and discontinued operations

Pursuant to IFRS 5 “Non-current assets held for sale and discontinued operations”, assets and liabilities of affiliates that are held for sale are presented separately on the face of the balance sheet.

Net income from discontinued operations is presented separately on the face of the statement of income. Therefore, the notes to the Consolidated Financial Statements related to the statement of income only refer to continuing operations.

A discontinued operation is a component of the Group for which cash flows are independent. It represents a major line of business or geographical area of operations which has been disposed of or is currently being held for sale.

V) Alternative IFRS methods

For measuring and recognizing assets and liabilities, the following choices among alternative methods allowable under IFRS have been made:

•		property, plant and equipment, and intangible assets are measured using historical cost model instead of revaluation model;

•		actuarial gains and losses on pension and other post-employment benefit obligations are recognized according to the corridor method (see Note 1 paragraph R to the Consolidated Financial Statements);

•		jointly-controlled entities are consolidated under the equity method, as provided for in the alternative method of IAS 31 “Interests in joint ventures”, as from January 1^st, 2010.

W) New accounting principles not yet in effect

The standards or interpretations published respectively by the International Accounting Standards Board (IASB) and the International Financial Reporting Interpretations Committee (IFRIC) which were not yet in effect at December 31, 2010, were as follows:

IFRS 9 “Financial Instruments”

In November 2009, the IASB issued standard IFRS 9 “Financial Instruments” that introduces new requirements for the classification and measurement of financial assets, and included in October 2010 requirements regarding classification and measurement of financial liabilities. This standard shall be completed with texts on impairment and hedge accounting. Under standard IFRS 9, financial assets and liabilities are generally measured either at fair value through profit or loss or at amortised cost if certain conditions are met. The standard is applicable for annual periods starting

Page 15

on or after January 1, 2013. The application of the standard as published in 2010 should not have any material effect on the Group’s consolidated balance sheet, statement of income and shareholder’s equity.

Revised IAS 24 “Related Party Disclosures”

In November 2009, the IASB issued revised standard IAS 24 “Related Party Disclosures” that clarifies the definition of a related party and reduces the disclosure requirements for entities controlled by a government. The standard is applicable for annual periods starting on or after January 1, 2011. The application of this standard should not have any material impact on information presented in the notes to the Consolidated Financial Statements.

IFRIC 19 “Extinguishing Financial Liabilities with Equity Instruments”

In November 2009, the IFRIC issued interpretation IFRIC 19 “Extinguishing Financial Liabilities with Equity Instruments”. The interpretation deals with accounting for debt to equity swaps. It clarifies that equity instruments issued are measured at fair value and that any difference with the carrying amount of the liability is recognised in profit or loss. The interpretation is effective for annual periods starting on or after July 1, 2010 (i.e. starting January 1, 2011 for the Group). The application of IFRIC 19 should not have any material effect on the Group’s consolidated balance sheet, statement of income and shareholder’s equity.

2) Main indicators — information by business segment

Performance indicators excluding the adjustment items, such as adjusted operating income, adjusted net operating income, and adjusted net income are meant to facilitate the analysis of the financial performance and the comparison of income between periods.

Adjustment items

The detail of these adjustment items is presented in Note 4 to the Consolidated Financial Statements.

Adjustment items include :

(i) Special items

Due to their unusual nature or particular 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, transactions such as restructuring costs or assets disposals, which are not considered to be representative of the normal course of business, may be qualified as special items although they may have occurred within prior years or are likely to occur again within the coming years.

(ii) The inventory valuation effect

The adjusted results of the Downstream and Chemicals segments are presented according to the replacement cost method. This method is used to assess the segments’ performance and facilitate the comparability of the segments’ performance with those of its competitors.

In the replacement cost method, which approximates the LIFO (Last-In, First-Out) method, the variation of inventory values in the statement of income is, depending on the nature of the inventory, determined using either the month-end prices differential between one period and another or the average prices of the period rather than the historical value. The inventory valuation effect is the difference between the results according to the FIFO (First-In, First-Out) and the replacement cost.

(iii)

Until June 30, 2010, TOTAL’s equity share of adjustment items reconciling “Business net income” to Net income attributable to equity holders of Sanofi-Aventis (see Note 3, paragraph on the sales of Sanofi-Aventis shares and loss of significant influence over Sanofi-Aventis)

Main indicators:

(i)

Operating income (measure used to evaluate operating performance)

Revenue from sales after deducting cost of goods sold and inventory variations, other operating expenses, exploration expenses and depreciation, depletion, and amortization.

Operating income excludes the amortization of intangible assets other than mineral interests, currency translation adjustments and gains or losses on the disposal of assets.

(ii)

Net operating income (measure used to evaluate the return on capital employed)

Operating income after taking into account the amortization of intangible assets other than mineral interests, currency translation adjustments, gains or losses on the disposal of assets, as well as all other income and expenses related to capital employed (dividends from non-consolidated companies, equity in income of affiliates, capitalized interest expenses), and after income taxes applicable to the above.

The only income and expense not included in net operating income but included in net income are interest expenses related to net financial debt, after applicable income taxes (net cost of net debt) and minority interests.

Page 16

(iii)

Adjusted income

Operating income, net operating income, or net income excluding the effect of adjustment items described above.

(iv)

Fully-diluted adjusted earnings per share

Adjusted net income divided by the fully-diluted weighted-average number of common shares.

(v)

Capital employed

Non-current assets and working capital, at replacement cost, net of deferred income taxes and non-current liabilities.

(vi)

ROACE (Return on Average Capital Employed)

Ratio of adjusted net operating income to average capital employed between the beginning and the end of the period.

(vii)

Net debt

Non-current debt, including current portion, current borrowings, other current financial liabilities less cash and cash equivalents and other current financial assets.

3) Changes in the Group structure, main acquisitions and divestments

During 2010, 2009 and 2008, main changes in the Group structure and main acquisitions and divestments were as follows:

2010

•

Upstream

	•		Total E&P Canada Ltd., a TOTAL subsidiary, signed in July 2010 an agreement with UTS Energy Corporation (UTS) to acquire UTS Corporation with its main asset, a 20% interest in the Fort Hills mining project in the Athabasca region of the Canadian province of Alberta.

			Total E&P Canada completed on September 30, 2010 the acquisition of all UTS shares for a cash amount of 3.08 Canadian dollars per share. Taking into account the cash held by UTS and acquired by TOTAL (€232 million), the cost of the acquisition for TOTAL amounts to €862 million. This amount mainly represents the value of mineral interests that have been recognized as intangible assets on the face of the Consolidated Balance Sheet for €646 million and the value of tangible assets that have been recognized on the face of the Consolidated Balance Sheet for €217 million.

	•		TOTAL completed in September 2010 an agreement for the sale to BP and Hess of its interests in the Valhall (15.72%) and Hod (25%) fields, in the Norwegian North Sea, for an amount of €800 million.

	•		TOTAL signed in September 2010 an agreement with Santos and Petronas to acquire a 20% interest in the GLNG project in Australia. Upon completion of this transaction finalised in October 2010, the project brings together Santos (45%, operator), Petronas (35%) and TOTAL (20%).

			The acquisition cost amounts to €566 million and it mainly represents the value of mineral interests that have been recognized as intangible assets on the face of the Consolidated Balance Sheet for €617 million.

			In addition, TOTAL announced in December 2010 the signature of an agreement to acquire an additional 7.5% interest in this project (see Note 34 to the Consolidated Financial Statements).

	•		TOTAL sold in December 2010 its 5% interest in Block 31, located in the Angolan ultra deep offshore, to the company China Sonangol International Holding Limited.

•

Downstream

•

TOTAL and ERG announced in January 2010 that they have signed an agreement to create a joint venture, named TotalErg, by contribution of the major part of their activities in the refining and marketing business in Italy. TotalErg has been operational since October 1^st, 2010. The shareholder pact calls for joint governance as well as operating independence for the new entity. TOTAL’s interest in TotalErg is 49% and is accounted for by the equity method (see Note 12 to the Consolidated Financial Statements).

•

Chemicals

•

TOTAL closed on April 1, 2010 the sale of its consumer specialty chemicals business, Mapa Spontex, to U.S.-based Jarden Corporation for an enterprise value of €335 million.

•

Corporate

•

On March 24, 2010, TOTAL S.A. filed a public tender offer followed by a squeeze out with the French Autorité des Marchés Financiers (AMF) in order to buy the 1,468,725 Elf Aquitaine shares that it did not already hold, representing 0.52% of Elf Aquitaine’s share capital and 0.27% of its voting rights, at a price of

Page 17

			€305 per share (including the remaining 2009 dividend). On April 13, 2010, the French Autorité des marchés financiers (AMF) issued its clearance decision for this offer.

			The public tender offer was open from April 16 to April 29, 2010 inclusive. The Elf Aquitaine shares targeted by the offer which were not tendered to the offer have been transferred to TOTAL S.A. under the squeeze out upon payment to the shareholders equal to the offer price on the first trading day after the offer closing date, i.e. on April 30, 2010.

			On April 30, 2010, TOTAL S.A. announced that, following the squeeze out, it held 100% of Elf Aquitaine shares, with the transaction amounting to €450 million.

			In application of revised standard IAS 27 “Consolidated and Separate Financial Statements”, effective for annual periods beginning on or after January 1, 2010, transactions with minority interests are accounted for as equity transactions, i.e. in consolidated shareholder’s equity.

			As a consequence, following the squeeze out of the Elf Aquitaine shares by TOTAL S.A., the difference between the consideration paid and the book value of minority interests acquired was recognized directly as a decrease in equity.

	•		During 2010, TOTAL progressively sold 1.88% of Sanofi-Aventis’ share capital, thus reducing its interest to 5.51%.

			As from July 1, 2010, given its reduced representation on the Board of Directors and the decrease in the percentage of voting rights, TOTAL ceases to have a significant influence over Sanofi-Aventis and no longer consolidates this investment under the equity method. The investment in Sanofi-Aventis is accounted for as a financial asset available for sale in the line “Other investments” of the balance sheet at its fair value, i.e. at the stock price.

			Net income as of December 31, 2010 includes a €135 million gain relating to this change in the accounting treatment.

2009

•

Upstream

•

In December 2009, TOTAL signed an agreement with Chesapeake Energy Corporation whereby Total acquired a 25% share in Chesapeake’s Barnett shale gas portfolio located in the United States (State of Texas). The acquisition cost of these assets amounted to €1,562 million and it represented the value of mineral interests that have been recognized as intangible assets on the face of the Consolidated Balance Sheet for €1,449 million and the value of tangible assets that have been recognized on the face of the Consolidated Balance Sheet for €113 million. As no cash payment has occurred in 2009, a corresponding debt has been recognized in the sections “Provisions and other non-current liabilities” and “Other creditors and accrued liabilities” for €818 million and €744 million respectively.

•

Corporate

•

During 2009, TOTAL progressively sold 3.99% of Sanofi-Aventis’ share capital, thus reducing its interest to 7.39%. Sanofi-Aventis is accounted for by the equity method in TOTAL’s Consolidated Financial Statements for the year ended December 31, 2009.

2008

•

Upstream

	•		Pursuant to the tender offer described in the prospectus on May 13, 2008 and renewed by the notices on June 19, July 4 and July 16, 2008, TOTAL acquired 100% of Synenco Energy Inc’s Class A ordinary shares. Synenco’s main asset is a 60% interest in the Northern Lights project in the Athabasca region of the Canadian province of Alberta.

			The acquisition cost, net of cash acquired (€161 million) for all shares amounted to €352 million. This cost essentially represented the value of the company’s mineral interests that have been recognized as intangible assets on the face of the Consolidated Balance Sheet for €221 million.

			Synenco Energy Inc. is fully consolidated in TOTAL’s Consolidated Financial Statements. Its contribution to the consolidated net income for fiscal year 2008 was not material.

	•		In August 2008, TOTAL acquired the Dutch company Goal Petroleum BV. The acquisition cost amounted to €349 million. This cost essentially represented the value of the company’s mineral interests that have been recognized as intangible assets on the face of the Consolidated Balance Sheet for €292 million.

			Goal Petroleum BV is fully consolidated in TOTAL’s Consolidated Financial Statements. Its contribution to the consolidated net income for fiscal year 2008 was not material.

Page 18

•

Pursuant to the agreements signed between the partners in November 2008, the Group’s participation in the Kashagan field decreased from 18.52% to 16.81%.

•

Corporate

•

During 2008, TOTAL progressively sold 1.68% of Sanofi-Aventis’ share capital, thus reducing its interest to 11.38%. Sanofi-Aventis is accounted for by the equity method in TOTAL’s Consolidated Financial Statements for the year ended December 31, 2008.

4) Business segment information

Financial information by business segment is reported in accordance with the internal reporting system and shows internal segment information that is used to manage and measure the performance of TOTAL. The Group’s activities are conducted through three business segments: Upstream, Downstream and Chemicals.

	•		the Upstream segment includes the activities of the Exploration & Production division and the Gas & Power division;

	•		the Downstream segment includes activities of the Refining & Marketing division and the Trading & Shipping division; and

	•		the Chemicals segment includes Base Chemicals and Specialties.

The Corporate segment includes the operating and financial activities of the holding companies (including the investment in Sanofi-Aventis).

The operational profit and assets are broken down by business segment prior to the consolidation and inter-segment adjustments.

Sales prices between business segments approximate market prices.

Page 19

A) Information by business segment


For the year ended December 31, 2010
(M€)	Upstream			Downstream			Chemicals			Corporate			Intercompany			Total

Non-Group sales		18,527			123,245			17,490			7			—			159,269
Intersegment sales		22,540			4,693			981			186			(28,400	)		—
Excise taxes		—			(18,793	)		—			—			—			(18,793	)

Revenues from sales		41,067			109,145			18,471			193			(28,400	)		140,476
Operating expenses		(18,271	)		(105,660	)		(16,974	)		(665	)		28,400			(113,170	)
Depreciation, depletion and amortization of tangible assets and mineral interests		(5,346	)		(2,503	)		(533	)		(39	)		—			(8,421	)

Operating income		17,450			982			964			(511	)		—			18,885
Equity in income (loss) of affiliates and other items		1,533			141			215			595			—			2,484
Tax on net operating income		(10,131	)		(201	)		(267	)		263			—			(10,336	)

Net operating income		8,852			922			912			347			—			11,033
Net cost of net debt																	(226	)
Minority interests																	(236	)

Net income																	10,571


For the year ended December 31, 2010
(adjustments^(a))
(M€)	Upstream			Downstream			Chemicals			Corporate			Intercompany	Total

Non-Group sales
Intersegment sales
Excise taxes

Revenues from sales
Operating expenses		—			923			92			—				1,015
Depreciation, depletion and amortization of tangible assets and mineral interests		(203	)		(1,192	)		(21	)		—				(1,416	)

Operating income ^(b)		(203	)		(269	)		71			—				(401	)
Equity in income (loss) of affiliates and other items ^(c)		183			(126	)		(16	)		227				268
Tax on net operating income		275			149			—			(6	)			418

Net operating income^(b)		255			(246	)		55			221				285
Net cost of net debt															—
Minority interests															(2	)

Net income															283


(a)		Adjustments include special items, inventory valuation effect and, until June 30, 2010, equity share of adjustments related to Sanofi-Aventis.


	Upstream		Downstream		Chemicals		Corporate
(b) Of which inventory valuation effect
on operating income		—		863		130		—
on net operating income		—		640		113		—
(c) Of which equity share of adjustments related to Sanofi-Aventis		—		—		—		(81	)

Page 20


For the year ended December 31, 2010 (adjusted)
(M€)^(a)	Upstream			Downstream			Chemicals			Corporate			Intercompany			Total

Non-Group sales		18,527			123,245			17,490			7			—			159,269
Intersegment sales		22,540			4,693			981			186			(28,400	)		—
Excise taxes		—			(18,793	)		—			—			—			(18,793	)

Revenues from sales		41,067			109,145			18,471			193			(28,400	)		140,476
Operating expenses		(18,271	)		(106,583	)		(17,066	)		(665	)		28,400			(114,185	)
Depreciation, depletion and amortization of tangible assets and mineral interests		(5,143	)		(1,311	)		(512	)		(39	)		—			(7,005	)

Adjusted operating income		17,653			1,251			893			(511	)		—			19,286
Equity in income (loss) of affiliates and other items		1,350			267			231			368			—			2,216
Tax on net operating income		(10,406	)		(350	)		(267	)		269			—			(10,754	)

Adjusted net operating income		8,597			1,168			857			126			—			10,748
Net cost of net debt																	(226	)
Minority interests																	(234	)

Adjusted net income																	10,288

Adjusted fully-diluted earnings per share (€)																	4.58


(a)		Except for earnings per share


For the year ended December 31, 2010
(M€)	Upstream			Downstream			Chemicals			Corporate			Intercompany	Total

Total expenditures		13,208			2,343			641			81				16,273
Total divestments		2,067			499			347			1,403				4,316
Cash flow from operating activities		15,573			1,441			934			545				18,493
Balance sheet as of December 31, 2010
Property, plant and equipment, intangible assets, net		50,565			8,675			4,388			253				63,881
Investments in equity affiliates		5,002			2,782			1,349			—				9,133
Loans to equity affiliates and other non-current assets		4,184			1,366			979			4,099				10,628
Working capital		(363	)		9,154			2,223			(211	)			10,803
Provisions and other non-current liabilities		(16,076	)		(2,328	)		(1,631	)		(1,181	)			(21,216	)
Assets and liabilities classified as held for sale		660			—			413			—				1,073
Capital Employed (balance sheet)		43,972			19,649			7,721			2,960				74,302
Less inventory valuation effect		—			(4,088	)		(409	)		1,061				(3,436	)
Capital Employed (Business segment information)		43,972			15,561			7,312			4,021				70,866
ROACE as a percentage		21	%		8	%		12	%						16	%

Page 21


For the year ended December 31, 2009
(M€)	Upstream			Downstream			Chemicals			Corporate			Intercompany			Total

Non-Group sales		16,072			100,518			14,726			11			—			131,327
Intersegment sales		15,958			3,786			735			156			(20,635	)		—
Excise taxes		—			(19,174	)		—			—			—			(19,174	)

Revenues from sales		32,030			85,130			15,461			167			(20,635	)		112,153
Operating expenses		(14,752	)		(81,281	)		(14,293	)		(656	)		20,635			(90,347	)
Depreciation, depletion and amortization of tangible assets and mineral interests		(4,420	)		(1,612	)		(615	)		(35	)		—			(6,682	)

Operating income		12,858			2,237			553			(524	)		—			15,124
Equity in income (loss) of affiliates and other items		846			169			(58	)		697			—			1,654
Tax on net operating income		(7,486	)		(633	)		(92	)		326			—			(7,885	)

Net operating income		6,218			1,773			403			499			—			8,893
Net cost of net debt																	(264	)
Minority interests																	(182	)

Net income																	8,447


For the year ended December 31, 2009
(adjustments^(a))
(M€)	Upstream			Downstream			Chemicals			Corporate			Intercompany	Total

Non-Group sales
Intersegment sales
Excise taxes

Revenues from sales
Operating expenses		(17	)		1,558			344			—				1,885
Depreciation, depletion and amortization of tangible assets and mineral interests		(4	)		(347	)		(40	)		—				(391	)

Operating income ^(b)		(21	)		1,211			304			—				1,494
Equity in income (loss) of affiliates and other items ^(c)		(160	)		22			(123	)		(117	)			(378	)
Tax on net operating income		17			(413	)		(50	)		(3	)			(449	)

Net operating income^(b)		(164	)		820			131			(120	)			667
Net cost of net debt															—
Minority interests															(4	)

Net income															663


(a)		Adjustments include special items, inventory valuation effect and equity share of adjustments related to Sanofi-Aventis.


	Upstream		Downstream		Chemicals		Corporate
(b) Of which inventory valuation effect
on operating income		—		1,816		389		—
on net operating income		—		1,285		254		—
(c) Of which equity share of adjustments related to Sanofi-Aventis		—		—		—		(300	)

Page 22


For the year ended December 31, 2009 (adjusted)
(M€) ^(a)	Upstream			Downstream			Chemicals			Corporate			Intercompany			Total

Non-Group sales		16,072			100,518			14,726			11			—			131,327
Intersegment sales		15,958			3,786			735			156			(20,635	)		—
Excise taxes		—			(19,174	)		—			—			—			(19,174	)

Revenues from sales		32,030			85,130			15,461			167			(20,635	)		112,153
Operating expenses		(14,735	)		(82,839	)		(14,637	)		(656	)		20,635			(92,232	)
Depreciation, depletion and amortization of tangible assets and mineral interests		(4,416	)		(1,265	)		(575	)		(35	)		—			(6,291	)

Adjusted operating income		12,879			1,026			249			(524	)		—			13,630

Equity in income (loss) of affiliates and other items		1,006			147			65			814			—			2,032
Tax on net operating income		(7,503	)		(220	)		(42	)		329			—			(7,436	)

Adjusted net operating income		6,382			953			272			619			—			8,226
Net cost of net debt																	(264	)
Minority interests																	(178	)

Adjusted net income																	7,784

Adjusted fully-diluted earnings per share (€)																	3.48


(a)		Except for earnings per share


For the year ended December 31, 2009
(M€)	Upstream			Downstream			Chemicals			Corporate			Intercompany	Total

Total expenditures		9,855			2,771			631			92				13,349
Total divestments		398			133			47			2,503				3,081
Cash flow from operating activities		10,200			1,164			1,082			(86	)			12,360
Balance sheet as of December 31, 2009
Property, plant and equipment, intangible assets, net		43,997			9,588			5,248			271				59,104
Investments in equity affiliates		4,260			2,110			652			4,235				11,257
Loans to equity affiliates and other non-current assets		3,844			1,369			850			547				6,610
Working capital		660			7,624			2,151			58				10,493
Provisions and other non-current liabilities		(15,364	)		(2,190	)		(1,721	)		(1,094	)			(20,369	)
Assets and liabilities classified as held for sale		—			—			—			—				—
Capital Employed (balance sheet)		37,397			18,501			7,180			4,017				67,095
Less inventory valuation effect		—			(3,202	)		(282	)		840				(2,644	)
Capital Employed (Business segment information)		37,397			15,299			6,898			4,857				64,451
ROACE as a percentage		18	%		7	%		4	%						13	%

Page 23


For the year ended December 31, 2008
(M€)	Upstream			Downstream			Chemicals			Corporate			Intercompany			Total

Non-Group sales		24,256			135,524			20,150			46			—			179,976
Intersegment sales		25,132			5,574			1,252			120			(32,078	)		—
Excise taxes		—			(19,645	)		—			—			—			(19,645	)

Revenues from sales		49,388			121,453			21,402			166			(32,078	)		160,331
Operating expenses		(21,915	)		(119,425	)		(20,942	)		(685	)		32,078			(130,889	)
Depreciation, depletion and amortization of tangible assets and mineral interests		(4,005	)		(1,202	)		(518	)		(30	)		—			(5,755	)

Operating income		23,468			826			(58	)		(549	)		—			23,687
Equity in income (loss) of affiliates and other items		1,541			(158	)		(34	)		590			—			1,939
Tax on net operating income		(14,563	)		(143	)		76			315			—			(14,315	)

Net operating income		10,446			525			(16	)		356			—			11,311
Net cost of net debt																	(358	)
Minority interests																	(363	)

Net income																	10,590


For the year ended December 31, 2008
(adjustments^(a))
(M€)	Upstream			Downstream			Chemicals			Corporate			Intercompany	Total

Non-Group sales
Intersegment sales
Excise taxes

Revenues from sales
Operating expenses		—			(2,776	)		(925	)		—				(3,701	)
Depreciation, depletion and amortization of tangible assets and mineral interest		(171	)		—			(6	)		—				(177	)

Operating income ^(b)		(171	)		(2,776	)		(931	)		—				(3,878	)
Equity in income (loss) of affiliates and other items ^(c)		(164	)		(195	)		(82	)		(345	)			(786	)
Tax on net operating income		57			927			329			(2	)			1,311

Net operating income^(b)		(278	)		(2,044	)		(684	)		(347	)			(3,353	)
Net cost of net debt															—
Minority interests															23

Net income															(3,330	)


(a)		Adjustments include special items, inventory valuation effect and equity share of adjustments related to Sanofi-Aventis.


	Upstream		Downstream			Chemicals			Corporate
(b) Of which inventory valuation effect
on operating income		—		(2,776	)		(727	)		—
on net operating income		—		(1,971	)		(504	)		—
(c) Of which equity share of adjustments related to Sanofi-Aventis		—		—			—			(393	)

Page 24


For the year ended December 31, 2008 (adjusted)
(M€)^(a)	Upstream			Downstream			Chemicals			Corporate			Intercompany			Total

Non-Group sales		24,256			135,524			20,150			46			—			179,976
Intersegment sales		25,132			5,574			1,252			120			(32,078	)		—
Excise taxes		—			(19,645	)		—			—			—			(19,645	)

Revenues from sales		49,388			121,453			21,402			166			(32,078	)		160,331
Operating expenses		(21,915	)		(116,649	)		(20,017	)		(685	)		32,078			(127,188	)
Depreciation, depletion and amortization of tangible assets and mineral interests		(3,834	)		(1,202	)		(512	)		(30	)		—			(5,578	)

Adjusted operating income		23,639			3,602			873			(549	)		—			27,565

Equity in income (loss) of affiliates and other items		1,705			37			48			935			—			2,725
Tax on net operating income		(14,620	)		(1,070	)		(253	)		317			—			(15,626	)

Adjusted net operating income		10,724			2,569			668			703			—			14,664
Net cost of net debt																	(358	)
Minority interests																	(386	)

Adjusted net income																	13,920

Adjusted fully-diluted earnings per share (€)																	6.20


(a)		Except for earnings per share


For the year ended December 31, 2008
(M€)	Upstream			Downstream			Chemicals			Corporate			Intercompany	Total

Total expenditures		10,017			2,418			1,074			131				13,640
Total divestments		1,130			216			53			1,186				2,585
Cash flow from operating activities		13,765			3,111			920			873				18,669
Balance sheet as of December 31, 2008
Property, plant and equipment, intangible assets, net		37,090			8,823			5,323			247				51,483
Investments in equity affiliates		3,892			1,958			677			6,134				12,661
Loans to equity affiliates and other non-current assets		3,739			1,170			762			545				6,216
Working capital		570			5,317			2,348			(132	)			8,103
Provisions and other non-current liabilities		(12,610	)		(2,191	)		(1,903	)		(1,138	)			(17,842	)
Assets and liabilities classified as held for sale		—			—			—			—				—
Capital Employed (balance sheet)		32,681			15,077			7,207			5,656				60,621
Less inventory valuation effect		—			(1,454	)		(46	)		387				(1,113	)
Capital Employed (Business segment information)		32,681			13,623			7,161			6,043				59,508
ROACE as a percentage		36	%		20	%		9	%						26	%

Page 25

B) Reconciliation between business segment information and the Consolidated Statement of Income

The table below presents the impact of adjustment items on the Consolidated Statement of Income:


							Consolidated
For the year ended December 31, 2010							statement of
(M€)	Adjusted			Adjustments^(a)			income

Sales		159,269			—			159,269
Excise taxes		(18,793	)		—			(18,793	)
Revenues from sales		140,476			—			140,476

Purchases, net of inventory variation		(94,286	)		1,115			(93,171	)
Other operating expenses		(19,035	)		(100	)		(19,135	)
Exploration costs		(864	)		—			(864	)
Depreciation, depletion and amortization of tangible assets and mineral interests		(7,005	)		(1,416	)		(8,421	)
Other income		524			872			1,396
Other expense		(346	)		(554	)		(900	)

Financial interest on debt		(465	)		—			(465	)
Financial income from marketable securities & cash equivalents		131			—			131
Cost of net debt		(334	)		—			(334	)

Other financial income		442			—			442
Other financial expense		(407	)		—			(407	)

Equity in income (loss) of affiliates		2,003			(50	)		1,953

Income taxes		(10,646	)		418			(10,228	)

Consolidated net income		10,522			285			10,807

Group share		10,288			283			10,571
Minority interests		234			2			236


(a)		Adjustments include special items, inventory valuation effect and, until June 30, 2010, equity share of adjustments related to Sanofi-Aventis.


							Consolidated
For the year ended December 31, 2009							statement of
(M€)	Adjusted			Adjustments^(a)			income

Sales		131,327			—			131,327
Excise taxes		(19,174	)		—			(19,174	)
Revenues from sales		112,153			—			112,153

Purchases, net of inventory variation		(73,263	)		2,205			(71,058	)
Other operating expenses		(18,271	)		(320	)		(18,591	)
Exploration costs		(698	)		—			(698	)
Depreciation, depletion and amortization of tangible assets and mineral interests		(6,291	)		(391	)		(6,682	)
Other income		131			183			314
Other expense		(315	)		(285	)		(600	)

Financial interest on debt		(530	)		—			(530	)
Financial income from marketable securities & cash equivalents		132			—			132
Cost of net debt		(398	)		—			(398	)

Other financial income		643			—			643
Other financial expense		(345	)		—			(345	)

Equity in income (loss) of affiliates		1,918			(276	)		1,642

Income taxes		(7,302	)		(449	)		(7,751	)

Consolidated net income		7,962			667			8,629

Group share		7,784			663			8,447
Minority interests		178			4			182


(a)		Adjustments include special items, inventory valuation effect and equity share of adjustments related to Sanofi-Aventis.

Page 26


							Consolidated
For the year ended December 31, 2008							statement of
(M€)	Adjusted			Adjustments^(a)			income

Sales		179,976			—			179,976
Excise taxes		(19,645	)		—			(19,645	)
Revenues from sales		160,331			—			160,331

Purchases, net of inventory variation		(107,521	)		(3,503	)		(111,024	)
Other operating expenses		(18,903	)		(198	)		(19,101	)
Exploration costs		(764	)		—			(764	)
Depreciation, depletion and amortization of tangible assets and mineral interests		(5,578	)		(177	)		(5,755	)
Other income		153			216			369
Other expense		(147	)		(407	)		(554	)

Financial interest on debt		(1,000	)		—			(1,000	)
Financial income from marketable securities & cash equivalents		473			—			473
Cost of net debt		(527	)		—			(527	)

Other financial income		728			—			728
Other financial expense		(325	)		—			(325	)

Equity in income (loss) of affiliates		2,316			(595	)		1,721

Income taxes		(15,457	)		1,311			(14,146	)

Consolidated net income		14,306			(3,353	)		10,953

Group share		13,920			(3,330	)		10,590
Minority interests		386			(23	)		363


(a)		Adjustments include special items, inventory valuation effect and equity share of adjustments related to Sanofi-Aventis.

C) Adjustment items by business segment

The adjustment items for income as per Note 2 to the Consolidated Financial Statements are detailed as follows:


Adjustments to operating income
For the year ended December 31, 2010
(M€)	Upstream			Downstream			Chemicals			Corporate		Total

Inventory valuation effect		—			863			130			—		993
Restructuring charges		—			—			—			—		—
Asset impairment charges		(203	)		(1,192	)		(21	)		—		(1,416	)
Other items		—			60			(38	)		—		22

Total		(203	)		(269	)		71			—		(401	)


Adjustments to net income, Group share
For the year ended December 31, 2010
(M€)	Upstream			Downstream			Chemicals			Corporate			Total

Inventory valuation effect		—			635			113			—			748
TOTAL’s equity share of adjustments related to Sanofi-Aventis		—			—			—			(81	)		(81	)
Restructuring charges		—			(12	)		(41	)		—			(53	)
Asset impairment charges		(297	)		(913	)		(14	)		—			(1,224	)
Gains (losses) on disposals of assets		589			122			33			302			1,046
Other items		(37	)		(83	)		(33	)		—			(153	)

Total		255			(251	)		58			221			283

Page 27


Adjustments to operating income
For the year ended December 31, 2009
(M€)	Upstream			Downstream			Chemicals			Corporate		Total

Inventory valuation effect		—			1,816			389			—		2,205
Restructuring charges		—			—			—			—		—
Asset impairment charges		(4	)		(347	)		(40	)		—		(391	)
Other items		(17	)		(258	)		(45	)		—		(320	)

Total		(21	)		1,211			304			—		1,494


Adjustments to net income, Group share
For the year ended December 31, 2009
(M€)	Upstream			Downstream			Chemicals			Corporate			Total

Inventory valuation effect		—			1,279			254			—			1,533
TOTAL’s equity share of adjustments related to Sanofi-Aventis		—			—			—			(300	)		(300	)
Restructuring charges		—			(27	)		(102	)		—			(129	)
Asset impairment charges		(52	)		(253	)		(28	)		—			(333	)
Gains (losses) on disposals of assets		—			—			—			179			179
Other items		(112	)		(182	)		7			—			(287	)

Total		(164	)		817			131			(121	)		663


Adjustments to operating income
For the year ended December 31, 2008
(M€)	Upstream			Downstream			Chemicals			Corporate		Total

Inventory valuation effect		—			(2,776	)		(727	)		—		(3,503	)
Restructuring charges		—			—			—			—		—
Asset impairment charges		(171	)		—			(6	)		—		(177	)
Other items		—			—			(198	)		—		(198	)

Total		(171	)		(2,776	)		(931	)		—		(3,878	)


Adjustments to net income, Group share
For the year ended December 31, 2008
(M€)	Upstream			Downstream			Chemicals			Corporate			Total

Inventory valuation effect		—			(1,949	)		(503	)		—			(2,452	)
TOTAL’s equity share of adjustments related to Sanofi-Aventis		—			—			—			(393	)		(393	)
Restructuring charges		—			(47	)		(22	)		—			(69	)
Asset impairment charges		(172	)		(26	)		(7	)		—			(205	)
Gains (losses) on disposals of assets		130			—			—			84			214
Other items		(236	)		—			(151	)		(38	)		(425	)

Total		(278	)		(2,022	)		(683	)		(347	)		(3,330	)

D) Additional information on impairments

In the Upstream, Downstream and Chemicals segments, impairments of assets have been recognized for the year ended December 31, 2010, with an impact of €1,416 million in operating income and €1,224 million in net income, Group share. These impairments have been disclosed as adjustments to operating income and adjustments to net income, Group share. These items are identified in paragraph 4C above as adjustment items with the heading “Asset impairment charges”.

The impairment losses impact certain Cash Generating Units (CGU) for which there were indications of impairment, due mainly to changes in the operating conditions or the economic environment of their specific businesses.

The principles applied are the following:

	•		the recoverable amount of CGUs has been based on their value in use, as defined in Note 1 paragraph L to the Consolidated Financial Statements “Impairment of long-lived assets”;

	•		future cash flows have been determined with the assumptions in the long-term plan of the Group. These assumptions (including future prices of products, supply and demand for products, future production volumes)

Page 28

represent the best estimate by management of the Group of all economic conditions during the remaining life of assets;

	•		future cash flows, based on the long-term plan, are prepared over a period consistent with the life of the assets within the CGU. They are prepared post-tax and include specific risks attached to CGU assets. They are discounted using a 8% post-tax discount rate, this rate being a weighted-average capital cost estimated from historical market data. This rate has been applied consistently for the years ending in 2008, 2009 and 2010;

	•		value in use calculated by discounting the above post-tax cash flows using a 8% post-tax discount rate is not materially different from value in use calculated by discounting pre-tax cash flows using a pre-tax discount rate determined by an iterative computation from the post-tax value in use. These pre-tax discount rates are in a range from 9% to 12% in 2010.

The CGUs of the Upstream segment affected by these impairments are oil fields and investments in associates accounted for by the equity method. For the year ended December 31, 2010, the Group has recognized impairments with an impact of €203 million in operating income and €297 million in net income, Group share, mainly including an impairment of assets related to its project to build an upgrader in Edmonton, the Group giving up this project as part of its agreements with Suncor.

The CGUs of the Downstream segment are affiliates or groups of affiliates (or industrial assets) organized mostly by country for the refining activities and by relevant geographical area for the marketing activities. In 2010, the economic environment of refining activities remained unfavorable, with a worldwide context of surplus in refining capacities compared to the demand for petroleum products. This surplus is more and more based in Europe, where the demand has been decreasing whereas in emerging countries (in Middle East and Asia) the consumption growth is strong. Considering the specificities of industrial tools, this remaining context of deteriorated margins had a particularly negative impact on the results of the refining CGUs in France and in the United Kingdom and lead to strong operational losses despite the efforts made to improve operations. Moreover in the last few months some operators have announced site closures or tried to dispose of some sites although no material transaction has occurred in 2010. These factors have triggered off the recognition of impairments of assets in Europe, especially within the CGUs Refining France and United Kingdom, reducing the operating income by €1,192 million and the net income, Group share by €913 million. Sensitivity analysis performed on other European refining CGUs, using different actualization rates and margins, have not led to additional impairment charge.

The CGUs of the Chemicals segment are worldwide business units, including activities or products with common strategic, commercial and industrial characteristics.

For the year ended December 31, 2009, impairments of assets have been recognized in the Upstream, Downstream and Chemicals segments with an impact of €413 million in operating income and €382 million in net income, Group share. These impairments have been disclosed as adjustments to operating income for €391 million and adjustments to net income, Group share for €333 million.

For the year ended December 31, 2008, impairments of assets have been recognized in the Upstream, Downstream and Chemicals segments with an impact of €216 million in operating income and €244 million in net income, Group share. These impairments have been disclosed as adjustments to operating income for €177 million and adjustments to net income, Group share for €205 million.

For the years ended December 31, 2010 and 2009, no reversal of impairment has been recognized. For the year ended December 31, 2008, reversals of impairment losses have been recognized in the Upstream segment with an impact of €41 million in operating income and €29 million in net income, Group share.

Page 29

5) Information by geographical area


			Rest of		North				Rest of the
(M€)	France		Europe		America		Africa		world		Total

For the year ended December 31, 2010
Non-Group sales		36,820		72,636		12,432		12,561		24,820		159,269
Property, plant and equipment, intangible assets, net		5,666		14,568		9,584		20,166		13,897		63,881
Capital expenditures		1,062		2,629		3,626		4,855		4,101		16,273

For the year ended December 31, 2009
Non-Group sales		32,437		60,140		9,515		9,808		19,427		131,327
Property, plant and equipment, intangible assets, net		6,973		15,218		8,112		17,312		11,489		59,104
Capital expenditures		1,189		2,502		1,739		4,651		3,268		13,349

For the year ended December 31, 2008
Non-Group sales		43,616		82,761		14,002		12,482		27,115		179,976
Property, plant and equipment, intangible assets, net		7,260		13,485		5,182		15,460		10,096		51,483
Capital expenditures		1,997		2,962		1,255		4,500		2,926		13,640

6) Operating expenses


For the year ended December 31,
(M€)	2010			2009			2008

Purchases, net of inventory variation^(a)		(93,171	)		(71,058	)		(111,024	)
Exploration costs		(864	)		(698	)		(764	)
Other operating expenses^(b)		(19,135	)		(18,591	)		(19,101	)
of which non-current operating liabilities (allowances) reversals		387			515			459
of which current operating liabilities (allowances) reversals		(101	)		(43	)		(29	)

Operating expenses		(113,170	)		(90,347	)		(130,889	)


(a)		Includes taxes paid on oil and gas production in the Upstream segment, namely royalties.

(b)		Principally composed of production and administrative costs (see in particular the payroll costs as detailed in Note 26 to the Consolidated Financial Statements “Payroll and staff”).

7) Other income and other expense


For the year ended December 31,
(M€)	2010			2009			2008

Gains (losses) on disposal of assets		1,117			200			257
Foreign exchange gains		—			—			112
Other		279			114			—

Other income		1,396			314			369


Foreign exchange losses		—			(32	)		—
Amortization of other intangible assets (excl. mineral interests)		(267	)		(142	)		(162	)
Other		(633	)		(426	)		(392	)

Other expense		(900	)		(600	)		(554	)

Other income

In 2010, gains and losses on disposal of assets are mainly related to sales of assets in the Upstream segment (sale of the interests in the Valhall and Hod fields in Norway and sale of the interest in Block 31 in Angola, see Note 3 to the Consolidated Financial Statements), as well as the change in the accounting treatment and the disposal of shares of Sanofi-Aventis (see Note 3 to the Consolidated Financial Statements).

In 2009, gains and losses on disposal of assets were mainly related to the disposal of shares of Sanofi-Aventis.

In 2008, gains and losses on disposal of assets were mainly related to sales of assets in the Upstream segment, as well as the disposal of shares of Sanofi-Aventis.

Other expense

In 2010, the heading “Other” is mainly comprised of €248 million of restructuring charges in the Downstream and Chemicals segments.

Page 30

In 2009, the heading “Other” was mainly comprised of €190 million of restructuring charges in the Downstream and Chemicals segments.

In 2008, the heading “Other” was mainly comprised of:

•		€107 million of restructuring charges in the Upstream, Downstream and Chemicals segments; and

•		€48 million of changes in provisions related to various antitrust investigations as described in Note 32 to the Consolidated Financial Statements “Other risks and contingent liabilities”.

8) Other financial income and expense


As of December 31,
(M€)	2010			2009			2008

Dividend income on non-consolidated subsidiaries		255			210			238
Capitalized financial expenses		113			117			271
Other		74			316			219

Other financial income		442			643			728


Accretion of asset retirement obligations		(338	)		(283	)		(229	)
Other		(69	)		(62	)		(96	)

Other financial expense		(407	)		(345	)		(325	)

9) Income taxes

Since 1966, the Group has been taxed in accordance with the consolidated income tax treatment approved on a renewable basis by the French Ministry of Economy, Finance and Industry. The renewal of this approval has been requested for the 2011-2013 period. It is being reviewed by the French Department of Budget, Public Accounts, Civil Service and State Reform.

No deferred tax is recognized for the temporary differences between the carrying amounts and tax bases of investments in foreign subsidiaries which are considered to be permanent investments. Undistributed earnings from foreign subsidiaries considered to be reinvested indefinitely amounted to €26,458 million as of December 31, 2010. The determination of the tax effect relating to such reinvested income is not practicable.

In addition, no deferred tax is recognized on unremitted earnings (approximately €21,147 million) of the Group’s French subsidiaries since the remittance of such earnings would be tax exempt for the subsidiaries in which the Company owns 95% or more of the outstanding shares.

Income taxes are detailed as follows:


For the year ended December 31,
(M€)	2010			2009			2008

Current income taxes		(9,934	)		(7,213	)		(14,117	)
Deferred income taxes		(294	)		(538	)		(29	)

Total income taxes		(10,228	)		(7,751	)		(14,146	)

Page 31

Before netting deferred tax assets and liabilities by fiscal entity, the components of deferred tax balances are as follows:


As of December 31,
(M€)	2010			2009			2008

Net operating losses and tax carry forwards		1,145			1,114			1,031
Employee benefits		535			517			519
Other temporary non-deductible provisions		2,757			2,184			2,075

Gross deferred tax assets		4,437			3,815			3,625
Valuation allowance		(576	)		(484	)		(475	)

Net deferred tax assets		3,861			3,331			3,150

Excess tax over book depreciation		(10,966	)		(9,791	)		(8,836	)
Other temporary tax deductions		(1,339	)		(1,179	)		(1,171	)

Gross deferred tax liability		(12,305	)		(10,970	)		(10,007	)


Net deferred tax liability		(8,444	)		(7,639	)		(6,857	)

After netting deferred tax assets and liabilities by fiscal entity, deferred taxes are presented on the balance sheet as follows:


As of December 31,
(M€)	2010			2009			2008

Deferred tax assets, non-current (note 14)		1,378			1,164			1,010
Deferred tax assets, current (note 16)		151			214			206
Deferred tax liabilities, non-current		(9,947	)		(8,948	)		(7,973	)
Deferred tax liabilities, current		(26	)		(69	)		(100	)

Net amount		(8,444	)		(7,639	)		(6,857	)

The net deferred tax variation in the balance sheet is analyzed as follows:


As of December 31,
(M€)	2010			2009			2008

Opening balance		(7,639	)		(6,857	)		(7,251	)
Deferred tax on income		(294	)		(538	)		(29	)
Deferred tax on shareholders’ equity^(a)		28			(38	)		30
Changes in scope of consolidation		(59	)		(1	)		(1	)
Currency translation adjustment		(480	)		(205	)		394

Closing balance		(8,444	)		(7,639	)		(6,857	)


(a)		This amount includes mainly current income taxes and deferred taxes for changes in fair value of listed securities classified as financial assets available for sale as well as deferred taxes related to the cash flow hedge (see Note 17 to the Consolidated Financial Statements).

Reconciliation between provision for income taxes and pre-tax income:


For the year ended December 31,
(M€)	2010			2009			2008

Consolidated net income		10,807			8,629			10,953
Provision for income taxes		10,228			7,751			14,146

Pre-tax income		21,035			16,380			25,099
French statutory tax rate		34.43	%		34.43	%		34.43	%

Theoretical tax charge		(7,242	)		(5,640	)		(8,642	)
Difference between French and foreign income tax rates		(4,921	)		(3,214	)		(6,326	)
Tax effect of equity in income (loss) of affiliates		672			565			593
Permanent differences		1,375			597			315
Adjustments on prior years income taxes		(45	)		(47	)		12
Adjustments on deferred tax related to changes in tax rates		2			(1	)		(31	)
Changes in valuation allowance of deferred tax assets		(65	)		(6	)		(63	)
Other		(4	)		(5	)		(4	)

Net provision for income taxes		(10,228	)		(7,751	)		(14,146	)

Page 32

The French statutory tax rate includes the standard corporate tax rate (33.33%) and additional applicable taxes that bring the overall tax rate to 34.43% in 2010 (identical to 2009 and 2008).

Permanent differences are mainly due to impairment of goodwill and to dividends from non-consolidated companies as well as the specific taxation rules applicable to certain activities and within the consolidated income tax treatment.

Net operating losses and tax credit carryforwards

Deferred tax assets related to net operating losses and tax carryforwards expire in the following years:


As of December 31,	2010				2009				2008
(M€)	Basis		Tax		Basis		Tax		Basis		Tax

2009		—		—		—		—		233		115
2010		—		—		258		126		167		79
2011		225		110		170		83		93		42
2012		177		80		121		52		61		19
2013 ^(a)		146		59		133		43		1,765		587
2014 ^(b)		1,807		602		1,804		599		—		—
2015 and after		190		62		—		—		—		—
Unlimited		774		232		661		211		560		189

Total		3,319		1,145		3,147		1,114		2,879		1,031


(a)		Net operating losses and tax credit carryforwards in 2013 and after for 2008

(b)		Net operating losses and tax credit carryforwards in 2014 and after for 2009

Page 33

10) Intangible assets


As of December 31, 2010
(M€)	Cost		Amortization and impairment			Net

Goodwill		1,498		(596	)		902
Proved and unproved mineral interests		10,099		(2,712	)		7,387
Other intangible assets		2,803		(2,175	)		628

Total intangible assets		14,400		(5,483	)		8,917


As of December 31, 2009
(M€)	Cost		Amortization and impairment			Net

Goodwill		1,776		(614	)		1,162
Proved and unproved mineral interests		8,204		(2,421	)		5,783
Other intangible assets		2,712		(2,143	)		569

Total intangible assets		12,692		(5,178	)		7,514


As of December 31, 2008
(M€)	Cost		Amortization and impairment			Net

Goodwill		1,690		(616	)		1,074
Proved and unproved mineral interests		6,010		(2,268	)		3,742
Other intangible assets		2,519		(1,994	)		525

Total intangible assets		10,219		(4,878	)		5,341

Changes in net intangible assets are analyzed in the following table:


											Currency
	Net amount as							Amortization and			translation						Net amount as of
(M€)	of January 1,		Acquisitions		Disposals			impairment			adjustment			Other			December 31,

2010		7,514		2,466		(62	)		(553	)		491			(939	)		8,917
2009		5,341		629		(64	)		(345	)		2			1,951			7,514
2008		4,650		404		(3	)		(259	)		(93	)		642			5,341

In 2010, the heading “Other” mainly includes Chesapeake’s Barnett shale mineral interests reclassified into the acquisitions for €(975) million and the reclassification of Joslyn’s mineral interests in accordance with IFRS 5 “Non-current assets held for sale and discontinued operations” for €(390) million, including the currency translation adjustment (see Note 34 to the Consolidated Financial Statements), partially compensated by the acquisition of UTS for €646 million (see Note 3 to the Consolidated Financial Statements).

In 2009, the heading “Other” mainly included Chesapeake’s Barnett shale mineral interests for €1,449 million (see Note 3 to the Consolidated Financial Statements).

In 2008, the heading “Other” mainly included the impact of “proved and unproved mineral interests” from Synenco Energy Inc. for €221 million and from Goal Petroleum B.V. for €292 million.

A summary of changes in the carrying amount of goodwill by business segment for the year ended December 31, 2010 is as follows:


	Net goodwill as										Net goodwill as of
(M€)	of January 1, 2010		Increases		Impairments			Other			December 31, 2010

Upstream		78		—		—			—			78
Downstream		202		22		(88	)		(54	)		82
Chemicals		857		—		—			(140	)		717
Corporate		25		—		—			—			25

Total		1,162		22		(88	)		(194	)		902

The heading « Other » mainly corresponds to the sale of Mapa Spontex and the reclassification of the goodwill of resins businesses subject to a disposal plan in accordance with IFRS 5 “Non-current assets held for sale and discontinued operations”.

Page 34

11) Property, plant and equipment


As of December 31, 2010
(M€)	Cost		Depreciation and impairment			Net

Upstream properties
Proved properties		77,183		(50,582	)		26,601
Unproved properties		347		(1	)		346
Work in progress		14,712		(37	)		14,675

Subtotal		92,242		(50,620	)		41,622

Other property, plant and equipment
Land		1,304		(393	)		911
Machinery, plant and equipment (including transportation equipment)		23,831		(17,010	)		6,821
Buildings		6,029		(3,758	)		2,271
Work in progress		2,350		(488	)		1,862
Other		6,164		(4,687	)		1,477

Subtotal		39,678		(26,336	)		13,342

Total property, plant and equipment		131,920		(76,956	)		54,964


As of December 31, 2009
(M€)	Cost		Depreciation and impairment			Net

Upstream properties
Proved properties		71,082		(44,718	)		26,364
Unproved properties		182		(1	)		181
Work in progress		10,351		(51	)		10,300

Subtotal		81,615		(44,770	)		36,845

Other property, plant and equipment
Land		1,458		(435	)		1,023
Machinery, plant and equipment (including transportation equipment)		22,927		(15,900	)		7,027
Buildings		6,142		(3,707	)		2,435
Work in progress		2,774		(155	)		2,619
Other		6,506		(4,865	)		1,641

Subtotal		39,807		(25,062	)		14,745

Total property, plant and equipment		121,422		(69,832	)		51,590


As of December 31, 2008
(M€)	Cost		Depreciation and impairment			Net

Upstream properties
Proved properties		61,727		(39,315	)		22,412
Unproved properties		106		(1	)		105
Work in progress		9,586		—			9,586

Subtotal		71,419		(39,316	)		32,103

Other property, plant and equipment
Land		1,446		(429	)		1,017
Machinery, plant and equipment (including transportation equipment)		21,734		(14,857	)		6,877
Buildings		5,739		(3,441	)		2,298
Work in progress		2,226		(10	)		2,216
Other		6,258		(4,627	)		1,631

Subtotal		37,403		(23,364	)		14,039

Total property, plant and equipment		108,822		(62,680	)		46,142

Changes in net property, plant and equipment are analyzed in the following table:


											Currency
	Net amount as							Depreciation and			translation						Net amount as of
(M€)	of January 1,		Acquisitions		Disposals			impairment			adjustment			Other			December 31,

2010		51,590		11,346		(1,269	)		(8,564	)		2,974			(1,113	)		54,964
2009		46,142		11,212		(65	)		(6,765	)		397			669			51,590
2008		41,467		11,442		(102	)		(5,941	)		(1,151	)		427			46,142

Page 35

In 2010, the heading “Disposals” mainly includes the impact of sales of assets in the Upstream segment (sale of the interests in the Valhall and Hod fields in Norway and sale of the interest in Block 31 in Angola, see Note 3 to the Consolidated Financial Statements).

In 2010, the heading “Depreciation and impairment” includes the impact of impairments of assets recognized for €1,416 million (see Note 4C to the Consolidated Financial Statements).

In 2010, the heading “Other” mainly corresponds to the change in the consolidation method of Samsung Total Petrochemicals (see Note 12 to the Consolidated Financial Statements) for €(541) million and the reclassification for €(537) million, including the currency translation adjustment, of property, plant and equipment related to Joslyn, Total E&P Cameroun, and resins businesses subject to a disposal project in accordance with IFRS 5 “Non-current assets held for sale and discontinued operations” (see Note 34 to the Consolidated Financial Statements), partially compensated by the acquisition of UTS for €217 million (see Note 3 to the Consolidated Financial Statements).

In 2009, the heading “Other” mainly included changes in net property, plant and equipment related to asset retirement obligations and Chesapeake’s Barnett shale tangible assets for €113 million (see Note 3 to the Consolidated Financial Statements).

In 2008, the heading “Other” mainly included changes in net property, plant and equipment related to asset retirement obligations.

Property, plant and equipment presented above include the following amounts for facilities and equipment under finance leases that have been capitalized:


As of December 31, 2010
(M€)	Cost		Depreciation and impairment			Net

Machinery, plant and equipment		480		(332	)		148
Buildings		54		(24	)		30
Other		—		—			—

Total		534		(356	)		178


As of December 31, 2009
(M€)	Cost		Depreciation and impairment			Net

Machinery, plant and equipment		548		(343	)		205
Buildings		60		(30	)		30
Other		—		—			—

Total		608		(373	)		235


As of December 31, 2008
(M€)	Cost		Depreciation and impairment			Net

Machinery, plant and equipment		558		(316	)		242
Buildings		35		(28	)		7
Other		—		—			—

Total		593		(344	)		249

12) Equity affiliates: investments and loans

As from January 1^st, 2010, jointly-controlled entities are consolidated under the equity method, as provided for in the alternative method of IAS 31 “Interests in joint ventures” (see Note 1 “Accounting policies” paragraphs A and V to the Consolidated Financial Statements). Until December 31, 2009, these entities were consolidated using the proportionate method.

Page 36


							As of December 31,
Equity value	2010			2009			2008			2010		2009		2008
(M€)	% owned									equity value

NLNG		15.00	%		15.00	%		15.00	%		1,108		1,136		1,135
PetroCedeño — EM		30.32	%		30.32	%		30.32	%		1,136		874		760
CEPSA (Upstream share)		48.83	%		48.83	%		48.83	%		340		385		403
Angola LNG Ltd.		13.60	%		13.60	%		13.60	%		710		490		326
Qatargas		10.00	%		10.00	%		10.00	%		85		83		251
Société du Terminal Méthanier de Fos Cavaou		28.03	%		28.79	%		30.30	%		125		124		114
Dolphin Energy Ltd (Del) Abu Dhabi		24.50	%		24.50	%		24.50	%		172		118		85
Qatar Liquefied Gas Company Limited II (Train B)		16.70	%		16.70	%		16.70	%		184		143		82
Shtokman Development AG ^(a)		25.00	%		25.00	%		25.00	%		214		162		35
AMYRIS ^(b)		22.03	%		—			—			101		—		—
Other		—			—			—			749		745		700
Total associates											4,924		4,260		3,891
Other		—			—			—			78		—		—
Total jointly-controlled entities											78		—		—

Total Upstream											5,002		4,260		3,891
CEPSA (Downstream share)		48.83	%		48.83	%		48.83	%		2,151		1,927		1,810
Saudi Aramco Total Refining & Petrochemicals (Downstream share) ^(a)		37.50	%		37.50	%		37.50	%		47		60		75
Wepec		22.41	%		22.41	%		22.41	%		—		—		—
Other		—			—			—			159		123		73
Total associates											2,357		2,110		1,958
SARA ^(d)		50.00	%		—			—			134		—		—
TotalErg ^(b)		49.00	%		—			—			289		—		—
Other		—			—			—			2		—		—
Total jointly-controlled entities											425		—		—

Total Downstream											2,782		2,110		1,958
CEPSA (Chemicals share)		48.83	%		48.83	%		48.83	%		411		396		424
Qatar Petrochemical Company Ltd.		20.00	%		20.00	%		20.00	%		221		205		192
Saudi Aramco Total Refining & Petrochemicals (Chemicals share) ^(a)		37.50	%		37.50	%		37.50	%		4		5		6
Other		—			—			—			68		46		55
Total associates											704		652		677
Samsung Total Petrochemicals^(d)		50.00	%		—			—			645		—		—
Total jointly-controlled entities											645		—		—

Total Chemicals											1,349		652		677
Sanofi-Aventis^(c)		—			7.39	%		11.38	%		—		4,235		6,137
Total associates											—		4,235		6,137
Total jointly-controlled entities											—		—		—

Total Corporate											—		4,235		6,137

Total investments											9,133		11,257		12,663
Loans											2,383		2,367		2,005

Total investments and loans											11,516		13,624		14,668


(a)		Investment accounted for by the equity method as from 2008.

(b)		Investment accounted for by the equity method as from 2010.

(c)		End of the accounting for by the equity method of Sanofi-Aventis as of July 1^st, 2010 (see Note 3 to the Consolidated Financial Statements).

(d)		Change in the consolidation method as of January 1^st, 2010.

Page 37


	As of December 31,									For the year ended December 31,
Equity in income (loss)	2010			2009			2008			2010			2009			2008
(M€)	% owned									Equity in income (loss)

NLNG		15.00	%		15.00	%		15.00	%		207			227			554
PetroCedeño — EM		30.32	%		30.32	%		30.32	%		195			166			193
CEPSA (Upstream share)		48.83	%		48.83	%		48.83	%		57			23			50
Angola LNG Ltd.		13.60	%		13.60	%		13.60	%		8			9			10
Qatargas		10.00	%		10.00	%		10.00	%		136			114			126
Société du Terminal Méthanier de Fos Cavaou		28.03	%		28.79	%		30.30	%		—			—			(5	)
Dolphin Energy Ltd (Del) Abu Dhabi		24.50	%		24.50	%		24.50	%		121			94			83
Qatar Liquefied Gas Company Limited II (Train B)		16.70	%		16.70	%		16.70	%		288			8			(11	)
Shtokman Development AG ^(a)		25.00	%		25.00	%		25.00	%		(5	)		4			—
AMYRIS ^(b)		22.03	%		—			—			(3	)
Other		—			—			—			177			214			178
Total associates											1,181			859			1,178
Other		—			—			—			6			—			—
Total jointly-controlled entities											6			—			—

Total Upstream											1,187			859			1,178
CEPSA (Downstream share)		48.83	%		48.83	%		48.83	%		172			149			76
Saudi Aramco Total Refining & Petrochemicals (Downstream share) ^(a)		37.50	%		37.50	%		37.50	%		(19	)		(12	)		—
Wepec		22.41	%		22.41	%		22.41	%		29			—			(110	)
Other		—			—			—			47			81			(13	)
Total associates											229			218			(47	)
SARA ^(d)		50.00	%		—			—			31			—			—
TotalErg ^(b)		49.00	%		—			—			(11	)		—			—
Other		—			—			—			2			—			—
Total jointly-controlled entities											22			—			—

Total Downstream											251			218			(47	)
CEPSA (Chemicals share)		48.83	%		48.83	%		48.83	%		78			10			10
Qatar Petrochemical Company Ltd.		20.00	%		20.00	%		20.00	%		84			74			66
Saudi Aramco Total Refining & Petrochemicals (Chemicals share) ^(a)		37.50	%		37.50	%		37.50	%		(1	)		(1	)		—
Other		—			—			—			41			(4	)		(1	)
Total associates											202			79			75
Samsung Total Petrochemicals^(d)		50.00	%		—			—			104			—			—
Total jointly-controlled entities											104			—			—

Total Chemicals											306			79			75
Sanofi-Aventis^(c)		—			7.39	%		11.38	%		209			486			515
Total associates											209			486			515
Total jointly-controlled entities											—			—			—

Total Corporate											209			486			515

Total investments											1,953			1,642			1,721


(a)		Investment accounted for by the equity method as from 2008.

(b)		Investment accounted for by the equity method as from 2010.

(c)		End of the accounting for by the equity method of Sanofi-Aventis as of July 1^st, 2010 (see Note 3 to the Consolidated Financial Statements).

(d)		Change in the consolidation method as of January 1^st, 2010.

The market value of the Group’s share in CEPSA amounts to €2,389 million as of December 31, 2010 for an equity value of €2,902 million. The recoverable amount of CEPSA determined by reference to the value of discounted future cash flows being greater than the equity value, no impairment loss has been accounted for.

Page 38

In Group share, the main financial items of the equity affiliates are as follows :


	2010				2009				2008
			Jointly-				Jointly-				Jointly-
As of December 31,			controlled				controlled				controlled
(M€)	Associates		entities		Associates		entities		Associates		entities

Assets		19,192		2,770		22,681		—		23,173		—
Shareholders’ equity		7,985		1,148		11,257		—		12,663		—
Liabilities		11,207		1,622		11,424		—		10,510		—


	2010						2009					2008
				Jointly-						Jointly-					Jointly-
For the year ended December 31,				controlled						controlled					controlled
(M€)	Associates			entities			Associates			entities		Associates			entities

Revenues from sales		16,529			2,575			14,434			—		19,982			—
Pre-tax income		2,389			166			2,168			—		2,412			—
Income tax		(568	)		(34	)		(526	)		—		(691	)		—

Net income		1,821			132			1,642					1,721

13) Other investments

The investments detailed below are classified as “Financial assets available for sale” (see Note 1 paragraph M(ii) to the Consolidated Financial Statements).


As of December 31, 2010	Carrying
(M€)	amount		Unrealized gain (loss)			Balance sheet value

Sanofi-Aventis^(a)		3,510		(56	)		3,454
Areva ^(b)		69		63			132
Arkema		—		—			—
Chicago Mercantile Exchange Group ^(c)		1		9			10
Olympia Energy Fund — energy investment fund ^(d)		37		(3	)		34
Other publicly traded equity securities		2		(1	)		1

Total publicly traded equity securities ^(e)		3,619		12			3,631
BBPP		60		—			60
BTC Limited		141		—			141
Other equity securities		758		—			758

Total other equity securities ^(e)		959		—			959

Other investments		4,578		12			4,590

Page 39


As of December 31, 2009	Carrying
(M€)	amount		Unrealized gain (loss)			Balance sheet value

Areva ^(b)		69		58			127
Arkema		15		47			62
Chicago Mercantile Exchange Group ^(c)		1		9			10
Olympia Energy Fund — energy investment fund ^(d)		35		(2	)		33
Other publicly traded equity securities		—		—			—

Total publicly traded equity securities ^(e)		120		112			232
BBPP		72		—			72
BTC Limited		144		—			144
Other equity securities		714		—			714

Total other equity securities ^(e)		930		—			930

Other investments		1,050		112			1,162


As of December 31, 2008	Carrying
(M€)	amount		Unrealized gain (loss)			Balance sheet value

Areva ^(b)		69		59			128
Arkema		16		15			31
Chicago Mercantile Exchange Group ^(c)		1		5			6
Olympia Energy Fund — energy investment fund ^(d)		36		(5	)		31
Other publicly traded equity securities		—		—			—

Total publicly traded equity securities ^(e)		122		74			196
BBPP		75		—			75
BTC Limited		161		—			161
Other equity securities		733		—			733

Total other equity securities ^(e)		969		—			969

Other investments		1,091		74			1,165


(a)		End of the accounting for by the equity method of Sanofi-Aventis as of July 1st, 2010 (see Note 3 to the Consolidated Financial Statements).

(b)		Unrealized gain based on the investment certificate.

(c)		The Nymex Holdings Inc. securities have been traded during the acquisition process running from June 11 to August 22, 2008 through which Chicago Mercantile Exchange Group acquired all the Nymex Holdings Inc. securities.

(d)		Securities acquired in 2008.

(e)		Including cumulative impairments of €597 million in 2010, €599 million in 2009 and €608 million in 2008.

Page 40

14) Other non-current assets


As of December 31, 2010
(M€)	Gross value		Valuation allowance			Net value

Deferred income tax assets		1,378		—			1,378
Loans and advances^(a)		2,060		(464	)		1,596
Other		681		—			681

Total		4,119		(464	)		3,655


As of December 31, 2009
(M€)	Gross value		Valuation allowance			Net value

Deferred income tax assets		1,164		—			1,164
Loans and advances^(a)		1,871		(587	)		1,284
Other		633		—			633

Total		3,668		(587	)		3,081


As of December 31, 2008
(M€)	Gross value		Valuation allowance			Net value

Deferred income tax assets		1,010		—			1,010
Loans and advances^(a)		1,932		(529	)		1,403
Other		631		—			631

Total		3,573		(529	)		3,044


(a)		Excluding loans to equity affiliates.

Changes in the valuation allowance on loans and advances are detailed as follows:


									Currency
	Valuation								translation			Valuation
For the year ended December 31,	allowance as of								adjustment and			allowance as of
(M€)	January 1,			Increases			Decreases		other variations			December 31,

2010		(587	)		(33	)		220		(64	)		(464	)
2009		(529	)		(19	)		29		(68	)		(587	)
2008		(527	)		(33	)		52		(21	)		(529	)

Page 41

15) Inventories


As of December 31, 2010
(M€)	Gross value		Valuation allowance			Net value

Crude oil and natural gas		4,990		—			4,990
Refined products		7,794		(28	)		7,766
Chemicals products		1,350		(99	)		1,251
Other inventories		1,911		(318	)		1,593

Total		16,045		(445	)		15,600


As of December 31, 2009
(M€)	Gross value		Valuation allowance			Net value

Crude oil and natural gas		4,581		—			4,581
Refined products		6,647		(18	)		6,629
Chemicals products		1,234		(113	)		1,121
Other inventories		1,822		(286	)		1,536

Total		14,284		(417	)		13,867


As of December 31, 2008
(M€)	Gross value		Valuation allowance			Net value

Crude oil and natural gas		2,772		(326	)		2,446
Refined products		4,954		(416	)		4,538
Chemicals products		1,419		(105	)		1,314
Other inventories		1,591		(268	)		1,323

Total		10,736		(1,115	)		9,621

Changes in the valuation allowance on inventories are as follows:


							Currency
							translation
For the year ended December 31,	Valuation allowance						adjustment and			Valuation allowance
(M€)	as of January 1,			Increase (net)			other variations			as of December 31,

2010		(417	)		(39	)		11			(445	)
2009		(1,115	)		700			(2	)		(417	)
2008		(325	)		(740	)		(50	)		(1,115	)

Page 42

16) Accounts receivable and other current assets


As of December 31, 2010	Gross		Valuation			Net
(M€)	value		allowance			value

Accounts receivable		18,635		(476	)		18,159

Recoverable taxes		2,227		—			2,227
Other operating receivables		4,543		(136	)		4,407
Deferred income tax		151		—			151
Prepaid expenses		657		—			657
Other current assets		41		—			41

Other current assets		7,619		(136	)		7,483


As of December 31, 2009	Gross		Valuation			Net
(M€)	value		allowance			value

Accounts receivable		16,187		(468	)		15,719

Recoverable taxes		2,156		—			2,156
Other operating receivables		5,214		(69	)		5,145
Deferred income tax		214		—			214
Prepaid expenses		638		—			638
Other current assets		45		—			45

Other current assets		8,267		(69	)		8,198


As of December 31, 2008	Gross		Valuation			Net
(M€)	value		allowance			value

Accounts receivable		15,747		(460	)		15,287

Recoverable taxes		2,510		—			2,510
Other operating receivables		6,227		(19	)		6,208
Deferred income tax		206		—			206
Prepaid expenses		650		—			650
Other current assets		68		—			68

Other current assets		9,661		(19	)		9,642

Changes in the valuation allowance on “Accounts receivable” and “Other current assets” are as follows:


	Valuation						Currency translation			Valuation
	allowance as of						adjustments and			allowance as of
(M€)	January 1,			Increase (net)			other variations			December 31,

Accounts receivable
2010		(468	)		(31	)		23			(476	)
2009		(460	)		(17	)		9			(468	)
2008		(482	)		9			13			(460	)

Other current assets
2010		(69	)		(66	)		(1	)		(136	)
2009		(19	)		(14	)		(36	)		(69	)
2008		(27	)		7			1			(19	)

As of December 31, 2010, the net portion of the overdue receivables included in “Accounts receivable” and “Other current assets” is €3,141 million, of which €1,885 million has expired for less than 90 days, €292 million has expired between 90 days and 6 months, €299 million has expired between 6 and 12 months and €665 million has expired for more than 12 months.

As of December 31, 2009, the net portion of the overdue receivables included in “Accounts receivable” and “Other current assets” is €3,610 million, of which €2,116 million has expired for less than 90 days, €486 million has expired

Page 43

between 90 days and 6 months, €246 million has expired between 6 and 12 months and €762 million has expired for more than 12 months.

As of December 31, 2008, the net portion of the overdue receivables included in “Accounts receivable” and “Other current assets” was €3,744 million, of which €2,420 million had expired for less than 90 days, €729 million had expired between 90 days and 6 months, €54 million had expired between 6 and 12 months and €541 million had expired for more than 12 months.

17) Shareholders’ equity

Number of TOTAL shares

The Company’s common shares, par value €2.50, as of December 31, 2010 are the only category of shares. Shares may be held in either bearer or registered form.

Double voting rights are granted to holders of shares that are fully-paid and held in the name of the same shareholder for at least two years, with due consideration for the total portion of the share capital represented. Double voting rights are also assigned to restricted shares in the event of an increase in share capital by incorporation of reserves, profits or premiums based on shares already held that are entitled to double voting rights.

Pursuant to the Company’s bylaws (Statuts), no shareholder may cast a vote at a shareholders’ meeting, either by himself or through an agent, representing more than 10% of the total voting rights for the Company’s shares. This limit applies to the aggregated amount of voting rights held directly, indirectly or through voting proxies. However, in the case of double voting rights, this limit may be extended to 20%.

These restrictions no longer apply if any individual or entity, acting alone or in concert, acquires at least two-thirds of the total share capital of the Company, directly or indirectly, following a public tender offer for all of the Company’s shares.

The authorized share capital amounts to 3,439,391,697 shares as of December 31, 2010 compared to 3,381,921,458 shares as of December 31, 2009 and 3,413,204,025 as of December 31, 2008.


Variation of the share capital

As of January 1, 2008		2,395,532,097
Shares issued in connection with:	Capital increase reserved for employees	4,870,386
	Exercise of TOTAL share subscription options	1,178,167
	Exchange guarantee offered to the beneficiaries of Elf Aquitaine share subscription options	227,424
Cancellation of shares^(a)		(30,000,000	)

As of January 1, 2009		2,371,808,074
Shares issued in connection with:	Exercise of TOTAL share subscription options	934,780
	Exchange guarantee offered to the beneficiaries of Elf Aquitaine share subscription options	480,030
Cancellation of shares^(b)		(24,800,000	)

As of January 1, 2010		2,348,422,884
Shares issued in connection with:	Exercise of TOTAL share subscription options	1,218,047

As of December 31, 2010 ^(c)		2,349,640,931


(a)		Decided by the Board of Directors on July 31, 2008.

(b)		Decided by the Board of Directors on July 30, 2009.

(c)		Including 112,487,679 treasury shares deducted from consolidated shareholders’ equity.

Page 44

The variation of both weighted-average number of shares and weighted-average number of diluted shares respectively used in the calculation of earnings per share and fully-diluted earnings per share is detailed as follows:


	2010			2009			2008
Number of shares as of January 1,	2,348,422,884			2,371,808,074			2,395,532,097

Number of shares issued during the year (pro rated)
Exercise of TOTAL share subscription options		412,114			221,393			742,588
Exercise of TOTAL share purchase options		984,800			93,827			2,426,827
Exchange guarantee offered to the beneficiaries of Elf Aquitaine share subscription options		—			393,623			86,162
TOTAL restricted shares		416,420			1,164,389			1,112,393
Global free TOTAL share plan ^(a)		15			—			—
Capital increase reserved for employees		—			—			3,246,924
TOTAL shares held by TOTAL S.A. or by its subsidiaries and deducted from shareholders’ equity		(115,407,190	)		(143,082,095	)		(168,290,440	)

Weighted-average number of shares		2,234,829,043			2,230,599,211			2,234,856,551

Dilutive effect
TOTAL share subscription and purchase options		1,758,006			1,711,961			6,784,200
TOTAL restricted shares		6,031,963			4,920,599			4,172,944
Global free TOTAL share plan ^(a)		1,504,071			—			—
Exchange guarantee offered to the beneficiaries of Elf Aquitaine share subscription options		—			60,428			460,935
Capital increase reserved for employees		371,493			—			383,912

Weighted-average number of diluted shares		2,244,494,576			2,237,292,199			2,246,658,542


(a)		The Board of Directors approved on May 21, 2010 the implementation and conditions of a global free share plan intended for the Group employees.

Capital increase reserved for Group employees

Pursuant to the authorization granted by the shareholders’ meeting held on May 11, 2007, the Board of Directors, during its November 6, 2007 meeting, implemented a first capital increase reserved for employees within the limit of 12 million shares, at a price of €44.40 per share, with dividend rights as of January 1, 2007. The subscription period ran from March 10, 2008 to March 28, 2008. 4,870,386 shares were subscribed by employees pursuant to the capital increase.

At the shareholders’ meeting held on May 21, 2010, the shareholders delegated to the Board of Directors the authority to increase the share capital of the Company in one or more transactions and within a maximum period of 26 months from the date of the meeting, by an amount not exceeding 1.5% of the share capital outstanding on the date of the meeting of the Board of Directors at which a decision to proceed with an issuance is made reserving subscriptions for such issuance to the Group employees participating in a company savings plan. It is being specified that the amount of any such capital increase reserved for Group employees was counted against the aggregate maximum nominal amount of share capital increases authorized by the shareholders’ meeting held on May 21, 2010 for issuing new ordinary shares or other securities granting immediate or future access to the Company’s share capital with preferential subscription rights (€2.5 billion in nominal value).

Pursuant to this delegation of authorization, the Board of Directors, during its October 28, 2010 meeting, decided to proceed with a capital increase reserved for employees in 2011 within the limit of 12 million shares with dividend rights as of January 1, 2010 and delegated to the Chairman and CEO all powers to determine the opening and closing of the subscription period and the subscription price.

Share cancellation

Pursuant to the authorization granted by the shareholders’ meeting held on May 11, 2007 authorizing reduction of capital by cancellation of shares held by the Company within the limit of 10% of the outstanding capital every 24 months, the Board of Directors decided on July 30, 2009 to cancel 24,800,000 shares acquired in 2008 at an average price of €49.28 per share.

Treasury shares (TOTAL shares held by TOTAL S.A.)

As of December 31, 2010, TOTAL S.A. held 12,156,411 of its own shares, representing 0.52% of its share capital, detailed as follows:

	•		6,012,460 shares allocated to TOTAL restricted shares plans for Group employees;

	•		6,143,951 shares intended to be allocated to new TOTAL share purchase option plans or to new restricted shares plans.

Page 45

These shares are deducted from the consolidated shareholders’ equity.

As of December 31, 2009, TOTAL S.A. held 15,075,922 of its own shares, representing 0.64% of its share capital, detailed as follows:

	•		6,017,499 shares allocated to covering TOTAL share purchase option plans for Group employees and executive officers;

	•		5,799,400 shares allocated to TOTAL restricted shares plans for Group employees; and

	•		3,259,023 shares intended to be allocated to new TOTAL share purchase option plans or to new restricted shares plans.

These shares were deducted from the consolidated shareholders’ equity.

As of December 31, 2008, TOTAL S.A. held 42,750,827 of its own shares, representing 1.80% of its share capital, detailed as follows:

	•		12,627,522 shares allocated to covering TOTAL share purchase option plans for Group employees;

	•		5,323,305 shares allocated to TOTAL restricted shares plans for Group employees; and

	•		24,800,000 shares purchased for cancellation between January and October 2008 pursuant to the authorization granted by the shareholders’ meetings held on May 11, 2007 and May 16, 2008. The Board of Directors on July 30, 2009 decided to cancel these 24,800,000 shares acquired at an average price of €49.28 per share.

These shares were deducted from the consolidated shareholders’ equity.

TOTAL shares held by Group subsidiaries

As of December 31, 2010, 2009 and 2008, TOTAL S.A. held indirectly through its subsidiaries 100,331,268 of its own shares, representing 4.27% of its share capital as of December 31, 2010, 4.27% of its share capital as of December 31, 2009 and 4.23% of its share capital as of December 31, 2008 detailed as follows:

	•		2,023,672 shares held by a consolidated subsidiary, Total Nucléaire, 100% indirectly controlled by TOTAL S.A.; and

	•		98,307,596 shares held by subsidiaries of Elf Aquitaine (Financière Valorgest, Sogapar and Fingestval).

These shares are deducted from the consolidated shareholders’ equity.

Dividend

TOTAL S.A. paid on June 1, 2010 the balance of the dividend of €1.14 per share for the 2009 fiscal year (the ex-dividend date was May 27, 2010). In addition, TOTAL S.A. paid on November 17, 2010 an interim dividend of €1.14 per share for the fiscal year 2010 (the ex-dividend date was November 12, 2010).

A resolution will be submitted at the shareholders’ meeting on May 13, 2011 to pay a dividend of €2.28 per share for the 2010 fiscal year, i.e. a balance of €1.14 per share to be distributed after deducting the interim dividend of €1.14 already paid.

Paid-in surplus

In accordance with French law, the paid-in surplus corresponds to share premiums of the parent company which can be capitalized or used to offset losses if the legal reserve has reached its minimum required level. The amount of the paid-in surplus may also be distributed subject to taxation unless the unrestricted reserves of the parent company are distributed prior to this item.

As of December 31, 2010, paid-in surplus amounted to €27,208 million (€27,171 million as of December 31, 2009 and €28,284 million as of December 31, 2008).

Reserves

Under French law, 5% of net income must be transferred to the legal reserve until the legal reserve reaches 10% of the nominal value of the share capital. This reserve cannot be distributed to the shareholders other than upon liquidation but can be used to offset losses.

If wholly distributed, the unrestricted reserves of the parent company would be taxed for an approximate amount of €514 million as of December 31, 2010 (€514 million as of December 31, 2009).

Page 46

Other comprehensive income

Detail of other comprehensive income showing items reclassified from equity to net income is presented in the table below:


For the year ended December 31,
(M€)	2010					2009					2008


Currency translation adjustment				2,231					(244	)				(722	)
- Unrealized gain/(loss) of the period		2,234					(243	)				(722	)
- Less gain/(loss) included in net income		3					1					—

Available for sale financial assets				(100	)				38					(254	)
- Unrealized gain/(loss) of the period		(50	)				38					(254	)
- Less gain/(loss) included in net income		50					—					—

Cash flow hedge				(80	)				128					—
- Unrealized gain/(loss) of the period		(195	)				349					—
- Less gain/(loss) included in net income		(115	)				221					—

Share of other comprehensive income of equity affiliates, net amount				302					234					173

Other				(7	)				(5	)				1
- Unrealized gain/(loss) of the period		(7	)				(5	)				1
- Less gain/(loss) included in net income		—					—					—

Tax effect				28					(38	)				30


Total other comprehensive income, net amount				2,374					113					(772	)

Tax effects relating to each component of other comprehensive income are as follows:


				2010								2009									2008

For the year ended December 31,	Pre-tax			Tax		Net			Pre-tax			Tax			Net			Pre-tax			Tax		Net
(M€)	amount			effect		amount			amount			effect			amount			amount			effect		amount

Currency translation adjustment		2,231			—		2,231			(244	)		—			(244	)		(722	)		—		(722	)
Available for sale financial assets		(100	)		2		(98	)		38			4			42			(254	)		30		(224	)
Cash flow hedge		(80	)		26		(54	)		128			(42	)		86			—			—		—
Share of other comprehensive income of equity affiliates, net amount		302			—		302			234			—			234			173			—		173
Other		(7	)		—		(7	)		(5	)		—			(5	)		1			—		1

Total other comprehensive income		2,346			28		2,374			151			(38	)		113			(802	)		30		(772	)

18) Employee benefits obligations

Liabilities for employee benefits obligations consist of the following:


As of December 31,
(M€)	2010		2009		2008

Pension benefits liabilities		1,268		1,236		1,187
Other benefits liabilities		605		592		608
Restructuring reserves (early retirement plans)		298		212		216

Total		2,171		2,040		2,011

The Group’s main defined benefit pension plans are located in France, in the United Kingdom, in the United States, in Belgium and in Germany. Their main characteristics are the following:

	•		The benefits are usually based on the final salary and seniority;

	•		They are usually funded (pension fund or insurer); and

	•		They are closed to new employees who benefit from defined contribution pension plans.

The pension benefits include also termination indemnities and early retirement benefits.

Page 47

The other benefits are the employer contribution to post-employment medical care.

The fair value of the defined benefit obligation and plan assets in the Consolidated Financial Statements is detailed as follows:


As of December 31,	Pension benefits									Other benefits
(M€)	2010			2009			2008			2010			2009			2008

Change in benefit obligation
Benefit obligation at beginning of year		8,169			7,405			8,129			547			544			583
Service cost		159			134			143			11			10			14
Interest cost		441			428			416			29			30			24
Curtailments		(4	)		(5	)		(3	)		(3	)		(1	)		—
Settlements		(60	)		(3	)		(5	)		—			—			(4	)
Special termination benefits		—			—			—			1			—			—
Plan participants’ contributions		11			10			12			—			—			—
Benefits paid		(471	)		(484	)		(463	)		(33	)		(33	)		(37	)
Plan amendments		28			118			12			1			(2	)		(12	)
Actuarial losses (gains)		330			446			(248	)		57			—			(27	)
Foreign currency translation and other		137			120			(588	)		13			(1	)		3

Benefit obligation at year-end		8,740			8,169			7,405			623			547			544

Change in fair value of plan assets
Fair value of plan assets at beginning of year		(6,286	)		(5,764	)		(6,604	)		—			—			—
Expected return on plan assets		(396	)		(343	)		(402	)		—			—			—
Actuarial losses (gains)		(163	)		(317	)		1,099			—			—			—
Settlements		56			2			2			—			—			—
Plan participants’ contributions		(11	)		(10	)		(12	)		—			—			—
Employer contributions ^(a)		(269	)		(126	)		(855	)		—			—			—
Benefits paid		394			396			375			—			—			—
Foreign currency translation and other		(134	)		(124	)		633			—			—			—

Fair value of plan assets at year-end		(6,809	)		(6,286	)		(5,764	)		—			—			—


Unfunded status		1,931			1,883			1,641			623			547			544

Unrecognized prior service cost		(105	)		(153	)		(48	)		10			15			21
Unrecognized actuarial (losses) gains		(1,170	)		(1,045	)		(953	)		(28	)		30			43
Asset ceiling		9			9			5			—			—			—

Net recognized amount		665			694			645			605			592			608

Pension benefits and other benefits liabilities		1,268			1,236			1,187			605			592			608
Other non-current assets		(603	)		(542	)		(542	)		—			—			—


(a)		In 2010, the Group covered certain employee pension benefit plans through insurance companies for an amount of €90 million (€757 million in 2008).

As of December 31, 2010, the fair value of pension benefits and other pension benefits which are entirely or partially funded amounted to €7,727 million and the present value of the unfunded benefits amounted to €1,636 million (against €7,206 million and €1,510 million respectively as of December 31, 2009 and €6,515 million and €1,434 million respectively as of December 31, 2008).

Page 48

The experience actuarial (gains) losses related to the defined benefit obligation and the fair value of plan assets are as follows:


For the year ended December 31,
(M€)	2010			2009			2008		2007

Experience actuarial (gains) losses related to the defined benefit obligation		(54	)		(108	)		12		80
Experience actuarial (gains) losses related to the fair value of plan assets		(163	)		(317	)		1,099		140


As of December 31,
(M€)	2010			2009			2008			2007			2006

Pension benefits
Benefit obligation		8,740			8,169			7,405			8,129			8,742
Fair value of plan assets		(6,809	)		(6,286	)		(5,764	)		(6,604	)		(6,401	)

Unfunded status		1,931			1,883			1,641			1,525			2,341


Other benefits
Benefits obligation		623			547			544			583			648
Fair value of plan assets		—			—			—			—			—

Unfunded status		623			547			544			583			648

The Group expects to contribute €251 million to its pension plans in 2011.


Estimated future payments
(M€)	Pension benefits		Other benefits

2011		487		38
2012		478		38
2013		477		38
2014		477		39
2015		497		40
2016-2020		2,628		203


Asset allocation	Pension benefits
As of December 31,	2010			2009			2008

Equity securities		34	%		31	%		25	%
Debt securities		60	%		62	%		56	%
Monetary		3	%		3	%		16	%
Real estate		3	%		4	%		3	%

Page 49

The Group’s assumptions of expected returns on assets are built up by asset class and by country based on long-term bond yields and risk premiums.

The discount rate retained corresponds to the rate of prime corporate bonds according to a benchmark per country of different market data on the closing date.


Assumptions used to determine benefits obligations	Pension benefits									Other benefits
As of December 31,	2010			2009			2008			2010			2009			2008

Discount rate (weighted average for all regions)		5.01	%		5.41	%		5.93	%		5.00	%		5.60	%		6.00	%
Of which Euro zone		4.58	%		5.12	%		5.72	%		4.55	%		5.18	%		5.74	%
Of which United States		5.49	%		6.00	%		6.23	%		5.42	%		5.99	%		6.21	%
Of which United Kingdom		5.50	%		5.50	%		6.00	%		—			—			6.00	%
Average expected rate of salary increase		4.55	%		4.50	%		4.56	%		—			—			—
Expected rate of healthcare inflation
- initial rate		—			—			—			4.82	%		4.91	%		4.88	%
- ultimate rate		—			—			—			3.75	%		3.79	%		3.64	%


Assumptions used to determine the net periodic benefit cost (income)	Pension benefits									Other benefits
For the year ended December 31,	2010			2009			2008			2010			2009			2008

Discount rate (weighted average for all regions)		5.41	%		5.93	%		5.50	%		5.60	%		6.00	%		5.50	%
Of which Euro zone		5.12	%		5.72	%		5.15	%		5.18	%		5.74	%		5.14	%
Of which United States		6.00	%		6.23	%		6.00	%		5.99	%		6.21	%		5.98	%
Of which United Kingdom		5.50	%		6.00	%		5.75	%		—			6.00	%		5.75	%
Average expected rate of salary increase		4.50	%		4.56	%		4.29	%		—			—			—
Expected return on plan assets		6.39	%		6.14	%		6.60	%		—			—			—
Expected rate of healthcare inflation
- initial rate		—			—			—			4.91	%		4.88	%		5.16	%
- ultimate rate		—			—			—			3.79	%		3.64	%		3.64	%

A 0.5% increase or decrease in discount rates — all other things being equal — would have the following approximate impact:


(M€)	0.5% increase			0.5% decrease

Benefit obligation as of December 31, 2010		(520	)		574
2011 net periodic benefit cost (income)		(19	)		52

A 0.5% increase or decrease in expected return on plan assets rate — all other things being equal — would have an impact of €30 million on 2011 net periodic benefit cost (income).

The components of the net periodic benefit cost (income) in 2010, 2009 and 2008 are:


For the year ended December 31,	Pension benefits									Other benefits
(M€)	2010			2009			2008			2010			2009			2008

Service cost		159			134			143			11			10			14
Interest cost		441			428			416			29			30			24
Expected return on plan assets		(396	)		(343	)		(402	)		—			—			—
Amortization of prior service cost		74			13			34			(5	)		(7	)		(10	)
Amortization of actuarial losses (gains)		66			50			22			(4	)		(6	)		(2	)
Asset ceiling		(3	)		4			1			—			—			—
Curtailments		(3	)		(4	)		(3	)		(3	)		(1	)		—
Settlements		7			(1	)		(2	)		—			—			(3	)
Special termination benefits		—			—			—			1			—			—

Net periodic benefit cost (income)		345			281			209			29			26			23

Page 50

A positive or negative change of one-percentage-point in the healthcare inflation rate would have the following approximate impact:


(M€)	1% point increase		1% point decrease

Benefit obligation as of December 31, 2010		63		(52	)
2010 net periodic benefit cost (income)		5		(4	)

19) Provisions and other non-current liabilities


As of December 31,
(M€)	2010		2009		2008

Litigations and accrued penalty claims		485		423		546
Provisions for environmental contingencies		644		623		558
Asset retirement obligations		5,917		5,469		4,500
Other non-current provisions		1,116		1,331		1,804
Other non-current liabilities		936		1,535		450

Total		9,098		9,381		7,858

In 2010, litigation reserves mainly include a provision covering risks concerning antitrust investigations related to Arkema amounting to €17 million as of December 31, 2010. Other risks and commitments that give rise to contingent liabilities are described in Note 32 to the Consolidated Financial Statements.

In 2010, other non-current provisions mainly include:

	•		The contingency reserve related to the Toulouse-AZF plant explosion (civil liability) for €31 million as of December 31, 2010;

	•		Provisions related to restructuring activities in the Downstream and Chemicals segments for €261 million as of December 31, 2010; and

	•		The contingency reserve related to the Buncefield depot explosion (civil liability) for €194 million as of December 31, 2010.

In 2010, other non-current liabilities mainly include debts (whose maturity is more than one year) related to fixed assets acquisitions.

In 2009, litigation reserves mainly include a provision covering risks concerning antitrust investigations related to Arkema amounting to €43 million as of December 31, 2009. Other risks and commitments that give rise to contingent liabilities are described in Note 32 to the Consolidated Financial Statements.

In 2009, other non-current provisions mainly include:

	•		The contingency reserve related to the Toulouse-AZF plant explosion (civil liability) for €40 million as of December 31, 2009;

	•		Provisions related to restructuring activities in the Downstream and Chemicals segments for €130 million as of December 31, 2009; and

	•		The contingency reserve related to the Buncefield depot explosion (civil liability) for €295 million as of December 31, 2009.

In 2009, other non-current liabilities mainly include debts (whose maturity is more than one year) related to fixed assets acquisitions. This heading is mainly composed of a €818 million debt related to Chesapeake acquisition (see Note 3 to the Consolidated Financial Statements).

In 2008, litigation reserves mainly included a provision covering risks concerning antitrust investigations related to Arkema amounting to €85 million as of December 31, 2008. Other risks and commitments that give rise to contingent liabilities are described in Note 32 to the Consolidated Financial Statements.

In 2008, other non-current provisions mainly included the contingency reserve related to the Toulouse-AZF plant explosion (civil liability) for €256 million as of December 31, 2008.

Page 51

Changes in provisions and other non-current liabilities

Changes in provisions and other non-current liabilities are as follows :


								Currency
	As of							translation						As of
(M€)	January 1,		Allowances		Reversals			adjustment			Other			December 31,

2010		9,381		1,052		(971	)		497			(861	)		9,098
2009		7,858		1,254		(1,413	)		202			1,480			9,381
2008		6,843		1,424		(864	)		(460	)		915			7,858

Allowances

In 2010, allowances of the period (€1,052 million) mainly include:

	•		Asset retirement obligations for €338 million (accretion);

	•		Environmental contingencies for €88 million in the Downstream and Chemicals segments;

	•		The contingency reserve related to the Buncefield depot explosion (civil liability) for €79 million; and

	•		Provisions related to restructuring of activities for €226 million.

In 2009, allowances of the period (€1,254 million) mainly included:

	•		Asset retirement obligations for €283 million (accretion);

	•		Environmental contingencies for €147 million in the Downstream and Chemicals segments;

	•		The contingency reserve related to the Buncefield depot explosion (civil liability) for €223 million; and

	•		Provisions related to restructuring of activities for €121 million.

In 2008, allowances of the period (€1,424 million) mainly included:

	•		Asset retirement obligations for €229 million (accretion);

	•		The contingency reserve related to the Toulouse-AZF plant explosion (civil liability) for €140 million;

	•		Environmental contingencies for €89 million;

	•		An allowance of €48 million for litigation reserves in connection with antitrust investigations, as described in Note 32 to the Consolidated Financial Statements “Other risks and contingent liabilities”; and

	•		Provisions related to restructuring of activities for €27 million.

Reversals

In 2010, reversals of the period (€971 million) mainly relate to the following incurred expenses:

	•		Provisions for asset retirement obligations for €214 million;

	•		€26 million for litigation reserves in connection with antitrust investigations;

	•		Environmental contingencies written back for €66 million;

	•		The contingency reserve related to the Toulouse-AZF plant explosion (civil liability), written back for €9 million;

	•		The contingency reserve related to the Buncefield depot explosion (civil liability), written back for €190 million; and

	•		Provisions for restructuring and social plans written back for €60 million.

Page 52

In 2009, reversals of the period (€1,413 million) were mainly related to the following incurred expenses:

	•		Provisions for asset retirement obligations for €191 million;

	•		€52 million for litigation reserves in connection with antitrust investigations;

	•		Environmental contingencies written back for €86 million;

	•		The contingency reserve related to the Toulouse-AZF plant explosion (civil liability), written back for €216 million;

	•		The contingency reserve related to the Buncefield depot explosion (civil liability), written back for €375 million; and

	•		Provisions for restructuring and social plans written back for €28 million.

In 2008, reversals of the period (€864 million) were mainly related to the following incurred expenses:

	•		Provisions for asset retirement obligations for €280 million;

	•		€163 million for litigation reserves in connection with antitrust investigations;

	•		Environmental contingencies written back for €96 million;

	•		The contingency reserve related to the Toulouse-AZF plant explosion (civil liability), written back for €18 million; and

	•		Provisions for restructuring and social plans written back for €10 million.

Changes in the asset retirement obligation

Changes in the asset retirement obligation are as follows:


									Spending on			Currency
	As of				Revision in		New		existing			translation						As of
(M€)	January 1,		Accretion		estimates		obligations		obligations			adjustment			Other			December 31,

2010		5,469		338		79		175		(214	)		316			(246	)		5,917
2009		4,500		283		447		179		(191	)		232			19			5,469
2008		4,206		229		563		188		(280	)		(414	)		8			4,500

20) Financial debt and related financial instruments

A) Non-current financial debt and related financial instruments


As of December 31, 2010
(M€)
(Assets) / Liabilities	Secured		Unsecured			Total

Non-current financial debt		287		20,496			20,783
of which hedging instruments of non-current financial debt (liabilities)		—		178			178
Hedging instruments of non-current financial debt (assets) ^(a)		—		(1,870	)		(1,870	)

Non-current financial debt — net of hedging instruments		287		18,626			18,913


Bonds after fair value hedge		—		15,491			15,491
Fixed rate bonds and bonds after cash flow hedge		—		2,836			2,836
Bank and other, floating rate		47		189			236
Bank and other, fixed rate		65		110			175
Financial lease obligations		175		—			175

Non-current financial debt — net of hedging instruments		287		18,626			18,913


(a)		See the description of these hedging instruments in Notes 1 paragraph M (iii) “Long-term financing”, 28 and 29 to the Consolidated Financial Statements.

Page 53


As of December 31, 2009
(M€)
(Assets) / Liabilities	Secured		Unsecured			Total

Non-current financial debt		312		19,125			19,437
of which hedging instruments of non-current financial debt (liabilities)		—		241			241
Hedging instruments of non-current financial debt (assets) ^(a)		—		(1,025	)		(1,025	)

Non-current financial debt — net of hedging instruments		312		18,100			18,412


Bonds after fair value hedge		—		15,884			15,884
Fixed rate bonds and bonds after cash flow hedge		—		1,700			1,700
Bank and other, floating rate		60		379			439
Bank and other, fixed rate		50		79			129
Financial lease obligations		202		58			260

Non-current financial debt — net of hedging instruments		312		18,100			18,412


(a)		See the description of these hedging instruments in Notes 1 paragraph M(iii) “Long-term financing”, 28 and 29 to the Consolidated Financial Statements.


As of December 31, 2008
(M€)
(Assets) / Liabilities	Secured		Unsecured			Total

Non-current financial debt		895		15,296			16,191
of which hedging instruments of non-current financial debt (liabilities)		—		440			440
Hedging instruments of non-current financial debt (assets) ^(a)		—		(892	)		(892	)

Non-current financial debt — net of hedging instruments		895		14,404			15,299


Bonds after fair value hedge		—		13,380			13,380
Fixed rate bonds and bonds after cash flow hedge		—		287			287
Bank and other, floating rate		553		665			1,218
Bank and other, fixed rate		140		6			146
Financial lease obligations		202		66			268

Non-current financial debt — net of hedging instruments		895		14,404			15,299


(a)		See the description of these hedging instruments in Notes 1 paragraph M(iii) “Long-term financing”, 28 and 29 to the Consolidated Financial Statements.

Page 54

Fair value of bonds, as of December 31, 2010, after taking into account currency and interest rates swaps, is detailed as follows:


			Fair value after		Fair value after			Fair value after
			hedging as of		hedging as of			hedging as of
Bonds after fair value hedge	Year of		December 31,		December 31,			December 31,						Initial rate before hedging
(M€)	issue		2010		2009			2008			Currency	Maturity		instruments

Parent company
Bond		1997		—		—			124		FRF		2009		6.200	%
Bond		1998		—		—			119		FRF		2009		5.125	%
Bond		1998		125		116			121		FRF		2013		5.000	%
Bond		2000		—		61			63		EUR		2010		5.650	%
Current portion (less than one year)				—		(61	)		(243	)

Total parent company				125		116			184

Elf Aquitaine SA
Bond		1999		—		—			1 003		EUR		2009		4.500	%
Current portion (less than one year)				—		—			(1 003	)

Total Elf Aquitaine SA				—		—			-

TOTAL CAPITAL ^(a)
Bond		2002		15		14			14		USD		2012		5.890	%
Bond		2003		—		—			52		AUD		2009		6.250	%
Bond		2003		—		—			154		CHF		2009		2.385	%
Bond		2003		—		160			166		CHF		2010		2.385	%
Bond		2003		22		21			22		USD		2013		4.500	%
Bond		2003-2004		—		—			395		USD		2009		3.500	%
Bond		2004		—		—			57		AUD		2009		6.000	%
Bond		2004		—		—			28		AUD		2009		6.000	%
Bond		2004		—		53			55		CAD		2010		4.000	%
Bond		2004		—		113			117		CHF		2010		2.385	%
Bond		2004		—		438			454		EUR		2010		3.750	%
Bond		2004		—		322			334		GBP		2010		4.875	%
Bond		2004		—		128			132		GBP		2010		4.875	%
Bond		2004		—		185			191		GBP		2010		4.875	%
Bond		2004		57		53			55		AUD		2011		5.750	%
Bond		2004		116		107			111		CAD		2011		4.875	%
Bond		2004		235		203			216		USD		2011		4.125	%
Bond		2004		75		69			72		USD		2011		4.125	%
Bond		2004		125		116			120		CHF		2012		2.375	%
Bond		2004		51		47			49		NZD		2014		6.750	%
Bond		2005		—		—			36		USD		2009		3.500	%
Bond		2005		57		53			55		AUD		2011		5.750	%
Bond		2005		60		56			58		CAD		2011		4.000	%
Bond		2005		120		112			116		CHF		2011		1.625	%
Bond		2005		226		226			226		CHF		2011		1.625	%
Bond		2005		139		144			144		USD		2011		4.125	%
Bond		2005		63		63			63		AUD		2012		5.750	%
Bond		2005		194		180			187		CHF		2012		2.135	%
Bond		2005		65		65			65		CHF		2012		2.135	%
Bond		2005		97		97			98		CHF		2012		2.375	%
Bond		2005		391		363			376		EUR		2012		3.250	%
Bond		2005		57		57			57		NZD		2012		6.500	%
Bond		2006		—		75			75		GBP		2010		4.875	%
Bond		2006		—		50			50		EUR		2010		3.750	%
Bond		2006		—		50			50		EUR		2010		3.750	%
Bond		2006		—		100			102		EUR		2010		3.750	%
Bond		2006		42		42			42		EUR		2011	EURIBOR 3 months +0.040%
Bond		2006		300		300			300		EUR		2011		3.875	%
Bond		2006		150		150			150		EUR		2011		3.875	%
Bond		2006		300		300			300		EUR		2011		3.875	%
Bond		2006		120		120			120		USD		2011		5.000	%
Bond		2006		300		300			300		EUR		2011		3.875	%
Bond		2006		472		472			473		USD		2011		5.000	%
Bond		2006		62		62			62		AUD		2012		5.625	%
Bond		2006		72		72			72		CAD		2012		4.125	%
Bond		2006		100		100			100		EUR		2012		3.250	%
Bond		2006		74		74			74		GBP		2012		4.625	%
Bond		2006		100		100			100		EUR		2012		3.250	%
Bond		2006		125		125			125		CHF		2013		2.510	%
Bond		2006		127		127			127		CHF		2014		2.635	%
Bond		2006		130		130			130		CHF		2016		2.385	%
Bond		2006		65		65			65		CHF		2016		2.385	%
Bond		2006		64		64			64		CHF		2016		2.385	%
Bond		2006		63		63			64		CHF		2016		2.385	%
Bond		2006		129		129			129		CHF		2018		3.135	%
Bond		2007		—		60			60		CHF		2010		2.385	%
Bond		2007		—		74			74		GBP		2010		4.875	%
Bond		2007		77		77			77		USD		2011		5.000	%
Bond		2007		370		370			370		USD		2012		5.000	%
Bond		2007		222		222			222		USD		2012		5.000	%
Bond		2007		61		61			61		AUD		2012		6.500	%
Bond		2007		72		72			72		CAD		2012		4.125	%
Bond		2007		71		71			71		GBP		2012		4.625	%
Bond		2007		300		300			300		EUR		2013		4.125	%
Bond		2007		73		73			74		GBP		2013		5.500	%
Bond		2007		306		306			306		GBP		2013		5.500	%
Bond		2007		72		72			73		GBP		2013		5.500	%
Bond		2007		248		248			248		CHF		2014		2.635	%

Page 55


			Fair value after			Fair value after			Fair value after
			hedging as of			hedging as of			hedging as of
Bonds after fair value hedge	Year of		December 31,			December 31,			December 31,							Initial rate before hedging
(M€)	issue		2010			2009			2008			Currency	Maturity			instruments

TOTAL CAPITAL ^(a)
Bond		2007		31			31			31		JPY		2014			1.505	%
Bond		2007		61			61			61		CHF		2014			2.635	%
Bond		2007		49			49			49		JPY		2014			1.723	%
Bond		2007		121			121			121		CHF		2015			3.125	%
Bond		2007		300			300			300		EUR		2017			4.700	%
Bond		2007		76			76			76		CHF		2018			3.135	%
Bond		2007		60			60			60		CHF		2018			3.135	%
Bond		2008		—			63			63		GBP		2010			4.875	%
Bond		2008		—			66			66		GBP		2010			4.875	%
Bond		2008		92			92			92		AUD		2011			7.500	%
Bond		2008		100			100			100		EUR		2011			3.875	%
Bond		2008		150			150			151		EUR		2011			3.875	%
Bond		2008		50			50			50		EUR		2011			3.875	%
Bond		2008		50			50			50		EUR		2011			3.875	%
Bond		2008		60			60			60		JPY		2011	EURIBOR 6 months + 0.018%
Bond		2008		102			102			102		USD		2011			3.750	%
Bond		2008		62			62			62		CHF		2012			2.135	%
Bond		2008		124			124			124		CHF		2012			3.635	%
Bond		2008		46			46			46		CHF		2012			2.385	%
Bond		2008		92			92			92		CHF		2012			2.385	%
Bond		2008		64			64			64		CHF		2012			2.385	%
Bond		2008		50			50			50		EUR		2012			3.250	%
Bond		2008		63			63			63		GBP		2012			4.625	%
Bond		2008		63			63			63		GBP		2012			4.625	%
Bond		2008		63			63			64		GBP		2012			4.625	%
Bond		2008		62			62			62		NOK		2012			6.000	%
Bond		2008		69			69			69		USD		2012			5.000	%
Bond		2008		60			60			60		AUD		2013			7.500	%
Bond		2008		61			61			61		AUD		2013			7.500	%
Bond		2008		127			127			128		CHF		2013			3.135	%
Bond		2008		62			62			63		CHF		2013			3.135	%
Bond		2008		200			200			200		EUR		2013			4.125	%
Bond		2008		100			100			100		EUR		2013			4.125	%
Bond		2008		1,000			1,000			1,002		EUR		2013			4.750	%
Bond		2008		63			63			63		GBP		2013			5.500	%
Bond		2008		149			149			149		JPY		2013	EURIBOR 6 months + 0.008%
Bond		2008		191			191			194		USD		2013			4.000	%
Bond		2008		61			61			61		CHF		2015			3.135	%
Bond		2008		62			62			62		CHF		2015			3.135	%
Bond		2008		61			61			62		CHF		2015			3.135	%
Bond		2008		62			62			62		CHF		2018			3.135	%
Bond		2009		56			56			—		AUD		2013			5.500	%
Bond		2009		54			54			—		AUD		2013			5.500	%
Bond		2009		236			236			—		CHF		2013			2.500	%
Bond		2009		77			77			—		USD		2013			4.000	%
Bond		2009		131			131			—		CHF		2014			2.625	%
Bond		2009		997			998			—		EUR		2014			3.500	%
Bond		2009		150			150			—		EUR		2014			3.500	%
Bond		2009		40			40			—		HKD		2014			3.240	%
Bond		2009		103			96			—		AUD		2015			6.000	%
Bond		2009		550			550			—		EUR		2015			3.625	%
Bond		2009		684			684			—		USD		2015			3.125	%
Bond		2009		224			208			—		USD		2015			3.125	%
Bond		2009		99			99			—		CHF		2016			2.385	%
Bond		2009		115			115			—		GBP		2017			4.250	%
Bond		2009		225			225			—		GBP		2017			4.250	%
Bond		2009		448			448			—		EUR		2019			4.875	%
Bond		2009		69			69			—		HKD		2019			4.180	%
Bond		2009		374			347			—		USD		2021			4.250	%
Bond		2010		102								AUD		2014			5.750	%
Bond		2010		108								CAD		2014			2.500	%
Bond		2010		53								NZD		2014			4.750	%
Bond		2010		187								USD		2015			2.875	%
Bond		2010		935								USD		2015			3.000	%
Bond		2010		748								USD		2016			2.300	%
Bond		2010		68								AUD		2015			6.000	%
Bond		2010		69								AUD		2015			6.000	%
Bond		2010		64								AUD		2015			6.000	%
Bond		2010		476								EUR		2022			3.125	%
Current portion (less than one year)				(3,450	)		(1,937	)		(722	)
Total TOTAL CAPITAL				15,143			15,615			13,093


Other consolidated subsidiaries				223			153			103

Total bonds after fair value hedge				15,491			15,884			13,380

Page 56


			Amount after		Amount after		Amount after
			hedging as of		hedging as of		hedging as of					Initial rate before
Fixed rate bonds and bonds after cash flow hedge	Year of		December 31,		December 31,		December 31,					hedging
(M€)	issue		2010		2009		2008		Currency	Maturity		instruments

TOTAL CAPITAL ^(a)
Bond		2005		293		292		287	GBP		2012		4.625	%
Bond		2009		691		602		—	EUR		2019		4.875	%
Bond		2009		917		806		—	EUR		2024		5.125	%
Bond		2010		935					USD		2020		4.450	%
Total fixed rate bonds and bonds after cash flow hedge				2,836		1,700		287


(a)		TOTAL CAPITAL is a wholly-owned indirect subsidiary of TOTAL S.A. (with the exception of one share held by each member of its Board of Directors). It acts as a financing vehicle for the Group. Its debt securities are fully and unconditionally guaranteed by TOTAL S.A. as to payment of principal, premium, if any, interest and any other amounts due.

Loan repayment schedule (excluding current portion)


			*of which hedging*
			*instruments of*		Hedging instruments of
			*non-current*		non-current			Non-current financial
As of December 31, 2010	Non-current		*financial debt*		financial debt			debt — net of hedging
(M€)	financial debt		*(liabilities)*		(assets)			instruments		%

2012		3,756		34		( 401	)		3,355		18	%
2013		4,017		76		( 473	)		3,544		19	%
2014		2,508		1		( 290	)		2,218		12	%
2015		3,706		2		( 302	)		3,404		18	%
2016 and beyond		6,796		65		( 404	)		6,392		33	%

Total		20,783		*178*		(1 870	)		18,913		100	%


			*of which hedging*
			*instruments of*		Hedging instruments
			*non-current*		of non-current			Non-current financial
As of December 31, 2009	Non-current		*financial debt*		financial debt			debt — net of hedging
(M€)	financial debt		*(liabilities)*		(assets)			instruments		%

2011		3,857		42		( 199	)		3,658		20	%
2012		3,468		48		( 191	)		3,277		18	%
2013		3,781		95		( 236	)		3,545		19	%
2014		2,199		6		( 90	)		2,109		11	%
2015 and beyond		6,132		50		( 309	)		5,823		32	%

Total		19,437		*241*		(1 025	)		18,412		100	%


			*of which hedging*
			*instruments of*		Hedging instruments
			*non-current*		of non-current			Non-current financial
As of December 31, 2008	Non-current		*financial debt*		financial debt			debt — net of hedging
(M€)	financial debt		*(liabilities)*		(assets)			instruments		%

2010		3,160		170		( 168	)		2,992		20	%
2011		3,803		24		( 145	)		3,658		24	%
2012		3,503		115		( 179	)		3,324		22	%
2013		3,430		127		( 198	)		3,232		21	%
2014 and beyond		2,295		4		( 202	)		2,093		13	%

Total		16,191		*440*		( 892	)		15,299		100	%

Page 57

Analysis by currency and interest rate

These analyses take into account interest rate and foreign currency swaps to hedge non-current financial debt.


As of December 31,
(M€)	2010		%			2009		%			2008		%

U.S. Dollar		7,248		39	%		3,962		21	%		3,990		26	%
Euro		11,417		60	%		14,110		77	%		10,685		70	%
Other currencies		248		1	%		340		2	%		624		4	%

Total		18,913		100	%		18,412		100	%		15,299		100	%


As of December 31,
(M€)	2010		%			2009		%			2008		%

Fixed rate		3,177		17	%		2,064		11	%		633		4	%
Floating rate		15,736		83	%		16,348		89	%		14,666		96	%

Total		18,913		100	%		18,412		100	%		15,299		100	%

B) Current financial assets and liabilities

Current borrowings consist mainly of commercial papers or treasury bills or draws on bank loans. These instruments bear interest at rates that are close to market rates.


As of December 31,
(M€)	2010			2009			2008

(Assets) / Liabilities
Current financial debt ^(a)		5,867			4,761			5,586
Current portion of non-current financial debt		3,786			2,233			2,136

Current borrowings (note 28)		9,653			6,994			7,722

Current portion of hedging instruments of debt (liabilities)		12			97			12
Other current financial instruments (liabilities)		147			26			146

Other current financial liabilities (note 28)		159			123			158

Current deposits beyond three months		(869	)		(55	)		(1	)
Current portion of hedging instruments of debt (assets)		(292	)		(197	)		(100	)
Other current financial instruments (assets)		(44	)		(59	)		(86	)

Current financial assets (note 28)		(1,205	)		(311	)		(187	)


Current borrowings and related financial assets and liabilities, net		8,607			6,806			7,693


(a)		As of December 31, 2010, the current financial debt includes a commercial paper program in Total Capital Canada Ltd. Total Capital Canada Ltd. is a wholly-owned direct subsidiary of TOTAL S.A. It acts as a financing vehicle for the activities of the Group in Canada. Its debt securities are fully and unconditionally guaranteed by TOTAL S.A. as to payment of principal, premium, if any, interest and any other amounts due.

Page 58

C) Net-debt-to-equity ratio

For its internal and external communication needs, the Group calculates a debt ratio by dividing its net financial debt by equity. Shareholders’ equity as of December 31, 2010 is calculated after distribution of a dividend of €2.28 per share of which €1.14 per share was paid on November 17, 2010.

The net-debt-to-equity ratio is calculated as follows:


As of December 31,
(M€)	2010			2009			2008

(Assets) / Liabilities
Current borrowings		9,653			6,994			7,722
Other current financial liabilities		159			123			158
Current financial assets		(1,205	)		(311	)		(187	)
Non-current financial debt		20,783			19,437			16,191
Hedging instruments on non-current financial debt		(1,870	)		(1,025	)		(892	)
Cash and cash equivalents		(14,489	)		(11,662	)		(12,321	)

Net financial debt		13,031			13,556			10,671

Shareholders’ equity — Group share		60,414			52,552			48,992
Estimated dividend payable		(2,553	)		(2,546	)		(2,540	)
Minority interest		857			987			958

Total shareholder’s equity		58,718			50,993			47,410


Net-debt-to-equity ratio		22.2	%		26.6	%		22.5	%

21) Other creditors and accrued liabilities


As of December 31,
(M€)	2010		2009		2008

Accruals and deferred income		184		223		151
Payable to States (including taxes and duties)		7,235		6,024		6,256
Payroll		996		955		928
Other operating liabilities		3,574		4,706		4,297

Total		11,989		11,908		11,632

As of December 31, 2009, the heading “Other operating liabilities” mainly included €744 million related to Chesapeake acquisition (see Note 3 to the Consolidated Financial Statements).

Page 59

22) Lease contracts

The Group leases real estate, retail stations, ships, and other equipments (see Note 11 to the Consolidated Financial Statements).

The future minimum lease payments on operating and finance leases to which the Group is committed are shown as follows:


For the year ended December 31, 2010
(M€)	Operating leases		Finance leases

2011		582		39
2012		422		39
2013		335		39
2014		274		35
2015		230		35
2016 and beyond		1,105		54

Total minimum payments		2,948		241
Less financial expenses		—		(43	)

Nominal value of contracts		—		198
Less current portion of finance lease contracts		—		(23	)

Outstanding liability of finance lease contracts		—		175


For the year ended December 31, 2009
(M€)	Operating leases		Finance leases

2010		523		42
2011		377		43
2012		299		42
2013		243		41
2014		203		39
2015 and beyond		894		128

Total minimum payments		2,539		335
Less financial expenses		—		(53	)

Nominal value of contracts		—		282
Less current portion of finance lease contracts		—		(22	)

Outstanding liability of finance lease contracts		—		260


For the year ended December 31, 2008
(M€)	Operating leases		Finance leases

2009		429		47
2010		306		42
2011		243		42
2012		208		42
2013		166		40
2014 and beyond		675		148

Total minimum payments		2,027		361
Less financial expenses		—		(70	)

Nominal value of contracts		—		291
Less current portion of finance lease contracts		—		(23	)

Outstanding liability of finance lease contracts		—		268

Net rental expense incurred under operating leases for the year ended December 31, 2010 is €605 million (against €613 million in 2009 and €426 million in 2008).

Page 60

23) Commitments and contingencies


	Maturity and installments
As of December 31, 2010			Less than 1		Between 1		More than 5
(M€)	Total		year		and 5 years		years

Non-current debt obligations net of hedging instruments (Note 20)		18,738		—		12,392		6,346
Current portion of non-current debt obligations net of hedging instruments (Note 20)		3,483		3,483		—		—
Finance lease obligations (Note 22)		198		23		129		46
Asset retirement obligations (Note 19)		5,917		177		872		4,868

Contractual obligations recorded in the balance sheet		28,336		3,683		13,393		11,260
Operating lease obligations (Note 22)		2,948		582		1,261		1,105
Purchase obligations		61,293		6,347		14,427		40,519

Contractual obligations not recorded in the balance sheet		64,241		6,929		15,688		41,624

Total of contractual obligations		92,577		10,612		29,081		52,884


Guarantees given for excise taxes		1,753		1,594		71		88
Guarantees given against borrowings		5,005		1,333		493		3,179
Indemnities related to sales of businesses		37		—		31		6
Guarantees of current liabilities		171		147		19		5
Guarantees to customers / suppliers		3,020		1,621		96		1,303
Letters of credit		1,250		1,247		—		3
Other operating commitments		2,057		467		220		1,370

Total of other commitments given		13,293		6,409		930		5,954


Mortgages and liens received		429		2		114		313
Other commitments received		6,387		3,878		679		1,830

Total of commitments received		6,816		3,880		793		2,143


	Maturity and installments
As of December 31, 2009			Less than 1		Between 1		More than 5
(M€)	Total		year		and 5 years		years

Non-current debt obligations net of hedging instruments (Note 20)		18,152		—		12,443		5,709
Current portion of non-current debt obligations net of hedging instruments (Note 20)		2,111		2,111		—		—
Finance lease obligations (Note 22)		282		22		146		114
Asset retirement obligations (Note 19)		5,469		235		972		4,262

Contractual obligations recorded in the balance sheet		26,014		2,368		13,561		10,085
Operating lease obligations (Note 22)		2,539		523		1,122		894
Purchase obligations		49,808		4,542		9,919		35,347

Contractual obligations not recorded in the balance sheet		52,347		5,065		11,041		36,241

Total of contractual obligations		78,361		7,433		24,602		46,326


Guarantees given for excise taxes		1,765		1,617		69		79
Guarantees given against borrowings		2,882		1,383		709		790
Indemnities related to sales of businesses		36		—		1		35
Guarantees of current liabilities		203		160		38		5
Guarantees to customers / suppliers		2,770		1,917		70		783
Letters of credit		1,499		1,485		2		12
Other operating commitments		765		582		103		80

Total of other commitments given		9,920		7,144		992		1,784


Mortgages and liens received		330		5		106		219
Other commitments received		5,637		3,187		481		1,969

Total of commitments received		5,967		3,192		587		2,188

Page 61


	Maturity and installments
As of December 31, 2008			Less than		Between 1		More than
(M€)	Total		1 year		and 5 years		5 years

Non-current debt obligations net of hedging instruments (Note 20)		15,031		—		13,064		1,967
Current portion of non-current debt obligations net of hedging instruments (Note 20)		2,025		2,025		—		—
Finance lease obligations (Note 22)		291		23		142		126
Asset retirement obligations (Note 19)		4,500		154		653		3,693

Contractual obligations recorded in the balance sheet		21,847		2,202		13,859		5,786
Operating lease obligations (Note 22)		2,027		429		923		675
Purchase obligations		60,226		4,420		13,127		42,679

Contractual obligations not recorded in the balance sheet		62,253		4,849		14,050		43,354

Total of contractual obligations		84,100		7,051		27,909		49,140


Guarantees given for excise taxes		1,720		1,590		58		72
Guarantees given against borrowings		2,870		1,119		519		1,232
Indemnities related to sales of businesses		39		3		1		35
Guarantees of current liabilities		315		119		164		32
Guarantees to customers / suppliers		2,866		68		148		2,650
Letters of credit		1,080		1,024		17		39
Other operating commitments		648		246		132		270

Total of other commitments given		9,538		4,169		1,039		4,330


Mortgages and liens received		321		72		110		139
Other commitments received		4,218		2,440		234		1,544

Total of commitments received		4,539		2,512		344		1,683

A. Contractual obligations

Debt obligations

“Non-current debt obligations” are included in the items “Non-current financial debt” and “Hedging instruments of non-current financial debt” of the Consolidated Balance Sheet. It includes the non-current portion of swaps hedging bonds, and excludes non-current finance lease obligations of €175 million.

The current portion of non-current debt is included in the items “Current borrowings”, “Current financial assets” and “Other current financial liabilities” of the Consolidated Balance Sheet. It includes the current portion of swaps hedging bonds, and excludes the current portion of finance lease obligations of €23 million.

The information regarding contractual obligations linked to indebtedness is presented in Note 20 to the Consolidated Financial Statements.

Lease contracts

The information regarding operating and finance leases is presented in Note 22 to the Consolidated Financial Statements.

Asset retirement obligations

This item represents the discounted present value of Upstream asset retirement obligations, primarily asset removal costs at the completion date. The information regarding contractual obligations linked to asset retirement obligations is presented in Notes 1Q and 19 to the Consolidated Financial Statements.

Purchase obligations

Purchase obligations are obligations under contractual agreements to purchase goods or services, including capital projects. These obligations are enforceable and legally binding on the company and specify all significant terms, including the amount and the timing of the payments.

These obligations mainly include: hydrocarbon unconditional purchase contracts (except where an active, highly-liquid market exists and when the hydrocarbons are expected to be re-sold shortly after purchase), reservation of transport capacities in pipelines, unconditional exploration works and development works in the Upstream segment, and contracts for capital investment projects in the Downstream segment.

Page 62

B. Other commitments given

Guarantees given for excise taxes

They consist of guarantees given to other oil and gas companies in order to comply with French tax authorities’ requirements for oil and gas imports in France. A payment would be triggered by a failure of the guaranteed party with respect to the French tax authorities. The default of the guaranteed parties is however considered to be highly remote by the Group.

Guarantees given against borrowings

The Group guarantees bank debt and finance lease obligations of certain non-consolidated subsidiaries and equity affiliates. Maturity dates vary, and guarantees will terminate on payment and/or cancellation of the obligation. A payment would be triggered by failure of the guaranteed party to fulfill its obligation covered by the guarantee, and no assets are held as collateral for these guarantees. As of December 31, 2010, the maturities of these guarantees are up to 2023.

Guarantees given against borrowings include the guarantee given in 2008 by TOTAL S.A. in connection with the financing of the Yemen LNG project for an amount of €1,335 million. In turn, certain partners involved in this project have given commitments that could, in the case of Total S.A.’s guarantees being called for the maximum amount, reduce the Group’s exposure by up to €427 million, recorded under “Other commitments received”.

In 2010, TOTAL S.A. provided guarantees in connection with the financing of the Jubail project (operated by SAUDI ARAMCO TOTAL Refining and Petrochemical Company (SATORP)) of up to €2,385 million, proportional to TOTAL’s share in the project (37.5%). In addition, TOTAL S.A. provided in 2010 a guarantee in favor of its partner in the Jubail project (Saudi Arabian Oil Company) with respect to Total Refining Saudi Arabia SAS’s obligations under the shareholders agreement with respect to SATORP. As of December 31, 2010, this guarantee is of up to €1,271 million and has been recorded under “Other operating commitments”.

Indemnities related to sales of businesses

In the ordinary course of business, the Group executes contracts involving standard indemnities in oil industry and indemnities specific to transactions such as sales of businesses. These indemnities might include claims against any of the following: environmental, tax and shareholder matters, intellectual property rights, governmental regulations and employment-related matters, dealer, supplier, and other commercial contractual relationships. Performance under these indemnities would generally be triggered by a breach of terms of the contract or by a third party claim. The Group regularly evaluates the probability of having to incur costs associated with these indemnities.

The guarantees related to antitrust investigations granted as part of the agreement relating to the spin-off of Arkema are described in Note 32 to the Consolidated Financial Statements.

Other guarantees given

Non-consolidated subsidiaries

The Group also guarantees the current liabilities of certain non-consolidated subsidiaries. Performance under these guarantees would be triggered by a financial default of the entity.

Operating agreements

As part of normal ongoing business operations and consistent with generally and accepted recognized industry practices, the Group enters into numerous agreements with other parties. These commitments are often entered into for commercial purposes, for regulatory purposes or for other operating agreements.

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24) Related parties

The main transactions and balances with related parties (principally non-consolidated subsidiaries and equity affiliates) are detailed as follows:


As of December 31,
(M€)	2010		2009		2008

Balance sheet
Receivables
Debtors and other debtors		432		293		244
Loans (excl. loans to equity affiliates)		315		438		354
Payables
Creditors and other creditors		497		386		136
Debts		28		42		50


For the year ended December 31,
(M€)	2010		2009		2008

Statement of income
Sales		3,194		2,183		3,082
Purchases		5,576		2,958		4,061
Financial expense		69		1		—
Financial income		74		68		114

Compensation for the administration and management bodies

The aggregate amount paid directly or indirectly by the French and foreign affiliates of the Company as compensation to the executive officers of TOTAL (the members of the Management Committee and the Treasurer) and to the members of the Board of Directors who are employees of the Group, is detailed as follows:


For the year ended December 31,
(M€)	2010		2009		2008

Number of people		26		27		30

Direct or indirect compensation		20.8		19.4		20.4
Pension expenses^(a)		12.2		10.6		11.9
Other long-term benefits		—		—		—
Termination benefits		—		—		—
Share-based payments expense (IFRS 2)^(b)		10.0		11.2		16.6


(a)		The benefits provided for executive officers and certain members of the Board of Directors, employees and former employees of the Group, include severance to be paid on retirement, supplementary pension schemes and insurance plans, which represent €113.8 million provisioned as of December 31, 2010 (against €96.6 million as of December 31, 2009 and €98.0 million as of December 31, 2008).

(b)		Share-based payments expense computed for the executive officers and the members of the Board of Directors who are employees of the Group as described in Note 25 paragraph E to the Consolidated Financial Statements and based on the principles of IFRS 2 “Share-based payments” described in Note 1 paragraph E to the Consolidated Financial Statements.

The compensation allocated to members of the Board of Directors for directors’ fees totaled €0.96 million in 2010 (€0.97 million in 2009 and €0.83 million in 2008).

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25) Share-based payments

A. TOTAL share subscription option plans


																												Weighted
																												average
																												exercise
	2003 Plan			2004 Plan			2005 Plan			2006 Plan			2007 Plan			2008 Plan			2009 Plan			2010 Plan			Total			price

Date of the shareholders’ meeting		05/17/2001			05/14/2004			05/14/2004			05/14/2004			05/11/2007			05/11/2007			05/11/2007			05/21/2010
Grant Date ^(a)		07/16/2003			07/20/2004			07/19/2005			07/18/2006			07/17/2007			10/09/2008			09/15/2009			09/14/2010
Exercise price until May 23, 2006 included ^(b)		33.30			39.85			49.73			—			—			—			—			—
Exercise price since May 24, 2006 ^(b)		32.84			39.30			49.04			50.60			60.10			42.90			39.90			38.20
Expiry date		07/16/2011			07/20/2012			07/19/2013			07/18/2014			07/17/2015			10/09/2016			09/15/2017			09/14/2018

Number of options ^(c)
Outstanding as of January 1, 2008		8,368,378			13,197,236			6,243,438			5,711,060			5,920,105												39,440,217			44.23
Awarded		—			—			—			—			—			4,449,810									4,449,810			42.90
Canceled		(25,184	)		(118,140	)		(34,032	)		(53,304	)		(34,660	)		(6,000	)								(271,320	)		44.88
Exercised		(841,846	)		(311,919	)		(17,702	)		(6,700	)		—			—									(1,178,167	)		34.89
Outstanding as of January 1, 2009		7,501,348			12,767,177			6,191,704			5,651,056			5,885,445			4,443,810									42,440,540			44.35
Awarded		—			—			—			—			—			—			4,387,620						4,387,620			39.90
Canceled		(8,020	)		(18,387	)		(6,264	)		(5,370	)		(13,780	)		(2,180	)		(10,610	)					(64,611	)		45.04
Exercised		(681,699	)		(253,081	)		—			—			—			—			—						(934,780	)		34.59
Outstanding as of January 1, 2010		6,811,629			12,495,709			6,185,440			5,645,686			5,871,665			4,441,630			4,377,010						45,828,769			44.12
Awarded		—			—			—			—			—			—			—			4,788,420			4,788,420			38.20
Canceled ^(d)		(1,420	)		(15,660	)		(6,584	)		(4,800	)		(5,220	)		(92,472	)		(4,040	)		(1,120	)		(131,316	)		43.50
Exercised		(1,075,765	)		(141,202	)		—			—			—			—			(1,080	)		—			(1,218,047	)		33.60
Outstanding as of December 31, 2010		5,734,444			12,338,847			6,178,856			5,640,886			5,866,445			4,349,158			4,371,890			4,787,300			49,267,826			43.80


(a)		The grant date is the date of the Board meeting awarding the share subscription options, except for the grant of October 9, 2008, decided by the Board on September 9, 2008.

(b)		Exercise price in euro. The exercise prices of TOTAL subscription shares of the plans in force at that date were multiplied by 0.25 to take into account the four-for-one stock split on May 18, 2006. Moreover, following the spin-off of Arkema, the exercise prices of TOTAL subscription shares of these plans were multiplied by an adjustment factor equal to 0.986147 effective as of May 24, 2006.

(c)		The number of options awarded, outstanding, canceled or exercised before May 23, 2006 included, was multiplied by four to take into account the four-for-one stock split approved by the shareholders’ meeting on May 12, 2006.

(d)		Out of 92,472 options awarded under the 2008 Plan that were canceled, 88,532 options were canceled due to the performance condition. The acquisition rate applicable to the subscription options that were subject to the performance condition of the 2008 Plan was 60%.

Options are exercisable, subject to a continued employment condition, after a 2-year period from the date of the Board meeting awarding the options and expire eight years after this date. The underlying shares may not be transferred during four years from the date of grant. For the 2007, 2008, 2009 and 2010 Plans, the four-year transfer restriction period does not apply to employees of non-French subsidiaries as of the date of the grant, who may transfer the underlying shares after a two-year period from the date of the grant.

The continued employment condition states that the termination of the employment contract will result in the employee losing the right to exercise the options.

For the 2010 Plan, the Board of Directors decided that:

•		For each grantee of up to 3,000 options, other than the Chairman and Chief Executive Officer, the options will be finally granted to their beneficiary.

•		For each grantee of more than 3,000 options and less or equal to 50,000 options (other than the Chairman and Chief Executive Officer):

	•		The first 3,000 options and two-thirds above the first 3,000 options will be finally granted to their beneficiary;

	•		The outstanding options, that is one-third of the options above the first 3,000 options, will be finally granted provided that the performance condition described below is fulfilled.

•

For each grantee of more than 50,000 options, other than the Chairman and Chief Executive Officer:

	•		The first 3,000 options, two-thirds of the options above the first 3,000 options and below the first 50,000 options, and one-third of the options above the first 50,000 options, will be finally granted to their beneficiary;

	•		The outstanding options, that is one-third of the options above the first 3,000 options and below the first 50,000 options and two-thirds of the options above the first 50,000 options, will be finally granted provided that the performance condition is fulfilled.

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The performance condition states that the number of options finally granted is based on the average of the Return On Equity (ROE) of the Group. The average ROE is calculated by the Group based on TOTAL’s consolidated balance sheet and statement of income for fiscal years 2010 and 2011. The acquisition rate:

	•		is equal to zero if the average ROE is less than or equal to 7%;

	•		varies on straight-line basis between 0% and 100% if the average ROE is more than 7% and less than 18%; and

	•		is equal to 100% if the average ROE is more than or equal to 18%.

In addition, as part of the 2010 plan, the Board of Directors decided that the number of share subscription options finally awarded to the Chairman and Chief Executive Officer will be subject to two performance conditions:

	•		For 50% of the share subscription options granted, the performance condition states that the number of options finally granted is based on the average ROE of the Group. The average ROE is calculated by the Group based on TOTAL’s consolidated balance sheet and statement of income for fiscal years 2010 and 2011. The acquisition rate is equal to zero if the average ROE is less than or equal to 7%; varies on a straight-line basis between 0% and 100% if the average ROE is more than 7% and less than 18%; and is equal to 100% if the average ROE is more than or equal to 18%.

	•		For 50% of the share subscription options granted, the performance condition states that the number of options finally granted is based on the average of the Return On Average Capital Employed (ROACE) of the Group. The average ROACE is calculated by the Group based on TOTAL’s consolidated balance sheet and statement of income for fiscal years 2010 and 2011. The acquisition rate is equal to zero if the average ROACE is less than or equal to 6%; varies on a straight-line basis between 0% and 100% if the average ROACE is more than 6% and less than 15%; and is equal to 100% if the average ROACE is more than or equal to 15%.

For the 2009 Plan, the Board of Directors decided that for each beneficiary, other than the Chief Executive Officer, of more than 25,000 options, one third of the options granted in excess of this number will be finally granted subject to a performance condition. This condition states that the final number of options finally granted is based on the average ROE of the Group as published by TOTAL. The average ROE is calculated based on the Group’s consolidated balance sheet and statement of income for fiscal years 2009 and 2010. The acquisition rate:

	•		is equal to zero if the average ROE is less than or equal to 7%;

	•		varies on straight-line basis between 0% and 100% if the average ROE is more than 7% and less than 18%; and

	•		is equal to 100% if the average ROE is more than or equal to 18%.

In addition, the Board of Directors decided that, for the Chief Executive Officer, the number of share subscription options finally granted will be subject to two performance conditions:

	•		For 50% of the share subscription options granted, the performance condition states that the number of options finally granted is based on the average ROE of the Group as published by TOTAL. The average ROE is calculated based on the Group’s consolidated balance sheet and statement of income for fiscal years 2009 and 2010. The acquisition rate is equal to zero if the average ROE is less than or equal to 7%; varies on a straight-line basis between 0% and 100% if the average ROE is more than 7% and less than 18%; and is equal to 100% if the average ROE is more than or equal to 18%.

	•		For 50% of the share subscription options granted, the performance condition states that the number of options finally granted is based on the average ROACE of the Group as published by TOTAL. The average ROACE is calculated based on the Group’s consolidated balance sheet and statement of income for fiscal years 2009 and 2010. The acquisition rate is equal to zero if the average ROACE is less than or equal to 6%; varies on a straight-line basis between 0% and 100% if the average ROACE is more than 6% and less than 15%; and is equal to 100% if the average ROACE is more than or equal to 15%.

Page 66

For the 2008 Plan, the Board of Directors decided that for each beneficiary of more than 25,000 options, one third of the options in excess of this number will be finally granted subject to a performance condition. This condition states that the number of subscription options finally granted is based on the ROE of the Group. The ROE is calculated based on the consolidated accounts published by TOTAL for the fiscal year preceding the final grant. The acquisition rate:

	•		is equal to zero if the ROE is less than or equal to 10%;

	•		varies on a straight-line basis between 0% and 80% if the ROE is more than 10% and less than 18%;

	•		varies on a straight-line basis between 80% and 100% if the ROE is more than or equal to 18% and less than 30%; and

	•		is equal to 100% if the ROE is more than or equal to 30%.

Due to the application of the performance condition, the acquisition rate was 60% for the 2008 plan.

As a consequence, 88,532 options were canceled.

B. TOTAL share purchase option plans


													Weighted
													average
	2000 Plan^(a)			2001 Plan^(b)			2002 Plan^(c)			Total			exercise price

Date of the shareholders’ meeting		05/21/1997			05/17/2001			05/17/2001
Grant date ^(d)		07/11/2000			07/10/2001			07/09/2002
Exercise price until May 23, 2006 included ^(e)		40.68			42.05			39.58
Exercise price since May 24, 2006 ^(e)		40.11			41.47			39.03
Expiry date		07/11/2008			07/10/2009			07/09/2010

Number of options ^(f)
Outstanding as of January 1, 2008		3,142,188			5,150,258			7,063,183			15,355,629			40.07
Awarded		—			—			—			—			—
Canceled		(480,475	)		(3,652	)		(13,392	)		(497,519	)		40.09
Exercised		(2,661,713	)		(455,180	)		(598,934	)		(3,715,827	)		40.10
Outstanding as of January 1, 2009		—			4,691,426			6,450,857			11,142,283			40.06
Awarded					—			—			—			—
Canceled					(4,650,446	)		(7,920	)		(4,658,366	)		41.47
Exercised					(40,980	)		(507,676	)		(548,656	)		39.21
Outstanding as of January 1, 2010					—			5,935,261			5,935,261			39.03
Awarded								—			—			—
Canceled ^(g)								(4,671,989	)		(4,671,989	)		39.03
Exercised								(1,263,272	)		(1,263,272	)		39.03
Outstanding as of December 31, 2010								—			—			—


(a)		Options were exercisable, subject to a continued employment condition, after a 4-year vesting period from the date of the Board meeting awarding the options and expired eight years after this date. The underlying shares may not be transferred during the 5-year period from the date of the grant. This plan expired on July 11, 2008.

(b)		Options were exercisable, subject to a continued employment condition, after a 3.5-year vesting period from the date of the Board meeting awarding the options and expired eight years after this date. The underlying shares may not be transferred during the 4-year period from the date of the grant. This plan expired on July 10, 2009.

(c)		Options were exercisable, subject to a continued employment condition, after a 2-year vesting period from the date of the Board meeting awarding the options and expired eight years after this date. The underlying shares may not be transferred during the 4-year period from the date of the grant. This plan expired on July 9, 2010.

(d)		The grant date is the date of the Board meeting awarding the options.

(e)		Exercise price in euro. The exercise prices of TOTAL share purchase options of the plans at that date were multiplied by 0.25 to take into account the four-for-one stock split on May 18, 2006. Moreover, following the spin-off of Arkema, the exercise prices of TOTAL share purchase options of these plans were multiplied by an adjustment factor equal to 0.986147 effective as of May 24, 2006.

(f)		The number of options awarded, outstanding, canceled or exercised before May 23, 2006 included, was multiplied by four to take into account the four-for-one stock split approved by the shareholders’ meeting on May 12, 2006.

(g)		Out of the 4,671,989 options canceled in 2010, 4,671,145 options that were not exercised expired due to the expiry of the 2002 purchase option Plan on July 9, 2010.

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C. Exchange guarantee granted to the holders of Elf Aquitaine share subscription options

Pursuant to the public exchange offer for Elf Aquitaine shares which was made in 1999, the Group made a commitment to guarantee the holders of Elf Aquitaine share subscription options, at the end of the period referred to in Article 163 bis C of the French Tax Code (CGI), and until the end of the period for the exercise of the options, the possibility to exchange their future Elf Aquitaine shares for TOTAL shares, on the basis of the exchange ratio of the offer (nineteen TOTAL shares for thirteen Elf Aquitaine shares).

In order to take into account the spin-off of S.D.A. (Société de Développement Arkema) by Elf Aquitaine, the spin-off of Arkema by TOTAL S.A. and the four-for-one TOTAL stock split, the Board of Directors of TOTAL S.A., in accordance with the terms of the share exchange undertaking, approved on March 14, 2006 to adjust the exchange ratio described above (see pages 24 and 25 of the “Prospectus for the purpose of listing Arkema shares on Euronext Paris in connection with the allocation of Arkema shares to TOTAL S.A. shareholders”). Following the approval by Elf Aquitaine shareholders’ meeting on May 10, 2006 of the spin-off of S.D.A. by Elf Aquitaine, the approval by TOTAL S.A. shareholders’ meeting on May 12, 2006 of the spin-off of Arkema by TOTAL S.A. and the four-for-one TOTAL stock split, the exchange ratio was adjusted to six TOTAL shares for one Elf Aquitaine share on May 22, 2006.

This exchange guarantee expired on September 12, 2009, due to the expiry of the Elf Aquitaine share subscription option plan No. 2 of 1999. Subsequently, no Elf Aquitaine shares are covered by the exchange guarantee.

D. TOTAL restricted share grants


	2005 Plan			2006 Plan			2007 Plan			2008 Plan			2009 Plan			2010 Plan			Total

Date of the shareholders’ meeting		05/17/2005			05/17/2005			05/17/2005			05/16/2008			05/16/2008			05/16/2008
Grant date^(a)		07/19/2005			07/18/2006			07/17/2007			10/09/2008			09/15/2009			09/14/2010
Final grant date (end of the vesting period)		07/20/2007			07/19/2008			07/18/2009			10/10/2010			09/16/2011			09/15/2012
Transfer possible from		07/20/2009			07/19/2010			07/18/2011			10/10/2012			09/16/2013			09/15/2014

Number of restricted shares
Outstanding as of January 1, 2008		—			2,263,956			2,363,057												4,627,013
Awarded		—			—			—			2,791,968									2,791,968
Canceled		2,840			(43,822	)		(29,504	)		(19,220	)								(89,706	)
Finally granted^(b)(c)		(2,840	)		(2,220,134	)		(336	)		—									(2,223,310	)
Outstanding as of January 1, 2009		—			—			2,333,217			2,772,748									5,105,965
Awarded		—			—			—			—			2,972,018						2,972,018
Canceled		1,928			2,922			(12,418	)		(9,672	)		(5,982	)					(23,222	)
Finally granted^(b)(c)		(1,928	)		(2,922	)		(2,320,799	)		(600	)		—						(2,326,249	)
Outstanding as of January 1, 2010		—			—			—			2,762,476			2,966,036						5,728,512
Awarded		—			—			—			—			—			3,010,011			3,010,011
Canceled^(d)		1,024			3,034			552			(1,113,462	)		(9,796	)		(8,738	)		(1,127,386	)
Finally granted^(b)(c)		(1,024	)		(3,034	)		(552	)		(1,649,014	)		(1,904	)		(636	)		(1,656,164	)
Outstanding as of December 31, 2010		—			—			—			—			2,954,336			3,000,637			5,954,973


(a)		The grant date is the date of the Board of Directors meeting that awarded the shares, except for the shares awarded by the Board of Directors at their meeting of September 9, 2008, and granted on October 9, 2008.

(b)		Restricted shares finally granted following the death of their beneficiaries (2007 Plan for fiscal year 2008, 2008 Plan for fiscal year 2009, 2009 Plan for fiscal year 2010).

(c)		Including restricted shares finally granted for which the entitlement right had been canceled erroneously.

(d)		Out of the 1,113,462 canceled rights to the grant share under the 2008 Plan, 1,094,914 entitlement rights were canceled due to the performance condition. The acquisition rate for the 2008 Plan was 60%.

The restricted shares, which are bought back by the Company on the market, are finally granted to their beneficiaries after a 2-year vesting period from the date of the grant. The final grant is subject to a continued employment condition and a performance condition. Moreover, the transfer of the restricted shares finally granted will not be permitted until the end of a 2-year mandatory holding period from the date of the final grant.

The continued employment condition states that the termination of the employment contract during the vesting period will also terminate the grantee’s right to a restricted share grant.

For the 2010 Plan, the Board of Directors decided that, for each beneficiary of more than 100 shares, half of the shares in excess of this number will be finally granted subject to a performance condition. This condition is based on the average ROE calculated by the Group based on TOTAL’s consolidated balance sheet and statement of income for fiscal years 2010 and 2011. The acquisition rate:

•

is equal to zero if the average ROE is less than or equal to 7%;

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	•		varies on a straight-line basis between 0% and 100% if the average ROE is greater than 7% and less than 18%; and

	•		is equal to 100% if the average ROE is greater than or equal to 18%.

For the 2009 Plan, the Board of Directors decided that, for each beneficiary of more than 100 shares, half of the shares in excess of this number will be finally granted subject to a performance condition. This condition states that the number of shares finally granted is based on the average ROE as published by the Group and calculated based on the Group’s consolidated balance sheet and statement of income for fiscal years 2009 and 2010. The acquisition rate:

	•		is equal to zero if the average ROE is less than or equal to 7%;

	•		varies on a straight-line basis between 0% and 100% if the average ROE is greater than 7% and less than 18%; and

	•		is equal to 100% if the average ROE is greater than or equal to 18%.

For the 2008 Plan, the Board of Directors decided that, for each beneficiary, the shares will be finally granted subject to a performance condition. This performance condition states that the number of restricted shares finally granted is based on the ROE of the Group. The ROE is calculated based on the consolidated accounts published by TOTAL for the fiscal year preceding the final grant. This acquisition rate:

	•		is equal to zero if the ROE is less than or equal to 10%;

	•		varies on a straight-line basis between 0% and 80% if the ROE is greater than 10% and less than 18%;

	•		varies on a straight-line basis between 80% and 100% if the ROE is greater than or equal to 18% and less than 30%; and

	•		is equal to 100% if the ROE is greater than or equal to 30%.

Due to the application of the performance condition, the acquisition rate was 60% for the 2008 Plan.

As a consequence, entitlement rights to 1,094,914 shares were canceled.

E. Global free TOTAL share plan

The Board of Directors approved at its meeting on May 21, 2010 the implementation and conditions of a global free share plan intended for the Group employees, that is more than 100,000 employees in 124 countries. On June 30, 2010, entitlement rights to 25 free shares were granted to every employee. The final grant is subject to a continued employment condition during the plan’s vesting period. The shares are not subject to any performance condition. 1,508,850 shares were awarded to employees from countries with a 2+2 scheme (2-year vesting period followed by 2-year of mandatory holding period) and 1,070,650 shares were awarded to employees in countries with a 4+0 scheme (4-year vesting period and no mandatory holding period), representing a total of 2,579,500 shares. Following the vesting period, the shares awarded will be new shares.

2010 Plan

(2+2)

(4+0)

Total

Date of the shareholders’ meeting

05/16/2008

Grant date^(a)

06/30/2010

Final grant date (end of the vesting period)

07/01/2012

07/01/2014

Transfer possible from

07/01/2014

Number of free shares

Outstanding as of January 1, 2008

Awarded

Canceled

Finally granted

Outstanding as of January 1, 2009

Awarded

Canceled

Finally granted

Outstanding as of January 1, 2010

Awarded

1,508,850

1,070,650

2,579,500

Canceled

(125

)

(75

)

(200

)

Finally granted ^(b)

(75

)

—

(75

)

Outstanding as of December 31, 2010

1,508,650

1,070,575

2,579,225


(a)		The June 30, 2010, grant was decided by the Board of Directors on May 21, 2010.

(b)		Final grant following the death or disability of the beneficiary of the shares.

Page 69

F. Share-based payment expense

Share-based payment expense before tax for the year 2010 amounts to €140 million and can be broken down as follows:

	•		€31 million for TOTAL share subscription plans; and

	•		€109 million for TOTAL restricted shares plans.

Share-based payment expense before tax for the year 2009 amounts to €106 million and can be broken down as follows:

	•		€38 million for TOTAL share subscription plans; and

	•		€68 million for TOTAL restricted shares plans.

Share-based payment expense before tax for the year 2008 amounted to €154 million and can be broken down as follows:

	•		€61 million for TOTAL share subscription plans;

	•		€105 million for TOTAL restricted shares plans; and

	•		€(12) million for the adjustment to the expense booked in 2007 related to TOTAL capital increase reserved for employees (see Note 17 to the Consolidated Financial Statements).

The fair value of the options granted in 2010, 2009 and 2008 has been measured according to the Black-Scholes method and based on the following assumptions:


For the year ended December 31,	2010		2009		2008

Risk free interest rate (%) ^(a)		2.1		2.9		4.3
Expected dividends (%) ^(b)		5.9		4.8		8.4
Expected volatility (%) ^(c)		25.0		31.0		32.7
Vesting period (years)		2		2		2
Exercise period (years)		8		8		8
Fair value of the granted options (€ per option)		5.8		8.4		5.0


(a)		Zero coupon Euro swap rate at 6 years.

(b)		The expected dividends are based on the price of TOTAL share derivatives traded on the markets.

(c)		The expected volatility is based on the implied volatility of TOTAL share options and of share indices options traded on the markets.

Pursuant to this delegation of authorization, the Board of Directors, during its October 28, 2010 meeting, implemented a capital increase reserved for employees within the limit of 12 million shares, with dividend rights as of the January 1, 2010 and delegated all power to the Chairman and CEO to determine the opening and closing of subscription period and the subscription price.

Page 70

26) Payroll and staff


For the year ended December 31,	2010		2009		2008

Personnel expenses (M€)
Wages and salaries (including social charges)		6,246		6,177		6,014

Group employees
France
• Management		10,852		10,906		10,688
• Other		24,317		25,501		26,413
International
• Management		15,146		15,243		14,709
• Other		42,540		44,737		45,149

Total		92,855		96,387		96,959

The number of employees includes only employees of fully consolidated subsidiaries.

The decrease in the number of employees between December 31, 2009 and December 31, 2010 is mainly explained by the sale of the consumer specialty chemicals business Mapa Spontex (see Note 3 to the Consolidated Financial Statements).

27) Statement of cash flows

A) Cash flow from operating activities

The following table gives additional information on cash paid or received in the cash flow from operating activities:


For the year ended December 31,
(M€)	2010			2009			2008

Interests paid		(470	)		(678	)		(958	)
Interests received		132			148			505
Income tax paid		(6,990	)		(6,202	)		(10,631	)
Dividends received		1,722			1,456			1,590

Changes in working capital are detailed as follows:


For the year ended December 31,
(M€)	2010			2009			2008

Inventories		(1,896	)		(4,217	)		4,020
Accounts receivable		(2,712	)		(344	)		3,222
Other current assets		911			1,505			(982	)
Accounts payable		2,482			571			(3,056	)
Other creditors and accrued liabilities		719			(831	)		(633	)

Net amount		(496	)		(3,316	)		2,571

B) Cash flow used in financing activities

Changes in non-current financial debt are detailed in the following table under a net value due to the high number of multiple drawings:


For the year ended December 31,
(M€)	2010			2009			2008

Issuance of non-current debt		3,995			6,309			5,513
Repayment of non-current debt		(206	)		(787	)		(2,504	)

Net amount		3,789			5,522			3,009

Page 71

C) Cash and cash equivalents

Cash and cash equivalents are detailed as follows:

For the year ended December 31,

(M€)

2010

2009

2008

Cash

4,679

2,448

1,836

Cash equivalents

9,810

9,214

10,485

Total

14,489

11,662

12,321

Cash equivalents are mainly composed of deposits less than three months deposited in government institutions or deposit banks selected in accordance with strict criteria.

28) Financial assets and liabilities analysis per instruments class and strategy

The financial assets and liabilities disclosed on the face of the balance sheet are detailed as follows:

Other financial

Fair

Financial instruments related to financing and trading activities

instruments

Total

value

Amortized

Fair

cost

value

As of December 31, 2010

(M€)

Available

Held for

Financial debt

Hedging of

Net investment

Assets / (Liabilities)

for sale ^(a)

trading

^(b)

financial debt

Cash flow hedge

hedge and other

Equity affiliates: loans

2,383

2,383

Other investments

4,590

4,590

Hedging instruments of non-current financial debt

1,814

1,870

Other non-current assets

1,596

1,596

Accounts receivable, net

18,159

18,159

Other operating receivables

499

3,908

4,407

Current financial assets

869

292

1,205

Cash and cash equivalents

14,489

14,489

Total financial assets

4,848

4,590

537

—

2,106

36,556

48,699

Total non-financial

95,019

assets

Total assets

143,718

Non-current financial

(3,186

)

(17,419

)

(178

)

(20,783

)

(21,172

)

debt

Accounts payable

(18,450

)

(18,450

)

(18,450

)

Other operating

(559

)

(3,015

)

(3,574

)

(3,574

)

liabilities

Current borrowings

(5,916

)

(3,737

)

(9,653

)

(9,653

)

Other current financial liabilities

(147

)

(12

)

—

(159

)

(159

)

Total financial

(9,102

)

(706

)

(21,156

)

(190

)

—

(21,465

)

(52,619

)

(53,008

)

liabilities

Total non-financial liabilities

(91,099

)

Total liabilities

(143,718

)


(a)		Financial assets available for sale are measured at their fair value except for unlisted securities (see Note 1 paragraph M(ii) and Note 13 to the Consolidated Financial Statements).

(b)		The financial debt is adjusted to the hedged risks value (currency and interest rate) as part of hedge accounting (see Note 1 paragraph M(iii) to the Consolidated Financial Statements).

Page 72

Other financial

Fair

Financial instruments related to financing and trading activities

instruments

Total

value

Amortized

Fair

cost

value

As of December 31, 2009

Available

(M€)

for sale

Held for

Financial debt

Hedging of

Net investment

Assets / (Liabilities)

^(a)

trading

^(b)

financial debt

Cash flow hedge

hedge and other

Equity affiliates: loans

2,367

2,367

Other investments

1,162

1,162

Hedging instruments of non-current financial debt

889

136

1,025

Other non-current assets

1,284

1,284

Accounts receivable, net

15,719

15,719

Other operating receivables

1,029

4,116

5,145

Current financial assets

197

311

Cash and cash equivalents

11,662

11,662

Total financial assets

3,706

1,162

1,082

—

1,086

136

31,497

38,675

Total non-financial assets

89,078

Total assets

127,753

Non-current financial debt

(2,089

)

(17,107

)

(241

)

(19,437

)

(19,905

)

Accounts payable

(15,383

)

(15,383

)

(15,383

)

Other operating liabilities

(923

)

(3,783

)

(4,706

)

(4,706

)

Current borrowings

(4,849

)

(2,145

)

(6,994

)

(6,994

)

Other current financial liabilities

(25

)

(97

)

(123

)

(123

)

Total financial liabilities

(6,938

)

(948

)

(19,252

)

(338

)

—

)

(19,166

)

(46,643

)

(47,111

)

Total non-financial liabilities

(81,110

)

Total liabilities

(127,753

)


(a)		Financial assets available for sale are measured at their fair value except for unlisted securities (see Note 1 paragraph M(ii) and Note 13 to the Consolidated Financial Statements).

(b)		The financial debt is adjusted to the hedged risks value (currency and interest rate) as part of hedge accounting (see Note 1 paragraph M(iii) to the Consolidated Financial Statements).

Other financial

Fair

Financial instruments related to financing and trading activities

instruments

Total

value

Amortized

Fair

cost

value

As of December 31, 2008

Available

(M€)

for sale

Held for

Financial debt

Hedging of

Net investment

Assets / (Liabilities)

^(a)

trading

^(b)

financial debt

Cash flow hedge

hedge and other

Equity affiliates: loans

2,005

2,005

Other investments

1,165

1,165

Hedging instruments of non-current financial debt

892

892

Other non-current assets

1,403

1,403

Accounts receivable, net

—

15,287

15,287

Other operating receivables

1,664

4,544

6,208

Current financial assets

100

—

187

Cash and cash

12,321

12,321

equivalents

Total financial assets

3,409

1,165

1,750

—

992

—

32,152

39,468

Total non-financial assets

78,842

Total assets

118,310

Non-current financial debt

(701

)

(15,050

)

(440

)

(16,191

)

(16,191

)

Accounts payable

—

(14,815

)

(14,815

)

(14,815

)

Other operating liabilities

(1,033

)

(3,264

)

(4,297

)

(4,297

)

Current borrowings

(5,721

)

(2,001

)

(7,722

)

(7,722

)

Other current financial liabilities

(146

)

(12

)

(158

)

(158

)

Total financial liabilities

(6,422

)

(1,179

)

(17,051

)

(452

)

—

(18,079

)

(43,183

)

(43,183

)

Total non-financial liabilities

(75,127

)

Total liabilities

(118,310

)


(a)		Financial assets available for sale are measured at their fair value except for unlisted securities (see Note 1 paragraph M(ii) and Note 13 to the Consolidated Financial Statements).

(b)		The financial debt is adjusted to the hedged risks value (currency and interest rate) as part of hedge accounting (see Note 1 paragraph M(iii) to the Consolidated Financial Statements).

Page 73

29) Fair value of financial instruments (excluding commodity contracts)

A) Impact on the statement of income per nature of financial instruments

Operating assets and liabilities

The impact on the statement of income is detailed as follows:


For the year ended December 31,
(M€)	2010			2009			2008

Assets available for sale (investments):
- dividend income on non-consolidated subsidiaries		255			210			238
- gains (losses) on disposal of assets		60			6			15
- other		(17	)		(18	)		(15	)
Loans and receivables		90			41			100

Impact on net operating income		388			239			338

The impact in the statement of income mainly includes:

	•		Dividends and gains or losses on disposal of other investments classified as “Other investments”;

	•		Financial gains and depreciation on loans related to equity affiliates, non-consolidated companies and on receivables reported in “Loans and receivables”.

Assets and liabilities from financing activities

The impact on the statement of income of financing assets and liabilities is detailed as follows:


For the year ended December 31,
(M€)	2010			2009			2008

Loans and receivables		133			158			547
Financing liabilities and associated hedging instruments		(469	)		(563	)		(996	)
Fair value hedge (ineffective portion)		4			33			(4	)
Assets and liabilities held for trading		(2	)		(26	)		(74	)

Impact on the cost of net debt		(334	)		(398	)		(527	)

The impact on the statement of income mainly includes:

	•		Financial income on cash, cash equivalents, and current financial assets (notably current deposits beyond three months) classified as “Loans and receivables”;

	•		Financial expense of long term subsidiaries financing, associated hedging instruments (excluding ineffective portion of the hedge detailed below) and financial expense of short term financing classified as “Financing liabilities and associated hedging instruments”;

	•		Ineffective portion of bond hedging; and

	•		Financial income, financial expense and fair value of derivative instruments used for cash management purposes classified as “Assets and liabilities held for trading”.

Financial derivative instruments used for cash management purposes (interest rate and foreign exchange) are considered to be held for trading. Based on practical documentation issues, the Group did not elect to set up hedge accounting for such instruments. The impact on income of the derivatives is offset by the impact of loans and current liabilities they are related to. Therefore these transactions taken as a whole do not have a significant impact on the Consolidated Financial Statements.

Page 74

B) Impact of the hedging strategies

Fair value hedge

The impact on the statement of income of the bond hedging instruments which is recorded in the item “Financial interest on debt” in the Consolidated Statement of Income is detailed as follows:


For the year ended December 31,
(M€)	2010			2009			2008

Revaluation at market value of bonds		(1,164	)		(183	)		(66	)
Swap hedging of bonds		1,168			216			62

Ineffective portion of the fair value hedge		4			33			(4	)

The ineffective portion is not representative of the Group’s performance considering the Group’s objective to hold swaps to maturity. The current portion of the swaps valuation is not subject to active management.

Net investment hedge

These instruments are recorded directly in shareholders’ equity under “Currency translation adjustments”. The variations of the period are detailed in the table below:


For the year ended December 31,	As of							As of
(M€)	January 1,		Variations			Disposals		December 31,

2010		25		(268	)		—		(243	)
2009		124		(99	)		—		25
2008		29		95			—		124

As of December 31, 2010, the fair value of the open instruments amounts to €6 million compared to €5 million in 2009 and zero in 2008.

Cash flow hedge

The impact on the statement of income and on equity of the bond hedging instruments qualified as cash flow hedges is detailed as follows:


For the year ended December 31,
(M€)	2010			2009		2008

Profit (Loss) recorded in equity during the period		(80	)		128		—
Recycled amount from equity to the income statement during the period		(115	)		221		—

As of December 31, 2010 and 2009, the ineffective portion of these financial instruments is equal to zero.

Page 75

C) Maturity of derivative instruments

The maturity of the notional amounts of derivative instruments, excluding the commodity contracts, is detailed in the following table:


				Notional value^(a)
As of December 31, 2010
(M€)	Fair															2016
Assets / (Liabilities)	value			Total		2011		2012		2013		2014		2015		and after

Fair value hedge

Swaps hedging fixed-rates bonds (liabilities)		(178	)		2,244
Swaps hedging fixed-rates bonds (assets)		1,814			13,939

Total swaps hedging fixed-rates bonds (assets and liabilities)		1,636			16,183				2,967		3,461		2,421		3,328		4,006

Swaps hedging fixed-rates bonds (current portion) (liabilities)		(12	)		592
Swaps hedging fixed-rates bonds (current portion) (assets)		292			2,815

Total swaps hedging fixed-rates bonds (current portion) (assets and liabilities)		280			3,407		3,407

Cash flow hedge

Swaps hedging fixed-rates bonds (liabilities)		—			—
Swaps hedging fixed-rates bonds (assets)		56			1,957

Total swaps hedging fixed-rates bonds (assets and liabilities)		56			1,957				295								1,662

Swaps hedging fixed-rates bonds (current portion) (liabilities)
Swaps hedging fixed-rates bonds (current portion) (assets)

Total swaps hedging fixed-rates bonds (current portion) (assets and liabilities)		—			—		—

Net investment hedge

Currency swaps and forward exchange contracts (assets)		6			381
Currency swaps and forward exchange contracts (liabilities)		—			—

Total swaps hedging net investments		6			381		381

Held for trading

Other interest rate swaps (assets)		1			6,463
Other interest rate swaps (liabilities)		(3	)		11,395

Total other interest rate swaps (assets and liabilities)		(2	)		17,858		17,667		189		—		—		2		—

Currency swaps and forward exchange contracts (assets)		37			1,532
Currency swaps and forward exchange contracts (liabilities)		(144	)		6,757

Total currency swaps and forward exchange contracts (assets and liabilities)		(107	)		8,289		8,102		—		25		49		31		82


(a)		These amounts set the levels of notional commitment and are not indicative of a contingent gain or loss.

Page 76

Notional value^(a)

As of December 31, 2009

(M€)

Fair

2015

Assets / (Liabilities)

value

Total

2010

2011

2012

2013

2014

and after

Fair value hedge

Swaps hedging fixed-rates bonds (liabilities)

(241

)

4,615

Swaps hedging fixed-rates bonds (assets)

889

11,076

Total swaps hedging fixed-rates bonds (assets and liabilities)

648

15,691

—

3,345

2,914

3,450

1,884

4,098

Swaps hedging fixed-rates bonds (current portion) (liabilities)

(97

)

912

Swaps hedging fixed-rates bonds (current portion) (assets)

197

1,084

Total swaps hedging fixed-rates bonds (current portion) (assets and liabilities)

100

1,996

Cash flow hedge

Swaps hedging fixed-rates bonds (liabilities)

Swaps hedging fixed-rates bonds (assets)

136

1,837

295

1,542

Total swaps hedging fixed-rates bonds (assets and liabilities)

136

1,837

295

1,542

Swaps hedging fixed-rates bonds (current portion) (liabilities)

Swaps hedging fixed-rates bonds (current portion) (assets)

Total swaps hedging fixed-rates bonds (current portion) (assets and liabilities)

Net investment hedge

Currency swaps and forward exchange contracts (assets)

701

Currency swaps and forward exchange contracts (liabilities)

)

224

Total swaps hedging net investments

925

Held for trading

Other interest rate swaps (assets)

1,459

Other interest rate swaps (liabilities)

)

10,865

Total other interest rate swaps (assets and liabilities)

)

12,324

12,208

114

Currency swaps and forward exchange contracts (assets)

4,017

Currency swaps and forward exchange contracts (liabilities)

(24

)

3,456

Total currency swaps and forward exchange contracts (assets and liabilities)

7,473

7,224

100


(a)		These amounts set the levels of notional commitment and are not indicative of a contingent gain or loss.

Page 77

As of December 31, 2008

Notional value^(a)

(M€)

Fair

2014

Assets / (Liabilities)

value

Total

2009

2010

2011

2012

2013

and after

Fair value hedge

Swaps hedging fixed-rates bonds (liabilities)

(440

)

9,309

Swaps hedging fixed-rates bonds (assets)

892

4,195

Total swaps hedging fixed-rates bonds (assets and liabilities)

452

13,504

—

2,048

3,373

3,233

3,032

1,818

Swaps hedging fixed-rates bonds (current portion) (liabilities)

(12

)

Swaps hedging fixed-rates bonds (current portion) (assets)

100

1,871

Total swaps hedging fixed-rates bonds (current portion) (assets and liabilities)

1,963

Net investment hedge

Currency swaps and forward exchange contracts (liabilities)

—

1,347

Held for trading

Other interest rate swaps (assets)

—

2,853

Other interest rate swaps (liabilities)

)

5,712

Total other interest rate swaps (assets and liabilities)

)

8,565

8,559

Currency swaps and forward exchange contracts (assets)

5,458

Currency swaps and forward exchange contracts (liabilities)

(142

)

2,167

Total currency swaps and forward exchange contracts (assets and liabilities)

(56

)

7,625

6,595

483

114

290


(a)		These amounts set the levels of notional commitment and are not indicative of a contingent gain or loss.

D) Fair value hierarchy

The fair value hierarchy for financial instruments excluding commodity contracts is as follows:


	Quoted prices in
	active markets					Prices based on
	for identical		Prices based on			non observable
As of December 31, 2010	assets		observable data			data
(M€)	(level 1)		(level 2)			(level 3)		Total

Fair value hedge instruments		—		1,916			—		1,916
Cash flow hedge instruments		—		56			—		56
Net investment hedge instruments		—		6			—		6
Assets and liablities held for trading		—		(109	)		—		(109	)
Assets available for sale		3,631		—			—		3,631

Total		3,631		1,869			—		5,500


	Quoted prices in
	active markets				Prices based on
	for identical		Prices based on		non observable
As of December 31, 2009	assets		observable data		data
(M€)	(level 1)		(level 2)		(level 3)		Total

Fair value hedge instruments		—		748		—		748
Cash flow hedge instruments		—		136		—		136
Net investment hedge instruments		—		5		—		5
Assets and liablities held for trading		—		28		—		28
Assets available for sale		232		—		—		232

Total		232		917		—		1,149

The description of each fair value level is presented in Note 1 paragraph M(v) to the Consolidated Financial Statements.

Page 78

30) Financial instruments related to commodity contracts

Financial instruments related to oil, gas and power activities as well as related currency derivatives are recorded at fair value under “Other current assets” or “Other creditors and accrued liabilities” depending on whether they are assets or liabilities.


As of December 31, 2010
(M€)
Assets / (Liabilities)	Carrying amount			Fair value^(b)

Crude oil, petroleum products and freight rates activities
Petroleum products and crude oil swaps		(2	)		(2	)
Freight rate swaps		—			—
Forwards ^(a)		5			5
Options		51			51
Futures		(12	)		(12	)
Options on futures		(4	)		(4	)

Total crude oil, petroleum products and freight rates		38			38

Gas & Power activities
Swaps		(1	)		(1	)
Forwards ^(a)		(102	)		(102	)
Options		5			5
Futures		—			—

Total Gas & Power		(98	)		(98	)

Total		(60	)		(60	)

Total of fair value non recognized in the balance sheet					—


(a)		Forwards: contracts resulting in physical delivery are accounted for as derivative commodity contracts and included in the amounts shown.

(b)		When the fair value of derivatives listed on an organized exchange market (futures, options on futures and swaps) is offset with the margin call received or paid on the face of the balance sheet, this fair value is set to zero.


As of December 31, 2009
(M€)
Assets / (Liabilities)	Carrying amount			Fair value^(b)

Crude oil, petroleum products and freight rates activities
Petroleum products and crude oil swaps		(29	)		(29	)
Freight rate swaps		—			—
Forwards ^(a)		(9	)		(9	)
Options		21			21
Futures		(17	)		(17	)
Options on futures		6			6

Total crude oil, petroleum products and freight rates		(28	)		(28	)

Gas & Power activities
Swaps		52			52
Forwards ^(a)		78			78
Options		4			4
Futures		—			—

Total Gas & Power		134			134

Total		106			106

Total of fair value non recognized in the balance sheet					—


(a)		Forwards: contracts resulting in physical delivery are accounted for as derivative commodity contracts and included in the amounts shown.

(b)		When the fair value of derivatives listed on an organized exchange market (futures, options on futures and swaps) is offset with the margin call received or paid on the face of the balance sheet, this fair value is set to zero.

Page 79


As of December 31, 2008
(M€)
Assets / (Liabilities)	Carrying amount			Fair value^(b)

Crude oil, petroleum products and freight rates activities
Petroleum products and crude oil swaps		141			141
Freight rate swaps		8			8
Forwards ^(a)		(120	)		(120	)
Options		—			—
Futures		17			17
Options on futures		(7	)		(7	)

Total crude oil, petroleum products and freight rates		39			39

Gas & Power activities
Swaps		(48	)		(48	)
Forwards ^(a)		659			659
Options		—			—
Futures		(19	)		(19	)

Total Gas & Power		592			592

Total		631			631

Total of fair value non recognized in the balance sheet					—


(a)		Forwards: contracts resulting in physical delivery are accounted for as derivative commodity contracts and included in the amounts shown.

(b)		When the fair value of derivatives listed on an organized exchange market (futures, options on futures and swaps) is offset with the margin call received or paid on the face of the balance sheet, this fair value is set to zero.

Most commitments on crude oil and refined products have a short term maturity (less than one year). The maturity of most Gas & Power energy derivatives is less than three years forward.

The changes in fair value of financial instruments related to commodity contracts are detailed as follows:


For the year ended December 31,	Fair value			Impact on		Settled						Fair value
(M€)	as of January 1,			income		contracts			Other			as of December 31,

Crude oil, petroleum products and freight rates activities

2010		(28	)		1,556		(1,488	)		(2	)		38
2009		39			1,713		(1,779	)		(1	)		(28	)
2008		18			1,734		(1,715	)		2			39


Gas & Power activities

2010		134			410		(648	)		6			(98	)
2009		592			327		(824	)		39			134
2008		232			787		(310	)		(117	)		592

The fair value hierarchy for financial instruments related to commodity contracts is as follows:


	Quoted prices
	in active markets			Prices based on			Prices based on non
As of December 31, 2010	for identical			observable data			observable
(M€)	assets (level 1)			(level 2)			data (level 3)		Total

Crude oil, petroleum products and freight rates activities		(10	)		48			—		38
Gas & Power activities		50			(148	)		—		(98	)

Total		40			(100	)		—		(60	)


	Quoted prices
	in active markets			Prices based on			Prices based on non
As of December 31, 2009	for identical			observable data			observable
(M€)	assets (level 1)			(level 2)			data (level 3)		Total

Crude oil, petroleum products and freight rates activities		(45	)		17			—		(28	)
Gas & Power activities		140			(6	)		—		134

Total		95			11			—		106

The description of each fair value level is presented in Note 1 paragraph M(v) to the Consolidated Financial Statements.

Page 80

31) Market risks

Oil and gas market related risks

Due to the nature of its business, the Group has significant oil and gas trading activities as part of its day-to-day operations in order to optimize revenues from its oil and gas production and to obtain favorable pricing to supply its refineries.

In its international oil trading business, the Group follows a policy of not selling its future production. However, in connection with this trading business, the Group, like most other oil companies, uses energy derivative instruments to adjust its exposure to price fluctuations of crude oil, refined products, natural gas, power and coal. The Group also uses freight rate derivative contracts in its shipping business to adjust its exposure to freight-rate fluctuations. To hedge against this risk, the Group uses various instruments such as futures, forwards, swaps and options on organised markets or over-the-counter markets. The list of the different derivatives held by the Group in these markets is detailed in Note 30 to the Consolidated Financial Statements.

The Trading & Shipping division measures its market risk exposure, i.e. potential loss in fair values, on its crude oil, refined products and freight rates trading activities using a value-at-risk technique. This technique is based on an historical model and makes an assessment of the market risk arising from possible future changes in market values over a 24-hour period. The calculation of the range of potential changes in fair values takes into account a snapshot of the end-of-day exposures and the set of historical price movements for the last 400 business days for all instruments and maturities in the global trading activities. Options are systematically reevaluated using appropriate models.

The potential movement in fair values corresponds to a 97.5% value-at-risk type confidence level. This means that the Group’s portfolio result is likely to exceed the value-at-risk loss measure once over 40 business days if the portfolio exposures were left unchanged.

Trading & Shipping : value-at-risk with a 97.5% probability


As of December 31,
(M€)	High		Low		Average		Year end

2010		23.1		3.4		8.9		3.8
2009		18.8		5.8		10.2		7.6
2008		13.5		2.8		6.9		11.8

As part of its gas, power and coal trading activity, the Group also uses derivative instruments such as futures, forwards, swaps and options in both organised and over-the-counter markets. In general, the transactions are settled at maturity date through physical delivery. The Gas & Power division measures its market risk exposure, i.e. potential loss in fair values, on its trading business using a value-at-risk technique. This technique is based on an historical model and makes an assessment of the market risk arising from possible future changes in market values over a one-day period. The calculation of the range of potential changes in fair values takes into account a snapshot of the end-of-day exposures and the set of historical price movements for the past two years for all instruments and maturities in the global trading business.

Gas & Power trading : value-at-risk with a 97.5% probability


As of December 31,
(M€)	High		Low		Average		Year end

2010		13.9		2.7		6.8		10.0
2009		9.8		1.9		5.0		4.8
2008		16.3		1.3		5.0		1.4

The Group has implemented strict policies and procedures to manage and monitor these market risks. These are based on the splitting of supervisory functions from operational functions and on an integrated information system that enables real-time monitoring of trading activities.

Limits on trading positions are approved by the Group’s Executive Committee and are monitored daily. To increase flexibility and encourage liquidity, hedging operations are performed with numerous independent operators, including other oil companies, major energy producers or consumers and financial institutions. The Group has established counterparty limits and monitors outstanding amounts with each counterparty on an ongoing basis.

Page 81

Financial markets related risks

As part of its financing and cash management activities, the Group uses derivative instruments to manage its exposure to changes in interest rates and foreign exchange rates. These instruments are principally interest rate and currency swaps. The Group may also use, on a less frequent basis, futures and options contracts. These operations and their accounting treatment are detailed in Notes 1 paragraph M, 20, 28 and 29 to the Consolidated Financial Statements.

Risks relative to cash management operations and to interest rate and foreign exchange financial instruments are managed according to rules set by the Group’s senior management, which provide for regular pooling of available cash balances, open positions and management of the financial instruments by the Treasury Department. Excess cash of the Group is deposited mainly in government institutions or deposit banks through deposits, reverse repurchase agreements and purchase of commercial paper. Liquidity positions and the management of financial instruments are centralized by the Treasury Department, where they are managed by a team specialized in foreign exchange and interest rate market transactions.

The Cash Monitoring-Management Unit within the Treasury Department monitors limits and positions per bank on a daily basis and reports results. This unit also prepares marked-to-market valuations and, when necessary, performs sensitivity analysis.

Counterparty risk

The Group has established standards for market transactions under which bank counterparties must be approved in advance, based on an assessment of the counterparty’s financial soundness (multi-criteria analysis including a review of market prices and of the Credit Default Swap (CDS), its ratings with Standard & Poor’s and Moody’s, which must be of high quality, and its overall financial condition).

An overall authorized credit limit is set for each bank and is allotted among the subsidiaries and the Group’s central treasury entities according to their needs.

To reduce the market values risk on its commitments, in particular for swaps set as part of bonds issuance, the Treasury Department also developed a system of margin call that is gradually implemented with significant counterparties.

Currency exposure

The Group seeks to minimize the currency exposure of each entity to its functional currency (primarily the euro, the dollar, the pound sterling and the Norwegian krone).

For currency exposure generated by commercial activity, the hedging of revenues and costs in foreign currencies is typically performed using currency operations on the spot market and, in some cases, on the forward market. The Group rarely hedges future cash flows, although it may use options to do so.

With respect to currency exposure linked to non-current assets booked in a currency other than the euro, the Group has a policy of reducing the related currency exposure by financing these assets in the same currency.

Net short-term currency exposure is periodically monitored against limits set by the Group’s senior management.

The non-current debt described in Note 20 to the Consolidated Financial Statements is generally raised by the corporate treasury entities either directly in dollars or euros, or in other currencies which are then exchanged for dollars or euros through swaps issues to appropriately match general corporate needs. The proceeds from these debt issuances are loaned to affiliates whose accounts are kept in dollars or in euros. Thus, the net sensitivity of these positions to currency exposure is not significant.

The Group’s short-term currency swaps, the notional value of which appears in Note 29 to the Consolidated Financial Statements, are used to attempt to optimize the centralized cash management of the Group. Thus, the sensitivity to currency fluctuations which may be induced is likewise considered negligible.

Short-term interest rate exposure and cash

Cash balances, which are primarily composed of euros and dollars, are managed according to the guidelines established by the Group’s senior management (maintain an adequate level of liquidity, optimize revenue from investments considering existing interest rate yield curves, and minimize the cost of borrowing) over a less than twelve-month horizon and on the basis of a daily interest rate benchmark, primarily through short-term interest rate swaps and short-term currency swaps, without modifying currency exposure.

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Interest rate risk on non-current debt

The Group’s policy consists of incurring non-current debt primarily at a floating rate, or, if the opportunity arises at the time of an issuance, at a fixed rate. Debt is incurred in dollars or in euros according to general corporate needs. Long-term interest rate and currency swaps may be used to hedge bonds at their issuance in order to create a variable or fixed rate synthetic debt. In order to partially modify the interest rate structure of the long-term debt, TOTAL may also enter into long-term interest rate swaps.

Sensitivity analysis on interest rate and foreign exchange risk

The tables below present the potential impact of an increase or decrease of 10 basis points on the interest rate yield curves for each of the currencies on the fair value of the current financial instruments as of December 31, 2010, 2009 and 2008.


							Change in fair value due to a change in
							interest rate by
Assets / (Liabilities)	Carrying			Estimated			+ 10 basis			- 10 basis
(M€)	amount			fair value			points			points

As of December 31, 2010

Bonds (non-current portion, before swaps)		(20,019	)		(20,408	)		86			(84	)

Swaps hedging fixed-rates bonds (liabilities)		(178	)		(178	)
Swaps hedging fixed-rates bonds (assets)		1,870			1,870
Total swaps hedging fixed-rates bonds (assets and liabilities)		1,692			1,692			(59	)		59

Current portion of non-current debt after swap (excluding capital lease obligations)		3,483			3,483			4			(4	)
Other interest rates swaps		(2	)		(2	)		3			(3	)

Currency swaps and forward exchange contracts		(101	)		(101	)		—			—


As of December 31, 2009

Bonds (non-current portion, before swaps)		(18,368	)		(18,836	)		75			(75	)

Swaps hedging fixed-rates bonds (liabilities)		(241	)		(241	)
Swaps hedging fixed-rates bonds (assets)		1,025			1,025
Total swaps hedging fixed-rates bonds (assets and liabilities)		784			784			(57	)		57

Current portion of non-current debt after swap (excluding capital lease obligations)		(2,111	)		(2,111	)		3			(3	)
Other interest rates swaps		(1	)		(1	)		1			(1	)

Currency swaps and forward exchange contracts		34			34			—			—


As of December 31, 2008

Bonds (non-current portion, before swaps)		(14,119	)		(14,119	)		47			(43	)

Swaps hedging fixed-rates bonds (liabilities)		(440	)		(440	)
Swaps hedging fixed-rates bonds (assets)		892			892
Total swaps hedging fixed-rates bonds (assets and liabilities)		452			452			(44	)		44

Current portion of non-current debt after swap (excluding capital lease obligations)		(2,025	)		(2,025	)		3			(3	)
Other interest rates swaps		(4	)		(4	)		1			(1	)

Currency swaps and forward exchange contracts		(56	)		(56	)		—			—

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The impact of changes in interest rates on the cost of net debt before tax is as follows:


For the year ended December 31,
(M€)	2010			2009			2008

Cost of net debt		(334	)		(398	)		(527	)

Interest rate translation of :
+ 10 basis points		(11	)		(11	)		(11	)
- 10 basis points		11			11			11
+ 100 basis points		(107	)		(108	)		(113	)
- 100 basis points		107			108			113

As a result of the policy for the management of currency exposure previously described, the Group’s sensitivity to currency exposure is primarily influenced by the net equity of the subsidiaries whose functional currency is the dollar and, to a lesser extent, the pound sterling and the Norwegian krone.

This sensitivity is reflected in the historical evolution of the currency translation adjustment recorded in the statement of changes in shareholders’ equity which, in the course of the last three fiscal years, is essentially related to the fluctuation of dollar and pound sterling and is set forth in the table below:


	Euro / Dollar		Euro / Pound sterling
	exchange rates		exchange rates

As of December 31, 2010		1.34		0.86
As of December 31, 2009		1.44		0.89
As of December 31, 2008		1.39		0.95


As of December 31, 2010									Pound			Other currencies and
(M€)	Total			Euro		Dollar			sterling			equity affiliates^(a)

Shareholders’ equity at historical exchange rate		62,909			32,894		22,242			4,997			2,776
Currency translation adjustment before net investment hedge		(2,501	)		—		(1,237	)		(1,274	)		10
Net investment hedge — open instruments		6			—		6			—			—
Shareholders’ equity at exchange rate as of December 31, 2010		60,414			32,894		21,011			3,723			2,786


As of December 31, 2009									Pound			Other currencies
(M€)	Total			Euro		Dollar			sterling			and equity affiliates

Shareholders’ equity at historical exchange rate		57,621			27,717		18,671			5,201			6,032
Currency translation adjustment before net investment hedge		(5,074	)		—		(3,027	)		(1,465	)		(582	)
Net investment hedge — open instruments		5			—		6			(1	)		—
Shareholders’ equity at exchange rate as of December 31, 2009		52,552			27,717		15,650			3,735			5,450


As of December 31, 2008									Pound			Other currencies
(M€)	Total			Euro		Dollar			sterling			and equity affiliates

Shareholders’ equity at historical exchange rate		53,868			25,084		15,429			5,587			7,768
Currency translation adjustment before net investment hedge		(4,876	)		—		(2,191	)		(1,769	)		(916	)
Net investment hedge — open instruments		—			—		—			—			—
Shareholders’ equity at exchange rate as of December 31, 2008		48,992			25,084		13,238			3,818			6,852


(a)		The decrease in the heading “Other currencies and equity affiliates” is mainly explained by the change in the consolidation method of Sanofi-Aventis (see Note 3 to the Consolidated Financial Statements). The contribution to the shareholders’ equity of this investment is now reclassified into the heading for the Eurozone.

As a result of this policy, the impact of currency exchange rate fluctuations on consolidated income, as illustrated in Note 7 to the Consolidated Financial Statements, has not been significant over the last three years despite the considerable fluctuation of the dollar (nil result in 2010, loss of €32 million in 2009, gain of €112 million in 2008).

Page 84

Stock market risk

The Group holds interests in a number of publicly-traded companies (see Notes 12 and 13 to the Consolidated Financial Statements). The market value of these holdings fluctuates due to various factors, including stock market trends, valuations of the sectors in which the companies operate, and the economic and financial condition of each individual company.

Liquidity risk

TOTAL S.A. has confirmed lines of credit granted by international banks, which are calculated to allow it to manage its short-term liquidity needs as required.

As of December 31, 2010, these lines of credit amounted to $9,592 million, of which $9,581 million was unused. The agreements for the lines of credit granted to TOTAL S.A. do not contain conditions related to the Company’s financial ratios, to its financial ratings from specialized agencies, or to the occurrence of events that could have a material adverse effect on its financial position. As of December 31, 2010, the aggregate amount of the principal confirmed lines of credit granted by international banks to Group companies, including TOTAL S.A., was $10,395 million, of which $10,383 million was unused. The lines of credit granted to Group companies other than TOTAL S.A. are not intended to finance the Group’s general needs; they are intended to finance either the general needs of the borrowing subsidiary or a specific project.

The following tables show the maturity of the financial assets and liabilities of the Group as of December 31, 2010, 2009 and 2008 (see Note 20 to the Consolidated Financial Statements).


As of December 31, 2010
(M€)	Less than															More than
Assets/(Liabilities)	one year			1-2 years			2-3 years			3-4 years			4-5 years			5 years			Total

Non-current financial debt (notional value excluding interests)					(3,355	)		(3,544	)		(2,218	)		(3,404	)		(6,392	)		(18,913	)
Current borrowings		(9,653	)																	(9,653	)
Other current financial liabilities		(159	)																	(159	)
Current financial assets		1,205																		1,205
Cash and cash equivalents		14,489																		14,489

Net amount before financial expense		5,882			(3,355	)		(3,544	)		(2,218	)		(3,404	)		(6,392	)		(13,031	)
Financial expense on non-current financial debt		(843	)		(729	)		(605	)		(450	)		(358	)		(1,195	)		(4,180	)
Interest differential on swaps		461			334			153			33			2			(78	)		905

Net amount		5,500			(3,750	)		(3,996	)		(2,635	)		(3,760	)		(7,665	)		(16,306	)


As of December 31, 2009
(M€)	Less than															More than
Assets/(Liabilities)	one year			1-2 years			2-3 years			3-4 years			4-5 years			5 years			Total

Non-current financial debt (notional value excluding interests)					(3,658	)		(3,277	)		(3,545	)		(2,109	)		(5,823	)		(18,412	)
Current borrowings		(6,994	)																	(6,994	)
Other current financial liabilities		(123	)																	(123	)
Current financial assets		311																		311
Cash and cash equivalents		11,662																		11,662


Net amount before financial expense		4,856			(3,658	)		(3,277	)		(3,545	)		(2,109	)		(5,823	)		(13,556	)
Financial expense on non-current financial debt		(768	)		(697	)		(561	)		(448	)		(301	)		(1,112	)		(3,887	)
Interest differential on swaps		447			233			100			25			(16	)		(55	)		734

Net amount		4,535			(4,122	)		(3,738	)		(3,968	)		(2,426	)		(6,990	)		(16,709	)


As of December 31, 2008
(M€)	Less than															More than
Assets/(Liabilities)	one year			1-2 years			2-3 years			3-4 years			4-5 years			5 years			Total

Non-current financial debt (notional value excluding interests)					(2,992	)		(3,658	)		(3,324	)		(3,232	)		(2,093	)		(15,299	)
Current borrowings		(7,722	)																	(7,722	)
Other current financial liabilities		(158	)																	(158	)
Current financial assets		187																		187
Cash and cash equivalents		12,321																		12,321


Net amount before financial expense		4,628			(2,992	)		(3,658	)		(3,324	)		(3,232	)		(2,093	)		(10,671	)
Financial expense on non-current financial debt		(554	)		(512	)		(431	)		(299	)		(189	)		(174	)		(2,159	)
Interest differential on swaps		118			211			100			62			37			(7	)		521

Net amount		4,192			(3,293	)		(3,989	)		(3,561	)		(3,384	)		(2,274	)		(12,309	)

Page 85

In addition, the Group guarantees bank debt and finance lease obligations of certain non-consolidated companies and equity affiliates. A payment would be triggered by failure of the guaranteed party to fulfill its obligation covered by the guarantee, and no assets are held as collateral for these guarantees. Maturity dates and amounts are set forth in Note 23 to the Consolidated Financial Statements (“Guarantees given against borrowings”).

The Group also guarantees the current liabilities of certain non-consolidated companies. Performance under these guarantees would be triggered by a financial default of these entities. Maturity dates and amounts are set forth in Note 23 to the Consolidated Financial Statements (“Guarantees of current liabilities”).

The following table sets forth financial assets and liabilities related to operating activities as of December 31, 2010, 2009 and 2008 (see Note 28 to the Consolidated Financial Statements).


As of December 31
(M€)
Assets/(Liabilities)	2010			2009			2008

Accounts payable		(18,450	)		(15,383	)		(14,815	)
Other operating liabilities		(3,574	)		(4,706	)		(4,297	)
including financial instruments related to commodity contracts		(559	)		(923	)		(1,033	)
Accounts receivable, net		18,159			15,719			15,287
Other operating receivables		4,407			5,145			6,208
including financial instruments related to commodity contracts		499			1,029			1,664

Total		542			775			2,383

These financial assets and liabilities mainly have a maturity date below one year.

Credit risk

Credit risk is defined as the risk of the counterparty to a contract failing to perform or pay the amounts due.

The Group is exposed to credit risks in its operating and financing activities. The Group’s maximum exposure to credit risk is partially related to financial assets recorded on its balance sheet, including energy derivative instruments that have a positive market value.

The following table presents the Group’s maximum credit risk exposure:


As of December 31,
(M€)
Assets/(Liabilities)	2010		2009		2008

Loans to equity affiliates (Note 12)		2,383		2,367		2,005
Loans and advances (Note 14)		1,596		1,284		1,403
Hedging instruments of non-current financial debt (Note 20)		1,870		1,025		892
Accounts receivable (Note 16)		18,159		15,719		15,287
Other operating receivables (Note 16)		4,407		5,145		6,208
Current financial assets (Note 20)		1,205		311		187
Cash and cash equivalents (Note 27)		14,489		11,662		12,321

Total		44,109		37,513		38,303

The valuation allowance on loans and advances and on accounts receivable and other operating receivables is detailed respectively in Notes 14 and 16 to the Consolidated Financial Statements.

As part of its credit risk management related to operating and financing activities, the Group has developed margin call contracts with certain counterparties. As of December 31, 2010, the net amount received as part of these margin calls was €1,560 million (against €693 million as of December 31, 2009).

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Credit risk is managed by the Group’s business segments as follows:

• Upstream Segment

• Exploration & Production

Risks arising under contracts with government authorities or other oil companies or under long-term supply contracts necessary for the development of projects are evaluated during the project approval process. The long-term aspect of these contracts and the high-quality of the other parties lead to a low level of credit risk.

Risks related to commercial operations, other than those described above (which are, in practice, directly monitored by subsidiaries), are subject to procedures for establishing and reviewing credit.

Customer receivables are subject to provisions on a case-by-case basis, based on prior history and management’s assessment of the facts and circumstances.

• Gas & Power

The Gas & Power division deals with counterparties in the energy, industrial and financial sectors throughout the world. Financial institutions providing credit risk coverage are highly rated international bank and insurance groups.

Potential counterparties are subject to credit assessment and approval before concluding transactions and are thereafter subject to regular review, including re-appraisal and approval of the limits previously granted.

The creditworthiness of counterparties is assessed based on an analysis of quantitative and qualitative data regarding financial standing and business risks, together with the review of any relevant third party and market information, such as data published by rating agencies. On this basis, credit limits are defined for each potential counterparty and, where appropriate, transactions are subject to specific authorisations.

Credit exposure, which is essentially an economic exposure or an expected future physical exposure, is permanently monitored and subject to sensitivity measures.

Credit risk is mitigated by the systematic use of industry standard contractual frameworks that permit netting, enable requiring added security in case of adverse change in the counterparty risk, and allow for termination of the contract upon occurrence of certain events of default.

• Downstream Segment

• Refining & Marketing

Internal procedures for the Refining & Marketing division include rules on credit risk that describe the basis of internal control in this domain, including the separation of authority between commercial and financial operations. Credit policies are defined at the local level, complemented by the implementation of procedures to monitor customer risk (credit committees at the subsidiary level, the creation of credit limits for corporate customers, portfolio guarantees, etc.).

Each entity also implements monitoring of its outstanding receivables. Risks related to credit may be mitigated or limited by requiring security or guarantees.

Bad debts are provisioned on a case-by-case basis at a rate determined by management based on an assessment of the facts and circumstances.

• Trading & Shipping

Trading & Shipping deals with commercial counterparties and financial institutions located throughout the world. Counterparties to physical and derivative transactions are primarily entities involved in the oil and gas industry or in the trading of energy commodities, or financial institutions. Credit risk coverage is concluded with financial institutions, international banks and insurance groups selected in accordance with strict criteria.

The Trading & Shipping division has a strict policy of internal delegation of authority governing establishment of country and counterparty credit limits and approval of specific transactions. Credit exposures contracted under these limits and approvals are monitored on a daily basis.

Potential counterparties are subject to credit assessment and approval prior to any transaction being concluded and all active counterparties are subject to regular reviews, including re-appraisal and approval of granted limits. The creditworthiness of counterparties is assessed based on an analysis of quantitative and qualitative data regarding financial standing and business risks, together with the review of any relevant third party and market information, such as ratings published by Standard & Poor’s, Moody’s Investors Service and other agencies.

Contractual arrangements are structured so as to maximize the risk mitigation benefits of netting between transactions wherever possible and additional protective terms providing for the provision of security in the event of financial

Page 87

deterioration and the termination of transactions on the occurrence of defined default events are used to the greatest permitted extent.

Credit risks in excess of approved levels are secured by means of letters of credit and other guarantees, cash deposits and insurance arrangements. In respect of derivative transactions, risks are secured by margin call contracts wherever possible.

• Chemicals Segment

Credit risk in the Chemicals segment is primarily related to commercial receivables. Each division implements procedures for managing and provisioning credit risk that differ based on the size of the subsidiary and the market in which it operates. The principal elements of these procedures are:

	•		implementation of credit limits with different authorization procedures for possible credit overruns;

	•		use of insurance policies or specific guarantees (letters of credit);

	•		regular monitoring and assessment of overdue accounts (aging balance), including collection procedures; and

	•		provisioning of bad debts on a customer-by-customer basis, according to payment delays and local payment practices (provisions may also be calculated based on statistics).

Page 88

32) Other risks and contingent liabilities

TOTAL is not currently aware of any exceptional event, dispute, risks or contingent liabilities that could have a material impact on the assets and liabilities, results, financial position or operations of the Group.

Antitrust investigations

For the year ended 2010, the Group has not been fined pursuant to a Court ruling. The principal antitrust proceedings in which the Group is involved are described thereafter.

Chemicals Segment

•		As part of the spin-off of Arkema¹ in 2006, TOTAL S.A. or certain other Group companies agreed to grant Arkema guarantees for potential monetary consequences related to antitrust proceedings arising from events prior to the spin-off.

		These guarantees cover, for a period of ten years, 90% of amounts paid by Arkema related to (i) fines imposed by European authorities or European member-states for competition law violations, (ii) fines imposed by U.S. courts or antitrust authorities for federal antitrust violations or violations of the competition laws of U.S. states, (iii) damages awarded in civil proceedings related to the government proceedings mentioned above, and (iv) certain costs related to these proceedings. The guarantee related to anti-competition violations in Europe applies to amounts above a €176.5 million threshold. On the other hand, the agreements provide that Arkema will indemnify TOTAL S.A. or any Group company for 10% of any amount that TOTAL S.A. or any Group company are required to pay under any of the proceedings covered by these guarantees.

		If one or more individuals or legal entities, acting alone or together, directly or indirectly holds more than one-third of the voting rights of Arkema, or if Arkema transfers more than 50% of its assets (as calculated under the enterprise valuation method, as of the date of the transfer) to a third party or parties acting together, irrespective of the type or number of transfers, these guarantees will become void.

•		In the United States, investigations into certain commercial practices of some subsidiaries of the Arkema group have been closed since 2007; no charges have been brought against Arkema. Civil liability lawsuits, for which TOTAL S.A. has been named as the parent company, are about to be closed and are not expected to have a significant impact on the Group’s financial position.

•		In Europe, since May 2006, the European Commission has fined companies of the Group in its configuration prior to the spin-off an overall amount of €385.47 million, of which Elf Aquitaine and/or TOTAL S.A. and their subsidiaries were held jointly liable for €280.17 million, Elf Aquitaine being personally fined €23.6 million for deterrence. These fines are entirely settled as of today.

		As a result², since the spin-off, the Group has paid the overall amount of €188.07 million, corresponding to 90% of the fines overall amount once the threshold provided for by the guarantee is deducted.

		The European Commission imposed these fines following investigations between 2000 and 2004 into commercial practices involving eight products sold by Arkema. Five of these investigations resulted in prosecutions from the European Commission for which Elf Aquitaine has been named as the parent company, and two of these investigations named TOTAL S.A. as the ultimate parent company of the Group.

		TOTAL S.A. and Elf Aquitaine are contesting their liability based solely on their status as parent companies and appealed for cancellation and reformation of the rulings that are still pending before the relevant EU court of appeals or supreme court of appeals.

		Besides, a civil proceeding against Arkema and five groups of companies was initiated before a German regional court by a third party for an alleged damage pursuant to one of the above described legal proceedings. TOTAL S.A. was summoned to serve notice of the dispute before this court. At this point, the probability to have a favorable verdict and the financial impacts of this procedure are uncertain due to the number of legal difficulties it gave rise to, the lack of documented claim and the complex evaluation of the alleged damage.

		Arkema began implementing compliance procedures in 2001 that are designed to prevent its employees from violating antitrust provisions. However, it is not possible to exclude the possibility that the relevant authorities could commence additional proceedings involving Arkema regarding events prior to the spin-off, as well as Elf Aquitaine and/or TOTAL S.A. based on their status as parent company.


¹		Arkema is used in this section to designate those companies of the Arkema group whose ultimate parent company is Arkema S.A. Arkema became an independent company after being spun-off from TOTAL S.A. in May 2006.

²		This amount does not take into account a case that led to Arkema, prior to Arkema’s spin-off from TOTAL, and Elf Aquitaine being fined jointly €45 million and Arkema being fined €13.5 million. This case is referred to in past Registration Documents.

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Within the framework of the legal proceedings described above, a €17 million reserve is booked in the Group’s consolidated financial statements as of December 31, 2010.

Downstream segment

•		Pursuant to a statement of objections received by Total Nederland N.V. and TOTAL S.A. (based on its status as parent company) from the European Commission, Total Nederland N.V. was fined in 2006 €20.25 million, which has been paid, and for which TOTAL S.A. was held jointly liable for €13.5 million. TOTAL S.A. appealed this decision before the relevant court and this appeal is still pending.

		In addition, pursuant to a statement of objections received by Total Raffinage Marketing (formerly Total France) and TOTAL S.A. from the European Commission regarding another product line of the Refining & Marketing division, Total Raffinage Marketing was fined €128.2 million in 2008, which has been paid, and for which TOTAL S.A. was held jointly liable based on its status as parent company. TOTAL S.A. also appealed this decision before the relevant court and this appeal is still pending.

•		Finally, TotalGaz and Total Raffinage Marketing received a statement of objections from the French Antitrust Authority (Autorité de la concurrence française) regarding alleged antitrust practices concerning another product line of the Refining & Marketing division. The case was dismissed by decision of the French antitrust authorities on December 17, 2010.

Given the discretionary powers granted to the antitrust authorities for determining fines relating to antitrust regulations, it is not currently possible to determine with certainty the outcome of these investigations and proceedings. TOTAL S.A. and Elf Aquitaine are contesting their liability and the method of determining these fines. Although it is not possible to predict the ultimate outcome of these proceedings, the Group believes that they will not have a material adverse effect on its financial situation or consolidated results.

Buncefield

On December 11, 2005, several explosions, followed by a major fire, occurred at an oil storage depot at Buncefield, north of London. This depot was operated by Hertfordshire Oil Storage Limited (HOSL), a company in which TOTAL’s UK subsidiary holds 60% and another oil group holds 40%.

The explosion caused injuries, most of which were minor injuries, to a number of people and caused property damage to the depot and the buildings and homes located nearby. The official Independent Investigation Board has indicated that the explosion was caused by the overflow of a tank at the depot. The Board’s final report was released on December 11, 2008. The civil procedure for claims, which had not yet been settled, took place between October and December 2008. The Court’s decision of March 20, 2009, declared TOTAL’s UK subsidiary liable for the accident and solely liable for indemnifying the victims. The subsidiary appealed the decision. The appeal trial took place in January 2010. The Court of Appeals, by a decision handed down on March 4, 2010, confirmed the prior judgment. The Supreme Court of United Kingdom has partially authorized TOTAL’s UK subsidiary to contest the decision. The hearings before the Supreme Court are expected to be held during the first half of 2011.

The Group carries insurance for damage to its interests in these facilities, business interruption and civil liability claims from third parties. The provision for the civil liability that appears in the Group’s consolidated financial statements as of December 31, 2010, stands at €194 million after taking into account the payments previously made.

The Group believes that, based on the information currently available, on a reasonable estimate of its liability and on provisions recognized, this accident should not have a significant impact on the Group’s financial situation or consolidated results.

In addition, on December 1, 2008, the Health and Safety Executive (HSE) and the Environment Agency (EA) issued a Notice of prosecution against five companies, including TOTAL’s UK subsidiary. By a judgment on July 16, 2010, TOTAL’s UK subsidiary was fined £3.6 million. The decision takes into account a number of elements that have mitigated the impact of the charges brought against it.

Erika

Following the sinking in December 1999 of the Erika, a tanker that was transporting products belonging to one of the Group companies, the Tribunal de grande instance of Paris convicted TOTAL S.A. of marine pollution pursuant to a judgment issued on January 16, 2008, finding that TOTAL S.A. was negligent in its vetting procedure for vessel selection, and ordering TOTAL S.A. to pay a fine of €375,000. The court also ordered compensation to be paid to those affected by the pollution from the Erika up to an aggregate amount of €192 million, declaring TOTAL S.A. jointly and severally liable for such payments together with the Erika’s inspection and classification firm, the Erika’s owner and the Erika’s manager.

TOTAL has appealed the verdict of January 16, 2008. In the meantime, it nevertheless proposed to pay third parties who so requested definitive compensation as determined by the court. Forty-one third parties have been compensated for an aggregate amount of €171.5 million.

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By a decision dated March 30, 2010, the Court of Appeal of Paris upheld the lower court verdict pursuant to which TOTAL S.A. was convicted of marine pollution and fined €375,000. TOTAL appealed this decision to the French Supreme Court (Cour de cassation).

However, the Court of Appeal ruled that TOTAL S.A. bears no civil liability according to the applicable international conventions and consequently ruled that TOTAL S.A. be not convicted.

TOTAL S.A. believes that, based on the information currently available, the case should not have a significant impact on the Group’s financial situation or consolidated results.

Blue Rapid and the Russian Olympic Committee — Russian regions and Interneft

Blue Rapid, a Panamanian company, and the Russian Olympic Committee filed a claim for damages with the Paris Commercial Court against Elf Aquitaine concerning the withdrawal of one of its subsidiaries from an exploration and production project in Russia that was negotiated in the early 1990s. Elf Aquitaine believes this claim to be unfounded. On January 12, 2009, the Commercial Court of Paris rejected Blue Rapid’s claim and found that the Russian Olympic Committee did not have standing in the matter. This decision has been appealed. The hearings should be held during the first half of 2011.

In connection with the same facts, and fifteen years after the termination of this exploration and production project, a Russian company and two regions of the Russian Federation have launched an arbitration procedure against a former subsidiary of Elf Aquitaine that was liquidated in 2005, claiming damages of an unspecified amount at this stage of the procedure. The Group considers this claim to be unfounded. The Group has reserved its rights to take any actions and/or measures that would be appropriate to defend its interests.

Iran

In 2003, the United States Securities and Exchange Commission (SEC) followed by the Department of Justice (DoJ) issued a formal order directing an investigation in connection with the pursuit of business in Iran, by certain oil companies including, among others, TOTAL.

The inquiry concerns an agreement concluded by the Company with a consultant concerning a gas field in Iran and aims to verify whether certain payments made under this agreement would have benefited Iranian officials in violation of the Foreign Corrupt Practices Act (FCPA) and the Company’s accounting obligations.

Investigations are still pending and the Company is cooperating with the SEC and the DoJ. In 2010, the Company opened talks with U.S. authorities, without any acknowledgement of facts, to consider an out-of-court settlement. Generally, out-of-court settlements with U.S. authorities include payment of fines and the obligation to improve internal compliance systems or other measures.

In this same case, a judicial inquiry related to TOTAL was initiated in France in 2006. In 2007, the Company’s Chief Executive Officer was placed under formal investigation in relation to this inquiry, as the former President of the Middle East department of the Group’s Exploration & Production division. The Company has not been notified of any significant developments in the proceedings since the formal investigation was launched.

At this point, the Company cannot determine when these investigations will terminate, and cannot predict their results, or the outcome of the talks that have been initiated, or the costs of a potential out-of-court settlement. Resolving this case is not expected to have a significant impact on the Group’s financial situation or any impact on its future planned operations.

33) Other information

A) Research and development costs

Research and development costs incurred by the Group in 2010 amounted to €715 million (€650 million in 2009 and €612 million in 2008), corresponding to 0.4% of the sales.

The staff dedicated in 2010 to these research and development activities are estimated at 4,087 people (4,016 in 2009 and 4,285 in 2008).

B) Carbon dioxide emission rights

The principles governing the accounting for emission rights are presented in Note 1 paragraph T to the Consolidated Financial Statements.

As of December 31, 2010, given the emission rights granted in the National Allocations Plans (NAPs), the position of the Group’s industrial facilities that are covered by the European Union Emissions Trading System (EU ETS) is getting longer. This long position is expected to be confirmed at the end of the 2008 — 2012 period.

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34)

Changes in progress in the Group structure

•

Upstream

	•		TOTAL finalized in November 2010 an agreement in principle with Perenco, an independent exploration and production French company, to sell its 75.8% equity in its upstream Cameroonian affiliate Total E&P Cameroun. This agreement is subject to the Cameroonian Authorities’ approval.

			As of December 31, 2010, assets and liabilities of the affiliate Total E&P Cameroun have been classified respectively as “Assets classified as held for sale” on the face of the Consolidated Balance Sheet for €183 million and as “Liabilities directly associated with the assets classified as held for sale” on the face of the Consolidated Balance Sheet for €137 million. The concerned assets and liabilities mainly include tangible assets for €109 million and provisions and other non-current liabilities for €74 million.

	•		In addition to the agreement signed during September 2010 (see Note 3 to the Consolidated Financial Statements), TOTAL signed in December 2010 an agreement to acquire an additional 7.5% interest in Australia’s GLNG project from Santos for an amount of $281 million. This will increase Total’s overall stake in the project to 27.5%.

			At the same time, South Korea’s Kogas has signed an agreement to join the project with a 15% stake. Once both transactions, which are subject to the approval of Australia’s Foreign Investment Review Board, have been finalized, interests in the project will be: Santos (30%, operator), Petronas (27.5%), TOTAL (27.5%) and Kogas (15%).

	•		Total E&P Canada Ltd., a TOTAL subsidiary, and Suncor Energy Inc. (Suncor) have signed in December 2010 several agreements to form a strategic oil sands alliance encompassing the Suncor-operated Fort Hills mining project, the TOTAL-operated Joslyn mining project and the Suncor-operated Voyageur upgrader project. All three assets are located in the Athabasca region of the province of Alberta, in Canada. Under the alliance, the companies will pool their combined interests in these projects, with the respective operator holding 51% and the other partner 49%.

			The agreements comprise four significant and related transactions:

	•		TOTAL is acquiring 19.2% of Suncor’s interest in the Fort Hills project. Taking into account the acquisition of UTS, finalized in September 2010, TOTAL will have an overall 39.2% interest in Fort Hills. Suncor, as operator, will hold 40.8%;

	•		Suncor is acquiring 36.75% of TOTAL’s interest in the Joslyn project. TOTAL, as operator, will retain a 38.25% interest in the project;

	•		TOTAL is also acquiring a 49% stake in the Suncor-operated Voyageur upgrader project;

	•		As a result of the terms of these transactions and the related net balancing of the portfolio, in particular to contribute to the past costs of the Voyageur project, TOTAL will pay Suncor CAD 1,751 million, with a value date of January 1^st, 2011.

			The implementation of the agreements is subject to securing the necessary regulatory approvals from the Government of Canada and certain other approvals.

			As a result of the agreements, TOTAL will no longer proceed with the planned construction of an upgrader in Edmonton.

			As of December 31, 2010, the share of assets and liabilities of the Joslyn mining project covered by the agreements has been classified respectively as “Assets classified as held for sale” on the face of the Consolidated Balance Sheet for €622 million and as “Liabilities directly associated with the assets classified as held for sale” on the face of the Consolidated Balance Sheet for €8 million. The concerned assets include mineral interests for €390 million and tangible assets for €232 million.

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•

Chemicals

	•		TOTAL has announced in December 2010 a plan to sell its photocure and coatings resins businesses to Arkema for a €550 million enterprise value. The divestment is subject to the applicable legally required consultation and notification processes for employee representatives at TOTAL and Arkema and to the approval of the anti-trust authorities in the countries concerned. It could take place in the first half of 2011.

			As of December 31, 2010, assets and liabilities of the photocure and coatings resins businesses have been classified respectively as “Assets classified as held for sale” on the face of the Consolidated Balance Sheet for €465 million and as “Liabilities directly associated with the assets classified as held for sale” on the face of the Consolidated Balance Sheet for €52 million. The concerned assets mainly include a goodwill for €63 million, tangible assets for €196 million and inventories for €138 million.

35.

Consolidation scope

As of December 31, 2010, 687 entities are consolidated of which 596 are fully consolidated, and 91 are accounted for under the equity method (identified with the letter E). This simplified organizational chart shows the main consolidated entities. For each of them, the Group interest is mentioned between brackets. This chart of legal detentions is not exhaustive and does not reflect neither the operational structure nor the relative economic size of the Group entities and the business segments.

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SIGNATURES
Exhibit Index
EX-99.1:Report of Independent Registered Public Accounting Firms
EX-99.2:Consolidated Financial Statements for the year ended December 31, 2010, and notes thereto


	TOTAL S.A.
Date: March 14, 2011	By:	/s/ JEROME SCHMITT
		Name:	Jérôme SCHMITT
		Title:	Treasurer


Exhibit 99.1		Report of Independent Registered Public Accounting Firms

Exhibit 99.2		Consolidated Financial Statements for the year ended December 31, 2010, and notes thereto


		KPMG Audit A division of KPMG S.A.		ERNST & YOUNG Audit

		1, cours Valmy		Faubourg de l’Arche
		92923 Paris La Défense Cedex		11, allée de l’Arche
				92037 Paris La Défense
				Cedex


KPMG Audit A division of KPMG S.A.	ERNST & YOUNG Audit

/s/ JAY NIRSIMLOO	/s/ PASCAL MACIOCE	/s/ LAURENT VITSE

Jay Nirsimloo	Pascal Macioce	Laurent Vitse
Partner	Partner	Partner

Table of Contents

Table of Contents

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