Final Results
Total Fina Elf.
20 February 2003
2002 Hydrocarbon Production increases by 10%
Results show good resistance in a less favorable environment
2002 Net Income excluding non-recurring Items
* 6.26 billion euros, a 17% decrease
* 9.40 euros per share, a 13% decrease
* 8.89 dollars per share, an 8% decrease
2002 Reported Net Income
* 5.94 billion euros, a 22% decrease
* 8.92 euros per share, a 19% decrease
* 8.43 dollars per share, a 15% decrease
Proposed dividend of 4.10 euros per share, an 8% increase
Paris, February 20, 2003 - The Board of Directors of TotalFinaElf, chaired by
CEO Thierry Desmarest, met on February 19 to review the 2002 fourth quarter
results and to close the 2002 consolidated accounts and parent company accounts.
Commenting on the results, Thierry Desmarest said :
'Despite the generally less favorable 2002 environment, TotalFinaElf performed
well, partially offsetting the impact of the downturn thanks largely to a record
level 10% increase in hydrocarbon production and to the ongoing implementation
of synergy and productivity programs (...)
When we express our earnings per share excluding non-recurring items in dollars,
in order to be comparable to our peers, TotalFinaElf shows a decline of only 8%
year over year, while our major competitors reported decreases ranging between
22% and 34%'.
Consolidated accounts TotalFinaElf
4Q02 4Q01 % millions of euros 2002 2001 %
26,898 23,689 +14% Sales 102,540 105,318 -3%
2,894 2,506 +15% Operating income from business segments (excluding 10,995 13,121 -16%
non-recurring items)
1,461 1,364 +7% Net operating income from business segments (excluding 5,868 7,564 -22%
non-recurring items)
1,609 1,424 +13% Net income excluding non-recurring items 6,260 7,518 -17%
1,372 652 +110% Net income 5,941 7,658 -22%
2.44 2.11 +16% Earnings per share (euros) excluding non-recurring items 9.40 10.85 -13%
2,323 3,099 -25% Investments 8,657 10,566 -18%
800 1,711 -53% Divestments at selling price 2,313 7,004 -67%
2,233 1,409 +58% Cash flow from operating activities 11,006 12,303 -11%
Non-recurring Items
4Q02 4Q01 2002 2001
Impact of non-recurring items on operating income
(5) (24) Restructuring charges (29) (24)
(637)* (50) Impairments (659)* (50)
(38) (18) Other 29 (18)
(680) (92) Total (659) (92)
Impact of non-recurring items on net income
287 429 Gain on asset sales 626 1,400
87 (600) Toulouse plant impact (61) (600)
(81) (186) Restructuring charges and early retirement plans (158) (226)
(452)** (224) Impairments (467)** (224)
(78) (191) Other (259) (210)
(237) (772) Total (319) 140
* includes (500) MEuro related to the impact of the situation in Argentina
** Includes (310)MEuro related to the Impact of the situation In Argentina
Number of shares
4Q02 4Q01 % millions 2002 2001 %
658.4 676.1 -3% Fully-diluted weighted-average shares 666.1 693.2 -4%
655.0 673.0 -3% Fully-diluted shares at end of period 655.0 673.0 -3%
Oil market environment
4Q02 4Q01 % 2002 2001 %
1.00 0.90 -10%* Euro/$ 0.95 0.90 -5%*
26.8 19.4 +38% Brent ($/b) 25.0 24.4 +2%
16.1 14.7 +10% European refining margin TRCV ($/t) 8.0 15.4 -48%
* change in the dollar versus the euro
2002 Results
Consolidated sales declined by 3% to 102,540 million euros (MEuro) in 2002 from
105,318 MEuro In 2001.
Although the oil market environment was more favorable in the 2002 fourth
quarter than in the 2001 fourth quarter (a 38% increase in the Brent oil price
and a 10% increase in the European refining margin that more than offset the 10%
decline in the dollar versus the euro), market conditions for the full-year 2002
were less favorable than in the full-year 2001.
Oil market conditions in 2002 were mixed :
* the average Brent oil price rose slightly (+2%) to 25.0 $/b in 2002 from
24.4 $/b in 2001,
* the European refining margin was sharply lower in 2002, falling 48% to 8.0
$/t in 2002 from 15.4 $/t in 2001,
* the dollar weakened against the euro by 5%, setting the average euro/dollar
exchange rate at 0.95 in 2002 versus 0.90 in 2001.
In addition, after signs of improvement in mid-year, petrochemical
margins declined during the fourth quarter 2002.
Operating income from the business segments excluding non-recurring items rose
by 15% in the 2002 fourth quarter as compared to the same quarter a year ago,
and for the full year it fell by 16% to 10,995 MEuro in 2002 from 13,121 MEuro
in 2001.
Non-recurring items in 2002, comprised mainly of impairments in Argentina
related to gas and power assets and the LPG marketing activity, had a negative
impact on operating income of 659 MEuro.
Growth and synergies/productivity programs contributed 1.3 billion euros (BEuro)
to operating income in 2002, partially offsetting the large negative impact of
changes in the environment (-3.1 BEuro) and the effect of an unusually high
level of scheduled refinery turn-arounds particularly during the third and
fourth quarters of 2002 (-0.3 BEuro).
Net operating income from the business segments excluding non-recurring items
for the 2002 fourth quarter rose by 7% as compared to the same quarter a year
ago, and for the full year it fell by 22% to 5,868 MEuro in 2002 from 7,564
MEuro. The percentage decrease in net operating income is larger than the
percentage decrease in the pre-tax operating income due primarily to the fact
that the Upstream segment, which is more heavily taxed than Downstream and
Chemicals, increased its relative share of the operating results in 2002 versus
2001.
Net income excluding non-recurring items rose by 13% in the 2002 fourth quarter
as compared to the 2001 fourth quarter, and for the full year it fell by 17% to
6,260 MEuro in 2002 from 7,518 MEuro in 2001.
Earnings per share excluding non-recurring items, based on 658.4 million fully-
diluted weighted average shares, rose by 16% to 2.44 euros in the 2002 fourth
quarter as compared to 2.11 euros in the same quarter last year. For the full
year, earnings per share excluding non-recurring items, based on 666.1 million
fully-diluted weighted average shares, declined by 13% to 9.40 euros in 2002
from 10.85 euros in 2001. The limited decline in earnings per share reflects in
part the accretive impact of the large share buy-back program.
During the 2002 fourth quarter, TotalFinaElf repurchased 10.45 million of its
shares for 1.42 BEuro, bringing the total buy-back program for the year to
24.03(1) million shares, or 3.5% of the share capital, for 3.40 BEuro.
The number of fully-diluted shares was 655.0 million at December 31, 2002 versus
673.0 million at December 31,2001.
Reported net income more than doubled to 1,372 MEuro In the 2002 fourth quarter
from 652 MEuro in the 2001 fourth quarter. For the year, reported net income was
5,941 MEuro in 2002 compared to 7,658 MEuro in 2001.
Reported net income includes the impact of non-recurring items which had a net
negative effect of 319 MEuro In 2002 as compared to a net positive effect of 140
MEuro in 2001. Non-recurring items in 2002 were composed primarily of gains on
asset sales (notably shares of Sanofi-Synthelabo), impairments of certain gas
and power assets and LPG marketing activities in Argentina, and recognition of
the impact on deferred taxes from a change In the UK tax law affecting oil
companies.
The net-debt-to-equity ratio was 28.6% at year-end 2002 compared to 30.9% at
year-end 2001.
In 2002, the company's return on average capital employed (ROACE(2)) was 15%.
The return on equity (ROE) was at a high level of 20% in 2002.
Cash flow from operating activities decreased by 11% to 11,006 MEuro in 2002
from 12,303 MEuro in 2001.
Investments fell by 18% to 8,657 MEuro in 2002 from 10,566 MEuro in 2001,
reflecting lower spending in Upstream gas and power activities and in the
Chemicals segment.
Divestments, based on selling prices, were 2,313 MEuro in 2002, comprised mainly
of sales of securities (notably Sanofi-Synthelabo and other financial
participations) as well as reimbursements of long-term loans.
Free cash flow(3) was 4,662 MEuro in 2002 compared to 8,741 MEuro In 2001.
(1) includes 2.91 million shares used to cover stock option programs.
(2) To be more comparable to its peer group, TotalFinaElf has changed to
presenting a return on average capital employed (ROACE) which is net
operating income (excluding non-recurring items and before amortization of
goodwill for Chemicals) divided by the average of the beginning and ending
capital employed, and will no longer present on the basis of return on
beginning of year capital employed. This ratio will be presented for the
business segments and at the Group level.
(3) Free cash flow - cash flow from operations - divestments - investments
Upstream
Operating income excluding non-recurring items from the Upstream segment rose by
3% to 9,309 MEuro in 2002 from 9,022 MEuro in 2001. The positive effects of a
large increase in production volume and the higher oil price were partially
offset by the negative impacts of the dollar depreciating against the euro and
lower natural gas prices.
Net operating income excluding non-recurring items
for the Upstream segment was stable at 4,648 MEuro in 2002 compared to 4,652
MEuro in 2001. Relative to the year-over-year increase in operating income
excluding non-recurring items, the flat net operating income reflects the
impacts of lower capitalized interest due to a number of start-ups and lower
income contributions from equity affiliates.
Upstream ROACE was 23% in 2002.
During the 2002 fourth quarter, hydrocarbon production rose by 8% to 2,523
thousand barrels of oil equivalent per day (kboe/d) from 2,332 kboe/d in the
2001 fourth quarter.
Hydrocarbon production increased by 10% to 2,416 kboe/d for the full year 2002
compared to 2,197 kboe/d for 2001. Excluding the impact of OPEC quota
reductions, production growth would have been 11.5% in 2002.
Liquids production rose by 9% to 1,589 kb/d in 2002 from 1,454 kb/d in 2001,
driven primarily by growth from Block 17 in Angola, Sincor in Venezuela, South
Pars and Dorood in Iran, and various fields in the UK North Sea.
Gas production increased by 12% to 4,532 Mcfd in 2002 from 4,061 Mcfd in 2001,
driven primarily by growth from Elgin-Franklin and Nuggets in the UK North Sea
and new fields launched in Norway and Syria.
Driven by a sustained exploration and appraisal program, proved reserves
continued to grow, rising 2% to 11,203 Mboe at year-end 2002 from 10,978 Mboe at
year-end 2001. The 2002 proved reserves represent 12.7 years of production based
on the average rate for 2002. For consolidated subsidiaries, the 2000-2002 3-
year average reserve replacement rate was very competitive at 151%.
The 2000-2002 3-year average reserve replacement cost for consolidated
subsidiaries was 4.0 $/boe and finding costs were 0.7 $/boe.
The main discoveries in 2002 were made in deep-offshore West Africa (Nigeria and
Angola, including Zinia in the 2002 fourth quarter), in the North Sea and in
Kazakhstan (Kalamkas).
Major 2002 highlights included the build-up of production from South Pars in
Iran, Girassol in Angola, Elgin-Franklin in the UK North Sea, and the Sincor
upgrader in Venezuela. The Sincor upgrader is in the process of restarting
operations after having been idled for 10 weeks by a strike in Venezuela.
Other highlights for the year included the approval of the Snohvit project by
the Norwegian Parliament, the acquisition of 5% of the BTC pipeline project as
well as the acquisition of several permits in Russia.
Gas and power activities in Argentina were the object of a 431 MEuro asset
impairment in 2002; however, the operational highlight of the year was launching
the Taweelah power project in Abu Dhabi.
For renewable energies, new developments included a solar power project in
Morocco and the start of a wind energy project at the Dunkirk refinery site in
France.
4Q02 4Q01 % Upstream - Key Figures 2002 2001 %
2,523 2,332 +8% Hydrocarbon production 2,416 2,197 +10%
(kboe/d)
1,617 1,543 +5% • Liquids (kb/d) 1,589 1,454 +9%
4,960 4,297 +15% • Gas (Mcfd) 4,532 4,061 +12%
2,520 1,617 +56% Operating income (MEuro) 9,309 9,022 +3%
excluding non-recurring items
1,196 717 +67% Net operating income (MEuro) 4,648 4,652 -
excluding non-recurring items
1,493 2,210 -32% Investments (MEuro) 6,122 7,496 -18%
133 344 -61% Divestments (MEuro) at selling 603 1,116 -46%
price
2,110 1,969 +7% Cash flow from operating 7,721 8,085 -5%
activities (MEuro)
Proved reserve at year-end 2002 2001 %
Hydrocarbon reserves (Mboe) 11,203 10,978 +2%
• Liquids (Mb) 7,231 6,961 +4%
• Gas (Bcf) 21,575 21,929 -2%
Downstream
Operating income excluding non-recurring items from the Downstream segment fell
by 70% to 909 MEuro in 2002 from 3,004 MEuro in 2001.
Refined product demand in the OECD countries declined due to weak economic
conditions and mild weather during 2002, thus creating an exceptionally poor
environment for the Downstream segment: European refining margins fell by 48%
and marketing margins were under pressure given the context of high crude oil
prices.
Downstream results were further affected by an unusually high level of scheduled
refinery turn-arounds: 7 of the 12 refineries operated by TotalFinaElf in Europe
were affected, mainly in the third and fourth quarters of 2002.
Synergies and productivity efforts had a positive impact of about 0.2 BEuro on
operating income which only partially offset the negative impact of the
environment and the refinery turn-arounds.
Net operating income excluding non-recurring items for the Downstream segment
fell by 63% to 846 MEuro in 2002 from 2,309 MEuro in 2001.
Within this context, Downstream ROACE was 8% in 2002.
Taking into account the refinery turn-arounds, refinery throughput fell by 8% to
2,218 kb/d in the 2002 fourth quarter from 2,406 kb/d in the 2001 fourth
quarter. For the full year, refinery throughput fell by 5% to 2,349 kb/d in 2002
from 2,465 kb/d in 2001, and the utilization rate fell to 88% in 2002 from 96%
in 2001.
Refined product sales were up slightly to 3,751 kb/d in 2002 from 3,724 kb/d in
2001.
In refining, the main highlights for 2002 concerned the major turn-arounds that
improved the safety and reliability of the units as well as increased the
conversion and desulphurization rates.
In marketing, a new market segmentation strategy was implemented in France in
2002, using the TOTAL brand (focused on the service-sensitive market segment)
and the redesigned Elf brand (focused on the price-sensitive market segment).
Outside of France, an agreement in principle was reached with Agip and Galp
under which TotalFinaElf will dispose of its TOTAL-brand service stations in
Spain and acquire stations in italy and Portugal.
TotalFinaElf sold its service station network in Switzerland, where its market
share was less than 3%.
4Q02 4Q01 % Downstream - Key Figures 2002 2001 %
2,218 2,406 -8% Refinery throughput*(kb/d) 2,349 2,465 -5%
229 628 -64% Operating income (M€)
excluding non-recurring items 909 3,004 -70%
244 469 -48% Net operating income (M€)
excluding non-recurring items 846 2,309 -63%
465 356 +31% Investments (M€) 1,112 1,180 -6%
114 54 +111% Divestments (M€) at selling price 283 1,079 -74%
(188) 2,217 - Cash flow from operating
activities (M€) 1,447 4,374 -67%
* including share of Cepsa
Chemicals
Sales for the Chemicals segment were stable at 19,317 MEuro in 2002 compared to
19,560 MEuro in 2001.
Operating income excluding non-recurring items fell by 29% to 777 MEuro in 2002
from 1,095 MEuro in 2001.
The environment for Chemicals had a negative impact of about 0.4 BEuro on
operating income for the year.
Operating income for the Base chemicals & polymers sector was affected by a
particularly depressed environment in the ethylene/polyethylene chain as well as
in the chlorine chain.
Intermediates resisted the difficult economic conditions. Specialties improved
their performance.
Net operating income excluding non-recurring items fell by 38% to 374 MEuro in
2002 from 603 MEuro in 2001.
Chemicals ROACE was 5%(4) in 2002.
The main 2002 highlights for the Base chemicals & polymers sector were the
signing of a letter of intent with Samsung for a 50% interest in its Daesan
petrochemical complex in South Korea, the launching a new polypropylene unit at
Feluy in Belgium and the purchase of Enichem's interest in Qapco in Qatar.
(4)excluding amortization of goodwill in the amount of 131 MEuro in 2002
TotalFinaElf actively managed its portfolio of intermediates and Specialties.
Telomeres fluorides were sold and the sale of the SigmaKalon paints unit was
initiated with a closing expected during the first quarter 2003 after approval
from the competition authorities.
4Q02 4Q01 % Chemicals - key figures(MEuro) 2002 2001 %
4,587 4,207 +9% Sales 19,317 19,560 -1%
145 261 -44% Operating income excluding
non-recurring items 777 1,095 -29%
21 178 -88% Net operating income excluding
non-recurring items 374 603 -38%
371 528 -30% Investments 1,237 1,611 -23%
37 225 -84% Divestments at selling price 140 541 -74%
636 369 +72% Cash flow from activities
operating activities 1,053 1,261 -16%
Parent company TOTAL FINA ELF S.A. accounts and proposed dividend
The parent company TOTAL FINA ELF reported earnings of 2,410 MEuro in 2002
compared to 3,829 MEuro in 2001. The Board of Directors of TotalFinaElf, after
closing the accounts, decided to propose at the May 6, 2003 Annual General
Meeting (AGM) a cash dividend of 4.10 euros per share, representing an 8%
increase from the previous year, to which will be added the avoir fiscal (French
tax credit) pursuant to the terms in force. The dividend will be paid May 16,
2003.
2003 Sensitivities
Change 2003(e) Sensitivities*
Operating Income Net Income EPS(5)
Euro/$ +/- 0.1 $ per Euro 1.10BEuro 0.57 BEuro 0.87 Euro
Brent +/- 1 $ per barrel 0.54 BEuro 0.26 BEuro 0.40 Euro
Refining
margin +/- 1 $ per ton 0.11 BEuro 0.07 BEuro 0.11Euro
(TRCV)
* sensitivities based on an environment of Euro/$ ' 1, Brent - 20 $/b, TRCV - 12
$/t
Outlook
Given the uncertainties related to events in the Middle East, it is difficult to
predict trends for the 2003 oil market environment.
Since the start of the year, oil prices have remained at high levels. Refining
margins have recently rebounded sharply. The dollar has lost ground against the
euro, and petrochemicals continued to suffer low margins given the high price of
naphtha feedstock.
(5) based on 655.0 M fully-diluted shares at December 31, 2002
Within this context, TotalFinaElf plans to maintain an investment program of 8.7
billion euros, with priority given to Upstream growth. The 2003 budget for
investments is split 67% for Upstream, 15% for Downstream and 18% for Chemicals
(including the Samsung JV project).
TotalFinaElf plans to continue to improve its performance in 2003 (assuming a
constant environment):
* Upstream production is expected to grow by 5%,
* Downstream projects a 300 MEuro operating income improvement from ongoing
synergies and productivity efforts,
* Chemicals will pursue self-help programs, restructurings and active
portfolio management.
The target to improve operating income by 4.8 BEuro on an annual basis by the
end of the 2000-2003 period is confirmed, assuming a constant environment.
Over the medium term, the target for hydrocarbon production is to average 5%
growth per year through 2007.
In addition, the following 2005 targets for return on average capital employed
(ROACE(6)) have been set: Upstream 16%(7), Downstream 16% and Chemicals 14%(8).
For the Group as a whole, the 2005 ROACE target is 15.5%.
The net-debt-to-equity ratio is expected to be maintained at around 30%, and the
buy-back program is expected to continue.
In setting demanding but realistic medium-term targets for growth and
profitability, the Group mobilizes the talents and energy of its people to
achieve profitable and sustainable growth.
To listen to the presentation to financial analysts by CE0 Thierry Desmarest
today et 11:00 (Paris time), please consult the website www.totalfinaelf.com for
information or dial +44 (0) 208 240 8240 from Europe or 1 303 713 7929 from the
US. For a replay, please dial +44 (0) 208 288 4459 (access code: 228 072) from
Europe or 1 334 323 6222 (access code: 228 072) from the US.
This document may contain forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 with respect to the financial
condition, results of operations, business, strategy and plans of TotalFinaElf.
Such statements are based on a number of assumptions that could ultimately prove
inaccurate, and are subject to a number of risk factors, including currency
fluctuations, the price of petroleum products, the ability to realize cost
reductions and operating efficiencies without unduly disrupting business
operations, environmental regulatory considerations and general economic and
business conditions. The financial information contained in this document has
been prepared in accordance with French GAAP, and certain elements would differ
materially upon reconciliation to US GAAP. TotalFinaElf does not assume any
obligation to update publicly any forward-looking statement, whether as a result
of new information, future events or otherwise. Further information on factors
which could affect the company's financial results is provided in documents
filed by the Group and its affiliates with the French Commission des Operations
de Bourse and the US Securities and Exchange Commission.
TotalFinaElf reports the impact on income of non-recurring items, consisting of
incomes and charges for the period, which are unusual or significant in nature.
Items from incomes from business segments excluding non-recurring items, and net
income per share excluding non-recurring items, presented in financial
communications (operating income from business segments excluding non-recurring
items, net operating income from business segments excluding non-recurring items
and net income excluding non-recurring items) and in the footnotes to the
financial statements of the Group containing segment data are non-GAAP measures
obtained by excluding the non-recurring items described above from the GAAP
figures. They are presented in order to facilitate the analysis of financial
performance and the comparison of income between periods.
(6) in the reference environment : Euro/$ = 1 : Brent = 17$/b TRCV = 12$/t:
Chemicals in mid-cycle
(7) this target takes into account the impact of the change in UK taxes and the
situation in Argentina
(8) excluding amortization of goodwill
Operating Information by Segment
Fourth Quarter and Full Year 2002
4Q02 4Q01 % 2002 2001 %
939 850 +10% Europe 873 759 +15%
689 637 +8% Africa 671 620 +8%
54 48 +13% North America 45 49 -8%
220 209 +5% Far East 220 219 -
452 398 +14% Middle East 432 391 +10%
165 183 -10% South America 170 153 +11%
4 7 * Rest of world 5 6 -
2,523 2,332 +8% Total production* 2,416 2,197 +10%
* includes 2,137 kboe/d consolidated production in 2002 and 1,897 kboe/d in 2001
Liquids production by region
4Q02 4Q01 % 2002 2001 %
492 458 +7% Europe 464 417 +11%
611 563 +9% Africa 599 549 +9%
4 7 - North America 5 7 -
23 13 +77% Far East 23 24 -4%
365 357 +2% Middle East 377 349 +8%
118 138 -14% South America 116 102 +14%
4 7 - Rest of world 5 6 -
1,617 1,543 +5% Total production* 1,589 1,454 +9%
* includes 1,354 kb/d consolidated production in 2002 and 1,196 kb/d in 2001
Gas production by region
4Q02 4Q01 % In Mcfd 2002 2001 %
2,432 2,108 +15% Europe 2,230 1,852 +20%
410 391 +5% Africa 374 369 +1%
264 216 +22% North America 214 221 -3%
1,117 1,088 +3% Far East 1,122 1,114 +1%
482 227 +112% Middle East 295 222 +33%
255 267 -4% South America 297 283 +5%
* * * Rest of world * * *
4,960 4,297 +15% Total production* 4,532 4,061 +12%
* includes 4,299 Mcfd consolidated production in 2002 and 3,839 Mcfd in 2001
Downstream
Refinery throughput by region
4Q02 4Q01 % in kb/d 2002 2001 %
883 1,050 -16% France 911 1,037 -12%
1,054 1,100 -4% Rest of Europe 1,157 1,158 -
281 256 +10% Rest of world 281 270 +4%
2,218 2,406 -8% Total 2,349 2,465 -5%
throughput*
* includes share of Cepsa
Refined product sales by region*
in kb/d 2002 2001 %
Europe 2,975 3,026 -2%
Africa 269 249 +8%
Americas 366 320 +14%
Middle East 59 54 +9%
Asia 67 61 +10%
Rest of World 15 14 +7%
Total refined product sales 3,751 3,724 +1%
* includes trading and share of Cepsa
Chemicals
4Q02 4Q01 Chemicals - key figures (BEuro) 2002 2001 %
4.59 4.21 +9% Chemical Sales 19.32 19.56 -1%
1.94 1.54 +26% • Base chemicals & polymers 7.72 7.57 +2%
0.85 0.91 -7% • Intermediates 3.77 4.17 -10%
1.79 1.75 +2% • Specialties 7.80 7.77 -
0.01 0.01 - • Corporate - Chemicals 0.03 0.05 -40%
0.15 0.26 -42% Operating income* 0.78 1.10 -29%
(0.03) 0.07 * • Base chemicals & polymers (0.03) 0.25 -
0.04 0.04 * • Intermediates 0.28 0.33 -15%
0.13 0.09 +44% • Specialties 0.60 0.50 +20%
0.01 0.06 -83% • Corporate - Chemicals (0.07) 0.02 -
* excluding non-recurring items
TotalFinaElf accounts
4th quarter and full year 2002 consolidated accounts, French GAAP
Consolidated Statement of Income
4th Quarter 2002 4th Quarter 2001 In millions of Euros(1) 2002 2001
26,898 23,689 Sales Operating 102,540 105,318
(22,817) (20,024) Operating expenses (86,622) (87,760)
(1,915) (1,346) Depreciation, depletion (5,792) (4,781)
and amortization
Operating income
(48) (95) Corporate (210) (252)
2,214 2,414 Business segments* 10,336 13,029
2,166 2,319 Total operating income 10,126 12,777
(68) 18 Interest expense, net (195) (184)
51 48 Dividend income from 170 159
non-consolidated subsidiaries
(2) (3) Dividends on subsidiaries' (10) (19)
redeemable preferred shares
143 (947) Other income (expense) 243 283
(1,150) (826) Provision for income taxes (5,034) (5,874)
222 259 Equity in income (loss) of
affiliates 866 1,001
1,362 868 Income before amortization of
acquisition goodwill 6,166 8,143
(94) (195) Amortization of acquisition
goodwill (212) (319)
1,268 673 Consolidated Net income 5,954 7,824
(104) 21 of which minority interest 13 166
1,372 652 NET INCOME ** 5,941 7,658
2.08 0.96 Earnings per share
(euros)*** 8.92 11.05
2,894 2,506 *Operating income from 10,995 13,121
business segments, excluding
non-recurring items
1,461 1,364 Net operating income from 5,868 7,564
business segments, excluding
non-recurring items
1,609 1,424 **Net income (Group share), 6,260 7,518
excluding non-recurring
items
2.44 2.11 ***Earnings per share, 9.40 10.85
excluding non-recurring
items (euros)
(1) except earnings per share
CONSOLIDATED BALANCE SHEET
In millions of euros
Dec 31, 2002 Sept. 30, 2002 Dec 31, 2001
ASSETS
NON-CURRENT ASSETS
Intangible assets, net 2,752 3,001 3,196
Property, plant and equipment,
net 38,592 39,972 41,274
Equity affiliates : investments and
loans 7,710 7,833 7,592
Other investments 1,221 1,241 1,536
Other non-current assets 3,735 3,130 3,042
TOTAL NON-CURRENT ASSETS 54,010 55,177 56,640
CURRENT ASSETS
Inventories, net 6,515 6,366 6,622
Accounts receivable, net 13,087 13,117 13,497
Prepaid expenses and other 5,243 5,794 7,263
current assets
Short-term investments 1,508 1,426 1,004
Cash and cash equivalents 4,966 10,789 3,574
TOTAL CURRENT ASSETS 31,319 37,492 31,960
TOTAL ASSETS 85,329 92,669 88,600
LIABILITIES AND SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY
Common shares 6,872 7,103 7,059
Paid-in surplus and retained 30,514 33,004 30,544
earnings
Cumulative translation adjustment (830) (102) 1,252
adjustment
Treasury shares (4,410) (6,451) (4,923)
TOTAL SHAREHOLDERS' EQUITY 32,146 33,554 33,932
SUBSIDIARIES' REDEEMABLE 477 507 567
PREFERRED SHARES
MINORITY INTEREST 724 837 898
LONG-TERM LIABILITIES
Deferred income taxes 6,390 6,586 6,521
Employee benefits 4,103 3,231 3,355
Other liabilities 6,150 5,957 6,093
TOTAL LONG-TERM LIABILITIES 16,643 15,774 15,969
LONG-TERM DEBT 10,157 10,989 11,165
CURRENT LIABILITIES
Accounts payable 10,236 9,303 10,034
Other creditors and accrued 9,850 11,942 12,470
liabilities
Short-term borrowings and bank 5,096 9,763 3,565
overdrafts
TOTAL CURRENT LIABILITIES 25,182 31,008 26,069
TOTAL LIABILITIES AND 85,329 92,669 88,600
SHAREHOLDERS' EQUITY
CONSOLIDATED STATEMENT OF CASH FLOW
TotalFinaElf
4th Quarter 4th Quarter
2002 2001 in millions of euros 2002 2001
CASH FLOW FROM OPERATING ACTIVITIES
1,268 673 Consolidated net income 5,954 7,824
2,080 1,685 Depreciation, depletion and amortization 6,241 5,390
(154) 690 Long-term liabilities, valuation allowances
and deferred taxes (264) 1,153
- (449) Impact of coverage of pension benefit plans - (449)
165 168 Unsuccessful exploration costs 487 571
(358) (363) (Gains)/Losses on sales of assets (862) (1,735)
(167) (242) Equity in income of affiliates
(in excess of)/less than dividends received (479) (709)
1 1 Other changes, net (7) (56)
2,835 2,163 Cash flow from operating activities before
changes in working capital 11,070 11,989
(602) (754) (increase)/ Decrease in operating assets
and liabilities (64) 314
2,233 1,409 CASH FLOW FROM OPERATING ACTIVITIES 11,006 12,303
CASH FLOW FROM INVESTING ACTIVITIES
(1,974) (2,483) Intangible assets and property, plant and
equipment additions (6,942) (7,517)
(146) (164) Exploration expenditures charged to expenses (432) (521)
(22) (168) Acquisitions of subsidiaries, net of cash acquired (127) (1,051)
(46) (12) Investments in equity affiliates and other securities (298) (539)
(135) (272) Increase in long-term loans (858) (938)
(2,323) (3,099) Total expenditures (8,657) (10,566)
Proceeds from sale of intangible assets and
property, plant and
124 86 equipment 290 409
(8) (32) Proceeds from sale of subsidiaries, net of cash sold 5 721
543 1,098 Proceeds from sale of non-current investments 1,346 4,634
141 559 Repayment of long-term loans 672 1,240
800 1,711 Total divestitures 2,313 7,004
(83) 6 (increase) / Decrease in short-term investments (505) (428)
(1,606) (1,382) CASH FLOW FROM INVESTING ACTIVITIES (6,849) (3,990)
CASH FLOW FROM FINANCING ACTIVITIES
Issuance and repayment of shares
14 9 Parent company's shareholders 461 24
(1,417) (1,930) Share buy-back (2,945) (5,605)
7 12 Minority shareholders 32 12
- - Subsidiaries' redeemable preferred shares - -
Cash dividends paid:
- - Parent company's shareholders (2,514) (2,278)
(7) (26) Minority shareholders (100) (151)
455 (148) Net issuance / (repayment) of long-term debt 1,642 (185)
(5,271) (4,617) Increase /(Decrease) in short-term borrowings
and bank overdrafts 746 (1,330)
(2) (3) Other changes, net (10) (19)
(6,221) (6,703) CASH FLOW FROM FINANCING ACTIVITIES (2,688) (9,532)
(5,594) (6,676) NET INCREASE /(DECREASE) IN CASH AND CASH
EQUIVALENTS 1,469 (1,219)
(229) (16) Effect of exchange rates and changes in reporting
entity on cash and cash equivalents (77) 193
10,789 10,266 Cash and cash equivalents at the beginning of the
period 3,574 4,600
4,966 3,574 CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 4,966 3,574
BUSINESS SEGMENTS INFORMATION
TotalFinaElf
in millions of euros
4th Quarter 2002 Upstream Downstream Chemicals Corporate Intercompany Total
(excluding non-recurring items)
Non-Group sales 4,381 17,930 4,587 - - 26,898
Intersegment sales 2,860 441 73 36 (3,410) -
Total sales 7,241 18,371 4,660 36 (3,410) 26,898
Depreciation, depletion and amortization of
tangible assets (836) (217) (213) (12) (1,278)
Operating income excluding non-recurring items 2,520 229 145 (48) 2,846
Amortization of intangible assets and
acquisition goodwill (108)
Equity in income (loss) of affiliates 222
Other items in net operating income 91
Tax on net operating income (1,351)
Net operating income excluding non-recurring
items 1,196 244 21 239 1,700
Net cost of net debt (59)
Dividends on subsidiaries' redeemable preferred
shares (2)
Minority interests (30)
Net income excluding non-recurring item 1,609
Gross expenditures 1,493 465 371 (6) 2,323
Divestitures at selling price 133 114 37 516 800
Cash flow from operating activities 2,210 (188) 636 (325) 2,233
4th Quarter 2001 Upstream Downstream Chemicals Corporate Intercompany Total
(excluding non-recurring items)
Non-Group sales 3,677 15,807 4,207 (2) - 23,689
lntersegment sales 2,851 226 80 24 (3,181) -
Total sales 6,528 16,033 4,287 22 (3,181) 23,689
Depreciation, depletion and amortization of
tangible assets (846) (247) (186) (3) (1,282)
Operating income excluding non-recurring items 1,617 628 261 (95) 2,411
Amortization of intangible assets and
acquisition goodwill (115)
Equity in income (loss) of affiliates 259
Other items in net operating income 266
Tax on net operating income (1,302)
Net operating income excluding non-recurring
items 717 469 178 155 1,519
Net cost of net debt (47)
Dividends on subsidiaries' redeemable preferred
shares (3)
Minority interests (45)
Net income excluding non-recurring items 1,424
Gross expenditures 2,210 356 528 5 3,099
Divestitures at selling price 344 54 225 1,088 1,711
Cash flow from operating activities 1,969 2,217 369 (3,146) 1,409
BUSINESS SEGMENTS INFORMATION
TotalFinaElf
in millions of euros
2002 Upstream Downstream Chemicals Corporate Intercompany Total
(excluding non-recurring items)
Non-Group sales 16,225 66,984 19,317 14 - 102,540
Intersegment sales 11,525 2,002 355 117 (13,999) -
Total sales 27,750 68,986 19,672 131 (13,999) 102,540
Depreciation, depletion and amortization
of tangible assets (3,362) (896) (826) (49) (5,133)
Operating income excluding non-recurring
items 9,309 909 777 (210) 10,785
Amortization of intangible assets and
acquisition goodwill (21) (99) (217) (18) (355)
Equity in income (loss) of affiliates 234 214 6 412 866
Other items in net operating income 189 61 40 157 447
Tax on net operating income (5,063) (239) (232) 429 (5,105)
Net operating income excluding non-recurring
items 4,648 846 374 770 6,638
Net cost of net debt (196)
Dividends on subsidiaries' redeemable preferred
shares (10)
Minority interests (172)
Net income excluding non-recurring items 6,260
Gross expenditures 6,122 1,112 1,237 186 8,657
Divestitures at selling price 603 283 140 1,287 2,313
Cash flow from operating activities 7,721 1,447 1,053 785 11,006
Balance sheet as of December 31, 2002
Property, plant and equipment, net 25,189 7,061 6,047 295 38,592
Intangible assets, net 264 473 1,940 75 2,752
Investments in equity affiliates 1,409 1,431 328 3,466 6,634
Total non-current assets 29,109 10,341 9,279 5,281 54,010
Capital employed 18,998 10,207 9,341* 3,580 42,126
2001 Upstream Downstream Chemicals Corporate Intercompany Total
(excluding non-recurring items)
Non-Group sales 14,365 71,373 19,560 20 - 105,318
Intersegment sales 12,572 1,912 406 95 (14,985) -
Total sales 26,937 73,285 19,966 115 (14,985) 105,318
Depreciation, depletion and amortization of
tangible assets (2,944) (948) (790) (35) (4,717)
Operating income excluding non-recurring items 9,022 3,004 1,095 (252) 12,869
Amortization of intangible assets and
acquisition goodwill (16) (92) (217) (9) (334)
Equity in income (loss) of affiliates 330 204 15 452 1,001
Other items in net operating income 441 138 54 107 740
Tax on net operating income (5,125) (945) (344) 231 (6,183)
Net operating income excluding non-recurring
items 4,652 2,309 603 529 8,093
Net cost of net debt (366)
Dividends on subsidiaries' redeemable preferred
shares (19)
Minority interests (190)
Net income excluding non-recurring items 7,518
Gross expenditures 7,496 1,180 1,611 279 10,566
Divestitures at selling price 1,116 1,079 541 4,268 7,004
Cash flow from operating activities 8,085 4,374 1,261 (1,417) 12,303
Balance sheet as of December 31, 2002
Property, plant and equipment, net 26,835 7,602 6,547 290 41,274
Intangible assets, net 390 538 2,243 25 3,196
Investments in equity affiliates 1,523 1,305 230 3,416 6,474
Total non-current assets 31,072 10,875 9,996 4,697 56,640
Capital employed 20,839 10,995 10,552* 3,163 45,549
*after taking into account a contingency reserve related to Toulouse-AZF plant
explosion of 995 million euro (pre-tax) in 2002 and 941 million euro (pre-tax)
in 2001
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