17th Feb 2005 07:49
Total S.A.17 February 2005 February 17, 2005 2004 Record Results Total reports sharply higher 2004 results: • +23% to 9.04 billion euros for adjusted net income(1) • +27% to 14.68 euros for adjusted earnings per share • +35% to 11.2 billion for adjusted net income expressed in dollars(2) • +40% to 18.26 for adjusted earnings per share expressed in dollars Proposed 2004 dividend of 5.40 euros per share, a 15% increase • Results expressed in dollars2-(3) 4th quarter 2004 Full year 2004 3.27 B$ +57% Adjusted net income1 11.2 B$ +35% 5.36 $/share +62% 18.26 $/share +40% 4.20 B$ +122% Net income 12.0 B$ +50% • Results in euros3 4th quarter 2004 Full year 2004 2.52 B• +44% Adjusted net income1 9.04 B• +23% 4.13 •/share +48% 14.68 •/share +27% 3.24 B• +104% Net income 9.61 B• +37% Paris, February 17, 2005 - The Board of Directors of Total, chaired by CEOThierry Desmarest, met on February 16, 2005 to review the fourth quarter 2004results and to close the 2004 consolidated and parent company accounts. Commenting on the results, Thierry Desmarest said : The 2004 market environment has been favorable for the oil industry. Thecombination of very high oil prices, a sharp increase in refining margins and arebound in petrochemical margins during the second half of the year allowed theGroup to reach a new record level of earnings, 9.04 billion euros for adjustednet income, or an increase of 23% compared to 2003, despite the decline in thedollar. Thanks to the commitment of our teams, we enjoyed solid operational performanceby the business segments, particularly the continued growth of Upstreamproduction, as well as ongoing productivity programs, which made significantcontributions to the results. Adjusted earnings per share increased by 27% to 14.68 euros. Expressed indollars, the increase was 40%. Total pursued a large investment program of more than 8.7 billion euros, whileoffering, through a combination of dividends and buybacks, the best return toshareholders among the major oil companies. Total is confident that it can extend its long-term profitable growth largelythrough exploration successes and through giant projects currently beingnegotiated. • Total - consolidated accounts 4Q04 4Q03 % in millions of euros 2004 2003 % 34,832 27,533 +27% Sales 122,700 104,652 +17% 5,077 3,209 +58% Operating income from business segments 17,123 13,004 +32% adjusted for special items 3,460 2,652 +30% • Upstream 12,820 10,476 +22% 1,192 400 +198% • Downstream 3,217 1,970 +63% 425 157 +171% • Chemicals 1,086 558 +95% 2,504 1,633 +53% Net operating income from business 8,792 6,973 +26% segments adjusted for special items 2,366 1,747 +35% Net income 8,886 7,344 +21% adjusted for special items 2,519 1,747 +44% Adjusted net income* 9,039 7,344 +23% 3,237 1,590 +104% Net income 9,612 7,025 +37% 4.13 2.79 +48% Adjusted earnings per share (euros) 14.68 11.56 +27% 3,192 2,810 +14% Investments 8,668 7,728 +12% 654 578 +13% Divestments 1,192 1,878 -37% at selling price 3,688 2,282 +62% Cash flow from operating activities** 14,429 12,487 +16% * adjusted for special items and excluding Total's equity share of amortization of goodwill and intangible assets related to the Sanofi-Aventis merger ** includes disbursements related to the Toulouse-AZF reserve of 29 M• in the fourth quarter 2004, 85 M• in the fourth quarter 2003, 316 M• for the full year 2004 and 719 M• for the full year 2003 •Number of shares 4Q04 4Q03 % millions 2004 2003 % 609.4 625.6 -3% Fully-diluted weighted-average shares 615.9 635.1 -3% • Market environment 4Q04 4Q03 % 2004 2003 % 1.30 1.19 -8%* •/$ 1.24 1.13 -9%* 44.0 29.4 +50% Brent ($/b) 38.3 28.8 +33% 42.4 18.9 +124% European refining margins 32.8 20.9 +57% TRCV ($/t) *change in the dollar versus the euro • Special items 4Q04 4Q03 in millions of euros 2004 2003 (847) (25) Impact of special items on operating income from business (847) (25) segments (119) (1) • Restructuring charges (119) (1)(631)a (17) • Impairments (631)a (17)(97)b (7) • Other (97)b (7) 871 (157) Impact of special items on net income 726 (319) 1,690 - • Gain on dilution from the Sanofi-Aventis merger net of 1,690 - Total's share of special items related to purchase accounting 53 (8) • Gain/(loss) on asset sales 53 22 - - • Additional Toulouse-AZF reserve (98) - (100) (110) • Restructuring charges and early retirement plans (143) (144) (688)c (11) • Impairments (688)c (11) (84) (28) • Other (88) (186)d a including (597) M• in the Chemicals segment b including (92) M• for a provision for environmental remediation in theChemicals segment c including (553) M• in the Chemicals segment d including (155) M• for a provision for alleged anti-competitive practices inthe Chemicals segment • Adjustment for amortization of Sanofi-Aventis merger-related intangibles 4Q04 4Q03 in millions of euros 2004 2003 (153) - Impact on equity income from Total's share* of amortization (153) - of goodwill and intangible assets related to Sanofi-Aventis merger * based on 13% ownership of Sanofi-Aventis at December 31, 2004 • Total's fourth quarter 2004 results > Operating income Compared to the fourth quarter 2003, the fourth quarter 2004 was marked by sharpincreases in crude oil prices and refining margins. The Brent price rose by 50%to an average of 44.0 $/b. European refining margins (TRCV) hit a record high of42.4 $/t on average for the quarter. Over the same period, petrochemical marginsrebounded. The positive impact of the improved oil and chemicals environment was partiallyoffset by the 8% decrease in the dollar relative to the euro. In this context, the operating income from the business segments adjusted forspecial items increased by 58% to 5,077 million euros (M•) in the fourth quarter2004 from 3,209 M• in the fourth quarter 2003. Special items had a negative impact of 847 M• on fourth quarter 2004 operatingincome from the business segments, primarily due to the impairment of assets inthe vinyl products and polyethylene activities in Europe. In the fourth quarter 2003, special items had a negative impact of 25 M• onoperating income from the business segments. Net operating income adjusted for special items increased by 53% to 2,504 M• inthe fourth quarter 2004 from 1,633 M• in the fourth quarter 2003. The lowerpercentage increase, relative to the increase in operating income, is dueprimarily to a higher effective tax rate in the fourth quarter 2004. > Net income Net income adjusted for special items rose to 2,366 M• in the fourth quarter2004 from 1,747 M• in the fourth quarter 2003. Special items had a net positive impact of 871 M• on fourth quarter 2004 netincome and were comprised mainly of : • positive impacts primarily from the gain on dilution related to the merger of Sanofi and Aventis, net of the impact on equity income of Total's share of items recorded by Sanofi-Aventis as part of the merger (restructuring charges, write-offs of certain in-progress R&D costs, and charges resulting from the adjustment of inventories to market value); • partially offsetting the above were negative impacts primarily from the after-tax effect of the special items affecting operating income, notably the asset impairments related to the vinyl products and polyethylene activities in Europe, as well as impairments of goodwill in the Chemicals and Upstream segments. In the fourth quarter 2003, special items had a negative impact on net income of157 M•. Fourth quarter 2004 net income includes a net negative impact of 153 M• onequity income from affiliates for Total's share of the amortization of goodwilland intangible assets related to the Sanofi-Aventis merger. Adjusted net income, which excludes this 153 M• negative impact as well as thespecial items, rose to 2,519 M• in the fourth quarter 2004, an increase of 44%compared to the fourth quarter 2003. During the fourth quarter 2004, the Group bought back 6.05 million of its sharesfor 1.0 billion euros (B•). Adjusted earnings per share, based on 609.4 million fully-dilutedweighted-average shares, increased to 4.13 euros from 2.79 euros in the fourthquarter 2003, an increase of 48%, which is a higher percentage increase than forthe adjusted net income thanks to the accretive effect of share buybacks during2004. Net income rose to 3,237 M• in the fourth quarter 2004 from 1,590 M• in thefourth quarter 2003. > Cash flow Cash flow from operating activities increased to 3,688 M•, a 62% increasecompared to the fourth quarter 2003. Excluding disbursements related to theToulouse-AZF reserve of 29 M• in the fourth quarter 2004 and 85 M• in the fourthquarter 2003, the increase in cash flow from operating activities would havebeen 57%. Investments rose to 3,192 M•, or about 4.1 B$, including 0.6 B$ of assetsreceived in a swap with Gaz de France involving the gas transmission and supplycompanies Gaz du Sud-Ouest (GSO) and Compagnie Francaise du Methane (CFM). Divestments in the fourth quarter 2004 were 654 M•, or about 0.8 B$, includingassets transferred to Gaz de France as part of a swap (approximately 0.2 B$) andthe sale of some financial participations. Net cash flow(4) was 1,150 M• in the fourth quarter 2004 compared to 50 M• inthe fourth quarter 2003. • Upstream > Results 4Q04 4Q03 % in millions of euros 2004 2003 % 3,460 2,652 +30% Operating income 12,820 10,476 +22% adjusted for special items 1,422 1,395 +2% Net operating income 5,834 5,259 +11% adjusted for special items 2,246 1,748 +28% Investments 6,170 5,302 +16% 322 119 +171% Divestments 637 428 +49% at selling price 3,077 2,190 +41% Cash flow from operating activities 10,316 9,214 +12% Operating income from the Upstream segment adjusted for special items increasedby 30% to 3,460 M• in the fourth quarter 2004 from 2,652 M• in the fourthquarter 2003. Fourth quarter 2004 net operating income from the Upstream segment adjusted forspecial items was 1,422 M•, an increase of 2%. This increase, which is significantly lower than the percentage increase foroperating income, is due primarily to two factors : • a higher average tax rate in the fourth quarter 2004 compared to thefourth quarter 2003, due mainly to an increase in production taxed athigher-than-average rates (Nigerian concessions) and to the temporary decreasein production that is taxed at lower-than-average rates (shut-down of the Sincorupgrader in Venezuela and suspended Gulf of Mexico production followingHurricane Ivan), • the impact of reallocating the full-year 2003 contribution of Cepsa inthe fourth quarter 2003 ; if the reallocation had been made since the beginningof 2003, the increase in the fourth quarter 2004 Upstream net operating incomewould have been 10%. The strong increase in cash flow from Upstream operating activities was relatedprimarily to the fourth quarter 2004 decrease in working capital. > Production 4Q04 4Q03 % Upstream production 2004 2003 % 2,628 2,588 +2% Hydrocarbon production (kboe/d) 2,585 2,539 +2% 1,684 1,697 -1% • Liquids (kb/d) 1,695 1,661 +2% 5,323 4,865 +9% • Gas (Mcfd) 4,894 4,786 +2% Hydrocarbon production rose to 2,628 thousand equivalent barrels per day (kboe/d) in the fourth quarter 2004 compared to 2,588 kboe/d in the fourth quarter2003, representing an increase of 1.5%. Adjusted for the negative impact of higher oil and gas prices on entitlementvolumes from production sharing and buy-back contracts(5) ( price effect ), theunderlying increase in production was 4%. The main contributions to the production growth came from Nigeria, notably theAmenam field, Libya, Angola and Indonesia. For the full year 2004, hydrocarbon production increased by 2%. Liquidsproduction increased by 2% to 1,695 kb/d, and gas production also increased by2%. Adjusted for the price effect, 2004 hydrocarbon production growth was 3.7% in2004. In addition to numerous start-ups during the year, notably Yucal Placer inVenezuela, Skirne Byggve in Norway, and Peciko Phase III in Indonesia (whereoperated production set a new record high), production ramp-ups on fieldslaunched in 2003, including Amenam in Nigeria, Matterhorn in the US and Jasminin Angola, contributed strongly to 2004 production growth. > 12/31/04 Reserves Reserves at December 31 2004 2003 % Hydrocarbon reserves (Mboe) 11,148 11,401 -2% • Liquids (Mb) 7,003 7,323 -4% • Gas (Bcf) 22,785 22,267 +2% Proved reserves, calculated according to SEC rules, were 11,148 Mboe at December31, 2004. At the current production rate, the reserve life is 11.8 years. Thenegative impact on proved reserves related to the application of high year-endprices as required by the SEC (Brent at 40.47 $/b on 12/31/2004) wasapproximately 270 Mboe. The reserve replacement rate(6) for the 2002-2004 period, based on SEC rules,was 120% for the consolidated subsidiaries only and 106% for the Group. Excluding the impact of changes in year-end prices and using a Brent 25 $/bscenario, the reserve replacement rate for the 2002-2004 period would be 131%for the consolidated subsidiaries only and 116% for the Group. Over the same period, for consolidated subsidiaries only, the finding cost(7)was 0.8 $/boe and the reserve replacement cost(8) was 5.4 $/boe. As of year-end 2004, Total's portfolio of proved and probable reserves(9) issolid and diversified, representing close to 20 years of production at thecurrent rate(10). > Recent highlights Successful exploration in the fourth quarter 2004 included discoveries, such asin Nigeria west of the Usan field (Total-operated, 20%), in Bolivia on the Ipatiblock (Total-operated, 80%) and in Algeria on the Timimoun permit(Total-operated, 63.75%). In addition, Total announced that it entered the Bechar permit in Algeria withan 80% interest. Since the start of 2005, Total has announced a new extension of the Usandiscovery in Nigeria, the acquisition of a 49% interest in Block 4 of PlataformaDeltana in Venezuela, participation in two exploration blocks in the Australiandeep offshore and on two blocks in Mauritania. Also during the fourth quarter 2004, in Venezuela the Sincor upgrader wasdebottlenecked, increasing its capacity to 215 kb/d. The upgrader was restartedearly in December as expected. In Upstream LNG, sales(11) grew by 7% in 2004, and the Group took important newsteps, notably signing an agreement in Iran to set the general framework for thePars LNG project (Total 30%). At the beginning of 2005, Yemen LNG (Total 42.9%, project leader) signed threeheads of agreements to sell LNG over 20 years to Tractebel (2.5 Mt/y), Total (2Mt/y) and Kogas (1.3 to 2 Mt/y). Calls for tenders on the development of theproject have been issued. In mid-stream gas, Total and Gaz de France signed the final agreements to swapinterests in GSO and CFM and giving the Group access to regasification capacityof 2.25 Bm3/year(12) in the Fos Cavaou terminal currently under development inthe south of France. In addition, Total has secured regasification capacity of 10 Bm3/year, over aperiod of 20 years starting in 2009, at the Sabine Pass LNG receiving terminal,which is under development in Louisiana (US). • Downstream > Results 4Q04 4Q03 % in millions of euros 2004 2003 % 1,192 400 +198% Operating income 3,217 1,970 +63% adjusted for special items 834 182 +358% Net operating income 2,302 1,460 +58% adjusted for special items 623 704 -12% Investments 1,516 1,235 +23% 73 346 -79% Divestments 200 466 -57% at selling price 159 (213) ns Cash flow from operating activities 3,111 3,099 - Operating income from the Downstream segment adjusted for special itemsincreased by 198% to 1,192 M• from 400 M• in the fourth quarter 2003. The increase was due mainly to a sharp improvement in the refining environmentduring the fourth quarter 2004, despite a decline in the dollar. Strongdistillate demand in Europe combined with an increase in the price differentialbetween heavy and light grades of crude created favorable market conditions thatwere only partially reflected by the increase in TRCV margins. Downstream results also continued to benefit from self-help programs. Net operating income from the Downstream segment adjusted for special items roseto 834 M• in the fourth quarter 2004 from 182 M• in the fourth quarter 2003. The larger increase, relative to the increase in operating income, is due mainlyto the negative impact on the Downstream segment of allocating the full-year2003 contribution of Cepsa among the operating segments starting in the fourthquarter 2003, versus the former practice of including the entire Cepsacontribution in the Downstream segment only. > Refinery throughput 4Q04 4Q03 % Refinery throughput (kb/d) 2004 2003 % 2,485 2,602 -4% Total refinery throughput* 2,496 2,481 +1% 951 1,069 -11% France 995 968 +3% 1,202 1,199 - Rest of Europe* 1,188 1,200 -1% 332 334 -1% Rest of world 313 313 - * includes share of Cepsa Refinery throughput was 2,485 kb/d in the fourth quarter 2004. The utilizationrate was 92% despite major turnarounds for maintenance at refineries in Dunkirk,Vlissingen and Antwerp. For the full year 2004, refinery throughput increased by 1% to 2,496 kb/dcompared to 2,481 kb/d in 2003. The utilization rate rose to 93% in 2004 from92% in 2003. > Recent highlights Total announced in October the signing of a joint venture with Sinochem for thecreation of a network of 200 service stations in northern China, where the twocompanies are already working together at the Dalian refinery. In November, Total acquired a service station network in Puerto Rico that hasabout a 6% market share. l Chemicals > Results 4Q04 4Q03 % in millions of euros 2004 2003 % 5,245 4,335 +21% Sales 20,042 17,260 +16% 425 157 +171% Operating income 1,086 558 +95% adjusted for special items 248 56 +343% Net operating income 656 254 +158% adjusted for special items 292 327 -11% Investments 905 1,115 -19% 54 94 -43% Divestments 122 891 -86% at selling price 327 172 +90% Cash flow from operating activities 556 268 +107% * includes disbursements related to the Toulouse-AZF reserve of 29 M• in thefourth quarter 2004, 85 M• in the fourth quarter 2003, 316 M• for the full year2004 and 719 M• for the full year 2003 Chemicals sales increased by 21% to 5,245 M• in the fourth quarter 2004 from4,335 M• in the fourth quarter 2003. Operating income adjusted for special items increased sharply to 425 M• from 157M• in the fourth quarter 2003. This performance was due mainly to a higher contribution from base chemicals,reflecting the rebound in petrochemicals that began in the third quarter 2004.The improvement in the utilization rate of the steamcrackers compared to thefourth quarter 2003 allowed the Group to benefit fully from the favorable marketconditions. In the fourth quarter 2004, margins for the Intermediates improved despite theweakness of the dollar and an increase in raw material costs. Specialties continued to perform well in terms of results and cash flow. Net operating income from the Chemicals segment adjusted for special items roseto 248 M• in the fourth quarter 2004 from 56 M• in the fourth quarter 2003. > Recent highlights Arkema, an entity comprised of three activities (Vinyl Products, IndustrialChemicals and Performance Polymers) was created on October 1, 2004. Itsmanagement team is building an organization that will allow Arkema to bespun-off as an independent entity in 2006(13). In January 2005, Arkema announced a plan to restructure its vinyl productsbusiness in France, to improve the performance of its chlorochemicals chain. • Total's full year 2004 results Consolidated sales increased by 17% to 122,700 M• in 2004 from 104,652 M• in2003. > Operating income Operating income from the business segments adjusted for special items increasedby 32% to 17,123 M• from 13,004 M• in 2003. The 4.1 B• increase from 2003 to 2004 in operating income from business segmentsadjusted for special items is due primarily to the 3.7 B• improvement in themarket environment, which includes : • + 3.1 B• higher oil and gas prices(14) • + 1.5 B• stronger refining environment, including benefits not reflected in the higher TRCV margin(15) • - 1.1 B• decline in the dollar relative to the euro • + 0.3 B• better market conditions for Chemicals • - 0.2 B• weaker environment for marketing • + 0.1 B• stronger environment for shipping In the Upstream segment, the benefit of 3.7% underlying production growth waspartially offset by an increase in technical costs to 8.0 $/boe in 2004. Morethan half of the 0.7 $/boe increase in technical costs compared to 2003 is dueto the impacts of foreign exchange and of the price effect on production volumes(production sharing and buy-back contracts). In the Downstream segment, self-help programs contributed 0.15 B• to theimprovement in 2004 operating income. In the Chemicals segment, the 12% increase in olefin production (which includesthe integration of the Total-Samsung JV in South Korea) and ongoing self-helpprograms contributed 0.2 B• to the improvement in operating income. Special items had a negative impact of 847 M•(16) on operating income from thebusiness segments in 2004. In 2003, special items had a negative impact of 25 M€16 on operating income fromthe business segments. Net operating income from the business segments adjusted for special itemsincreased by 26% to 8,792 M• in 2004 from 6,973 M• in 2003. The lower percentageincrease, relative to the increase in operating income, is due primarily to ahigher effective tax rate in 2004. > Net income Net income adjusted for special items increased to 8,886 M• from 7,344 M• in2003. Special items had a positive effect on net income of 726 M€16 in 2004. In 2003,special items had a negative effect on net income of 319 M€16. Adjusted net income for 2004, which excludes the negative impact of 153 M• onequity income for Total's share of the amortization of goodwill and intangibleassets related to the Sanofi-Aventis merger as well as special items, showed anincrease of 23% to 9,039 M• as compared to 7,344 M• in 2003. In 2004, the Group bought back 22.55 million of its shares for 3.55 B•. InJanuary 2005, the Group bought back 1.5 million of its shares for 0.24 B•. At December 31, 2004, there were 607.4 million fully-diluted shares compared to625.1 million fully-diluted shares at the end of 2003. Adjusted earnings per share, calculated based on 615.9 million fully-dilutedshares in 2004, was 14.68 euros compared to 11.56 euros in 2003, an increase of27%, reflecting the accretive effect of the share buyback. Reported net income increased to 9,612 M• in 2004 from 7,025 M• in 2003. > Cash flow Cash flow from operating activities rose to 14,429 M• in 2004, a 16% increasecompared to 2003. Excluding disbursements related to the reserve forToulouse-AZF of 316 M• in 2004 and 719 M• in 2003, cash flow from operationsincreased by 12%. In 2004, investments were 8,668 M•, or about 10.7 B$, in line with estimatesmade using an exchange rate assumption of 1.1 dollars per euro. Divestments in 2004 were 1,192 M•, including sales of financial particpationsand, in the Upstream segment, sales of non-strategic assets and asset swaps withGaz de France involving GSO and CFM in France. Net cash flow was 6,953 M• in 2004 compared to 6,637 M• in 2003. The net-debt-to-equity ratio was 26.7% at December 31, 2004 compared to 25.9% atDecember 31, 2003. l 2005 Sensitivities Change Sensitivities 2005(e)(17) Operating income Net income•/$ + 0.1 $/• - 1.05 B• - 0.60 B• Brent + 1 $/b + 0.45 B• + 0.20 B• Refining margins TRCV + 1 $/t + 0.09 B• + 0.06 B• • Total S.A. parent company accounts and proposed dividend The parent company, Total S.A., reported net earnings of 3,443 M• in 2004compared to 3,272 M• in 2003. The Board of Directors, after closing theaccounts, decided to propose at the May 17, 2005 Annual General Meeting adividend of 5.40 euros per share for 2004, a 15% increase compared to 2003. The pay-out ratio for Total in 2004, based on adjusted net income, would be 37%,above the average of the other majors(18). Taking into account the interim dividend payment of 2.40 euros per share made onNovember 24, 2004, the remaining dividend payable of 3 euros per action will bepaid on May 24, 2005. • Adoption of IFRS accounting As indicated in the September 5, 2004 presentation, impacts related to theadoption of International Financial Reporting Standards (IFRS), effective as ofJanuary 1, 2004 for the balance sheet and 2004 results, will be published inApril 2005. There will be a conference call on April 13, 2005 to review the mainelements of the change to IFRS. • Summary and outlook The return on average capital employed (ROACE(19)) for Total was 24% in 2004,which was at the highest level among the majors. Profitability increased in 2004for all business segments : • Upstream ROACE increased to 35% from 29% in 2003. Recalculated using the reference environment20, 2004 ROACE was 21%. • Downstream ROACE increased to 25% from 15% in 2003. Recalculated using the reference environment(20), 2004 ROACE was 13%. • Chemicals ROACE increased to 8.5% from 3.5% in 2003. Excluding Arkema, the 2004 Chemicals ROACE would have been 10%. Recalculated using the reference environment20, ROACE was 8.5% in 2004 comparedto 7% in 2003. Return on equity in 2004 was 31% compared to 26% in 2003. The implementation of Total's strategy requires a sustained investment program.Based on an exchange rate of •/$ 1.25, the 2005 Capex budget is approximately 12B$, including 0.9 B$ for the proposed acquisition of a 25% stake in Novatek. The net-debt-to-equity ratio for the Group is targeted to remain at around 25%to 30%. Total intends to pursue a dynamic dividend policy with a target pay-out ratio of50% over the medium term. Since the beginning of 2005, the oil market environment has remained favorablewith high oil prices, refining margins that are still strong despite a retreatfrom the level of the fourth quarter, and an overall favorable environment forChemicals, although the dollar remains weak. To listen to the presentation to financial analysts by CEO Thierry Desmaresttoday at 11:00 (Paris time), please visit the Group's website www.total.com orcall +44 (0) 207 162 0185 from Europe or +1 334 323 6203 from the US (code:Total). For a replay, access the website or call +44 (0)207 031 4064 from Europeor +1 954 334 0342 from the US (access code 640 029). This document may contain forward-looking statements within the meaning of thePrivate Securities Litigation Reform Act of 1995 with respect to the financialcondition, results of operations, business, strategy and plans of Total. Suchstatements are based on a number of assumptions that could ultimately proveinaccurate, and are subject to a number of risk factors, including currencyfluctuations, the price of petroleum products, the ability to realize costreductions and operating efficiencies without unduly disrupting businessoperations, environmental regulatory considerations and general economic andbusiness conditions. The financial information contained in this document hasbeen prepared in accordance with French GAAP, and certain elements would differmaterially upon reconciliation to US GAAP. Total does not assume any obligationto update publicly any forward-looking statement, whether as a result of newinformation, future events or otherwise. Further information on factors whichcould affect the company's financial results is provided in documents filed bythe Group and its affiliates with the French Autorite des Marches Financiers andthe US Securities and Exchange Commission. The business segment information is presented in accordance with the Groupinternal reporting system used by the Chief operating decision maker to measureperformance and allocate resources internally. Due to their particular nature or significance, certain transactions qualifiedas "special items" are monitored at the Group level and excluded from thebusiness segment figures. In general, special items relate to transactions thatare significant, infrequent or unusual. However, in certain instances, certaintransactions such as restructuring costs or assets disposals, which are notconsidered to be representative of normal course of business, may be qualifiedas special items although they may have occurred within prior years or arelikely to recur within following years. Performance measures excluding specialitems such as operating income, net operating income and net income adjusted forspecial items, are meant to facilitate the analysis of the financial performanceand the comparison of income between periods. Cautionary Note to U.S. Investors - The United States Securities and ExchangeCommission permits oil and gas companies, in their filings with the SEC, todisclose only proved reserves that a company has demonstrated by actualproduction or conclusive formation tests to be economically and legallyproducible under existing economic and operating conditions. We use certainterms in this presentation, such as proved and probable reserves, that the SEC'sguidelines strictly prohibit us from including in filings with the SEC. U.S.Investors are urged to consider closely the disclosure in our Form 20-F, File Ndegrees 1-10888, available from us at 2, place de la Coupole - La Defense 6 -92078 Paris la Defense cedex - France. You can also obtain this form from theSEC by calling 1-800-SEC-0330. Main operating information by segment Fourth quarter and full year 2004 • Upstream 4Q04 4Q03 % Combined liquids and gas production 2004 2003 % by region (kboe/d) 858 891 -4% Europe 832 880 -5% 840 770 +9% Africa 813 723 +12% 37 56 -34% North America 61 59 +3% 255 232 +10% Far East 245 232 +6% 442 414 +7% Middle East 412 441 -7% 187 214 -13% South America 213 196 +9% 9 11 -18% Rest of world 9 8 +13% 2,628 2,588 +2% Total* 2,585 2,539 +2% * including production from consolidated subsidiaries of 2,253 kboe/d in 2004and 2,210 kboe/d in 2003 4Q04 4Q03 % Liquids production by region (kb/d) 2004 2003 % 442 458 -3% Europe 424 460 -8% 720 697 +3% Africa 730 646 +13% 2 4 -50% North America 16 4 x4 29 25 +16% Far East 31 25 +24% 382 361 +6% Middle East 357 388 -8% 100 141 -29% South America 128 130 -2% 9 11 -18% Rest of world 9 8 +13% 1,684 1,697 -1% Total* 1,695 1,661 +2% * including production from consolidated subsidiaries of 1,411 kb/d in 2004 and1,379 kb/d in 2003 4Q04 4Q03 % Gas production by region (Mcfd) 2004 2003 % 2,267 2,373 -4% Europe 2,218 2,286 -3% 640 371 +73% Africa 444 404 +10% 181 267 -32% North America 241 294 -18% 1,394 1,137 +23% Far East 1,224 1,156 +6% 324 297 +9% Middle East 293 283 +4% 517 420 +23% South America 474 363 +31% - - - Rest of world - - - 5,323 4,865 +9% Total* 4,894 4,786 +2% * including production from consolidated subsidiaries of 4,636 Mcfd in 2004 and4,540 Mcfd in 2003 • Downstream Refined product sales by region (kb/d) 2004 2003 % Europe 2,693 2,744 -2% Africa 306 282 +9% Americas 605 525 +15% Middle East 65 60 +8% Far East 73 29 +152% Rest of world 29 12 +142% Total 3,771 3,652 +3% * includes trading and share of Cepsa • Chemicals 4Q04 4Q03 % Key figures - Chemicals (B•) 2004 2003 % 5.25 4.34 +21% Sales 20.04 17.26 +16% 2.85 2.11 +35% • Base chemicals and polymers 10.30 7.91 +30% 0.91 0.83 +10% • Intermediates 3.71 3.60 +3% 1.50 1.40 +7% • Specialties 6.02 5.74 +5% (0.01) 0.00 ns • Corporate - Chemicals 0.01 0.01 - 0.43 0.16 +169% Operating income 1.09 0.56 +95% adjusted for special items 0.27 0.05 +440% • Base chemicals and polymers 0.49 0.10 +390% 0.04 0.02 +100% • Intermediates 0.14 0.13 +8% 0.12 0.12 - • Specialties 0.49 0.43 +14% 0.00 (0.03) ns • Corporate - Chemicals (0.03) (0.10) ns (1) adjusted net income = net income (Group share) adjusted for special itemsand excluding Total's equity share of amortization of goodwill and intangibleassets related to the Sanofi-Aventis merger (153 M• for the fourth quarter andfull year 2004) (2) dollar amounts represent euro accounts converted at the average •/$ exchangerate for the period (1.2977 dollars per euro in the fourth quarter 2004, 1.1891in the fourth quarter 2003, 1.2439 for the full year 2004, and 1.1312 for thefull year 2003) (3) percent change relative to the same 2003 period (4) net cash flow = cash flow from operating activities + divestments -investments (5) approximately 27% of Total's 2004 production was covered by productionsharing and buy-back contracts (6) ratio of changes in reserves excluding production (i.e. revisions,discoveries, extensions, acquisitions, sales of reserves) divided by production (7) (explorations costs + unproved property acquisition) / (revisions +discoveries, extensions of reserves) (8) (exploration and development costs + proved and unproved acquisitions) /(revisions + discoveries, extensions + acquisitions of reserves) (9) see disclaimer on page 16 (10) limited to proved and probable reserves covered by E&P contracts on fieldsthat have been drilled and for which technical studies have demonstratedeconomic development in a Brent 25 $/b environment (11) Total share, excluding trading (12) 1 Bm3/y = approx. 0.1 Bcfd (13) subject to market conditions and after informing/consulting with laborrepresentatives (14) this amount takes into account the fact that the change in the average gasprice realization between 2003 and 2004 was smaller than the change in theaverage liquids price realization ; in 2004, the average gas price increased by14% to 3.74 $/Mbtu while the average liquids price increased by 31% to 36.8 $/b (15) mainly on the valorization of products and the cost of feedstock (16) special items are shown in the table on page 3 (17) based on reference environment : Brent = 25 $/b ; TRCV = 15 $/t ; •/$ = 1.25 (18) ExxonMobil, BP, RD/Shell, ChevronTexaco (19) adjusted for special items and excluding Total's equity share ofamortization of goodwill and intangible assets related to the Sanofi-Aventismerger (20) Brent = 25 $/b ; TRCV = 15 $/t ; •/$ = 1.25 ; inventory at replacementcost. Downstream ROACE calculated in this reference environment is comparable tothe ROACE calculated in the former reference environment (TRCV = 12 $/t ; •/$ =1.10) This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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