3rd Quarter Results
TOTAL
Paris, November 5, 2008
Third quarter 2008 results
Main results(1-2)
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-- Third quarter adjusted net income(3) 4.1 billion euros +35%
6.1 billion dollars +48%
1.81 euros per share +37%
2.73 dollars per share +50%
-- First nine months adjusted net income 11.0 billion euros +21%
16.8 billion dollars +37%
-- First nine months net income (Group share) 11.4 billion euros +19%
*T
Highlights since the beginning of the third quarter 2008
-- Third quarter 2008 Upstream production of 2,231 kboe/d, a decrease of 5%
or 2.5% excluding the price effect(1)
-- Contribution from new projects, such as Dolphin, Moho Bilondo and Jura
-- Large negative impacts this quarter related to additional security
issues in Nigeria and technical incidents in Libya and the North Sea
-- Launched a project to increase capacity on OML 58 in Nigeria
-- Major success delineating the West Franklin field in the UK North Sea
increased production potential to 45 kboe/d from 20 kboe/d and resources
to 200 Mboe from 80 Mboe with a development using existing
infrastructure
-- New discoveries in Australia in the Browse Basin, north of Ichthys, in
Angola on Block 15/06, in Norway and in Brunei
-- Added exploration acreage in Yemen, Bolivia and in the Gulf of Mexico
-- Acquired Goal Petroleum and started up the K5F field in the Netherlands
-- Strengthened position in heavy oil to prepare for the long term by
acquiring Synenco in Canada and a 60% interest in Madagascar's giant
Bemolanga field
-- Signed agreements with national oil companies in Syria and Libya
strengthening the long-term presence of Total in these countries
-- Developing new sources of energy : approved investment to double
Photovoltech's production capacity for solar cells and started
production of a « methanol to olefins » pilot project at Feluy in
Belgium
-- Announced the 2008 interim dividend of 1.14 EUR per share
-- An increase of 14%(1), in line with Total's competitive dividend growth
policy
The Board of Directors of Total, led by Chairman Thierry Desmarest, met on
November 4, 2008 and reviewed the third quarter 2008 accounts.
Adjusted net income rose to 4,070 million euros (MEUR ), an increase of 35%
compared to the third quarter 2007 and 9% compared to the second quarter 2008.
Commenting on the results, CEO Christophe de Margerie said :
« After reaching close to 150 dollars per barrel in July, the price of Brent
suffered a severe correction and settled to an average price for the quarter of
115 dollars per barrel. The decrease in the price of oil accelerated in the
month of October, mainly due to concerns about the global economy. Refining
margins in Europe hit high levels and petrochemical margins recovered,
benefiting from the decrease in the price of naphtha during the quarter. At the
same time, the dollar appreciated relative to the euro.
In this very high price environment, Total's adjusted fully-diluted earnings per
share expressed in dollars increased by 50% compared to the third quarter 2007
and 6% compared to the previous quarter. Cash flow expressed in dollars
increased by 126% and the net-debt-to-equity ratio was reduced to 15%.
Profitability of the business segments was 29.5%.
This performance demonstrates once again the quality of Total's integrated
portfolio. This quarter the Upstream benefited from high oil and gas prices.
However, the contribution of new production from Jura in the North Sea and Moho
Bilondo in Congo were unable to offset the price effect, the impacts of
technical problems in Libya and in the North Sea, production outages related to
additional security problems in Nigeria, and the normal decline on producing
fields. Downstream and Chemicals also benefited from a favorable environment
despite a decrease in demand linked to global economic conditions and continued
to implement self-help programs.
The 14% increase in the 2008 interim dividend announced at the beginning of
September demonstrates the confidence of the Group in its strategy. Total
confirms its ability to pursue a policy of competitive dividend growth even in a
less favorable environment.
For the future, the Group can rely on its strong balance sheet, a cost base that
is among the lowest in the industry and its strict management discipline. The
many strengths of Total allow it to pursue its strategy for growth and to
continue to create value for all of its stakeholders. »
-- Key figures and consolidated accounts of Total(4)
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3Q08 in millions of euros 9M08
3Q08 2Q08 3Q07 vs except earnings per share and number of shares vs
3Q07 9M08 9M07 9M07
-------- --------- -------- -------- ------------------------------------------------------ ----------- --------- ------
48,849 48,200 39,430 +24% Sales 141,262 115,567 +22%
-------- --------- -------- -------- ------------------------------------------------------ ----------- --------- ------
8,083 7,786 5,770 +40% Adjusted operating income from business segments 22,988 17,255 +33%
-------- --------- -------- -------- ------------------------------------------------------ ----------- --------- ------
4,063 3,756 3,000 +35% Adjusted net operating income from business segments 11,019 9,029 +22%
-------- --------- -------- -------- ------------------------------------------------------ ----------- --------- ------
2,899 3,099 2,227 +30% = Upstream 8,729 6,280 +39%
901 587 526 +71% = Downstream 1,799 1,989 -10%
263 70 247 +6% = Chemicals 491 760 -35%
-------- --------- -------- -------- ------------------------------------------------------ ----------- --------- ------
4,070 3,723 3,004 +35% Adjusted net income 11,047 9,096 +21%
-------- --------- -------- -------- ------------------------------------------------------ ----------- --------- ------
1.81 1.65 1.32 +37% Adjusted fully-diluted earnings per share (euros) 4.91 3.99 +23%
-------- --------- -------- -------- ------------------------------------------------------ ----------- --------- ------
2,244.3 2,252.9 2,272.6 -1% Fully-diluted weighted-average shares (millions) 2,250.4 2,277.3 -1%
-------- --------- -------- -------- ------------------------------------------------------ ----------- --------- ------
3,050 4,732 3,121 -2% Net income (Group share) 11,384 9,581 +19%
------------------------------------------------------------------------------------------------------------------------
3,371 2,868 2,590 +30% Investments 8,882 7,694 +15%
------------------------------------------------------------------------------------------------------------------------
718 726 109 x6.6 Divestments 1,642 575 +186%
------------------------------------------------------------------------------------------------------------------------
7,338 1,922 3,549 +107% Cash flow from operating activities 14,576 13,526 +8%
------------------------------------------------------------------------------------------------------------------------
5,642 4,798 4,260 +32% Adjusted cash flow 14,771 12,939 +14%
------------------------------------------------------------------------------------------------------------------------
*T
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3Q08 in millions of dollars(5) 9M08
3Q08 2Q08 3Q07 vs except earnings per share and vs
3Q07 number of shares 9M08 9M07 9M07
------- ------- ------- ----- ---------------------------------- ------- ------- -----
73,518 75,298 54,169 +36% Sales 214,958 155,357 +38%
------- ------- ------- ----- ---------------------------------- ------- ------- -----
Adjusted operating income from
12,165 12,163 7,927 +53% business segments 34,981 23,196 +51%
------- ------- ------- ----- ---------------------------------- ------- ------- -----
Adjusted net operating income from
6,115 5,868 4,121 +48% business segments 16,768 12,138 +38%
------- ------- ------- ----- ---------------------------------- ------- ------- -----
4,363 4,841 3,059 +43% = Upstream 13,283 8,442 +57%
1,356 917 723 +88% = Downstream 2,738 2,674 +2%
396 109 339 +17% = Chemicals 747 1,022 -27%
------- ------- ------- ----- ---------------------------------- ------- ------- -----
6,125 5,816 4,127 +48% Adjusted net income 16,810 12,228 +37%
------- ------- ------- ----- ---------------------------------- ------- ------- -----
Adjusted fully-diluted earnings
2.73 2.58 1.82 +50% per share (dollars) 7.47 5.37 +39%
------- ------- ------- ----- ---------------------------------- ------- ------- -----
Fully-diluted weighted-average
2,244.3 2,252.9 2,272.6 -1% shares (millions) 2,250.4 2,277.3 -1%
------- ------- ------- ----- ---------------------------------- ------- ------- -----
4,590 7,392 4,288 +7% Net income (Group share) 17,323 12,880 +34%
--------------------------------------------------------------------------------------
5,073 4,480 3,558 +43% Investments 13,516 10,343 +31%
--------------------------------------------------------------------------------------
1,081 1,134 150 x7.2 Divestments 2,499 773 +223%
--------------------------------------------------------------------------------------
Cash flow from operating
11,044 3,003 4,876 +126% activities 22,180 18,183 +22%
--------------------------------------------------------------------------------------
8,491 7,495 5,852 +45% Adjusted cash flow 22,477 17,394 +29%
--------------------------------------------------------------------------------------
*T
-- Third quarter 2008 results
Results
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3Q08 2Q08 3Q07 3Q08 in millions of euros 9M08
vs except TRCV refining margins 9M08 9M07 vs
3Q07 9M07
------- ------- ------- ----- ---------------------------------- ------- ------- -----
European refining margin
45.0 40.2 23.9 +88% indicator - TRCV ($/t) 36.6 33.3 +10%
------- ------- ------- ----- ---------------------------------- ------- ------- -----
1,215 744 566 +115% Adjusted operating income* 2,457 2,543 -3%
------- ------- ------- ----- ---------------------------------- ------- ------- -----
901 587 526 +71% Adjusted net operating income* 1,799 1,989 -10%
39 15 63 -38% -- includes income from equity 56 201 -72%
affiliates
------- ------- ------- ----- ---------------------------------- ------- ------- -----
638 514 381 +67% Investments 1,446 1,026 +41%
------- ------- ------- ----- ---------------------------------- ------- ------- -----
46 128 27 +70% Divestments 198 77 +157%
------- ------- ------- ----- ---------------------------------- ------- ------- -----
x6.2 Cash flow from operating
2,731 (1,391) 439 activities 2,508 3,776 -34%
------- ------- ------- ----- ---------------------------------- ------- ------- -----
1,466 623 743 +97% Adjusted cash flow 2,609 2,781 -6%
------- ------- ------- ----- ---------------------------------- ------- ------- -----
*T
* detail of adjustment items shown in business segment information.
The TRCV European refining margin indicator was 45 $/t in the third quarter
2008, an increase of 88% compared to the third quarter 2007 and 12% compared to
the second quarter 2008.
Adjusted net operating income for the Downstream segment was 901 MEUR in the
third quarter 2008, an increase of 71% compared to the third quarter 2007 and
53% compared to the second quarter 2008.
Expressed in dollars, adjusted net operating income for the Downstream segment
was 1,356 M$, an increase of 88% compared to the third quarter 2007 and 48%
compared to the second quarter 2008.
The decrease in income from equity affiliates in the third quarter 2008 compared
to the third quarter 2007 was mainly due to losses incurred through Total's
participation in Wepec, its affiliate for refining in China.
The ROACE(20) for the Downstream segment for the twelve months ended September
30, 2008 was 19.5%. For the twelve months ended June 30, 2008 it was 16.0% and
for the full year 2007 it was 20.6%.
Chemicals
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3Q08 9M08
3Q08 2Q08 3Q07 vs in millions of euros 9M08 9M07 vs
3Q07 9M07
------- ------- ------- ----- ---------------------------------- ------- ------- -----
5,431 5,478 4,856 +12% Sales 16,138 14,921 +8%
3,675 3,632 3,071 +20% = Base chemicals 10,727 9,424 +14%
1,756 1,846 1,785 -2% = Specialties 5,411 5,497 -2%
------- ------- ------- ----- ---------------------------------- ------- ------- -----
343 78 343 - Adjusted operating income* 619 1,036 -40%
------- ------- ------- ----- ---------------------------------- ------- ------- -----
263 70 247 +6% Adjusted net operating income* 491 760 -35%
------- ------- ------- ----- ---------------------------------- ------- ------- -----
176 -23 140 +26% -- Base chemicals 214 439 -51%
------- ------- ------- ----- ---------------------------------- ------- ------- -----
89 97 99 -10% -- Specialties 284 316 -10%
------- ------- ------- ----- ---------------------------------- ------- ------- -----
212 221 200 +6% Investments 597 546 +9%
------- ------- ------- ----- ---------------------------------- ------- ------- -----
14 12 15 -7% Divestments 33 63 -48%
------- ------- ------- ----- ---------------------------------- ------- ------- -----
Cash flow from operating na
14 169 217 -94% activities (19) 578
------- ------- ------- ----- ---------------------------------- ------- ------- -----
352 152 300 +17% Adjusted cash flow 770 931 -17%
------- ------- ------- ----- ---------------------------------- ------- ------- -----
*T
* detail of adjustment items shown in business segment information.
Petrochemical margins rebounded in the third quarter 2008, benefiting from a
decrease in the price of naphtha over the quarter. Sales volumes for polymers,
however, continued to reflect weaker demand in the Atlantic Basin.
In the third quarter 2008, sales for the Chemicals segment were 5,431 MEUR .
Adjusted net operating income for the Chemicals segment was 263 MEUR , an
increase of 6% compared to the third quarter 2007.
The increase in the results for Base chemicals was primarily due to the
increasing contribution from production based on ethane feedstock.
The results of the Specialties continued to be satisfactory despite a slowdown
in the economic environment.
The ROACE(21) for the Chemicals segment for the twelve months ended September
30, 2008 was 7.5%. For the twelve months ended June 30, 2008, it was 7.7% and
for the full year 2007 it was 12.1%.
-- Summary and outlook
The ROACE(22) for the twelve months ended September 30, 2008 was 27% for the
Group and 29% for the business segments compared respectively to 25% and 29% for
the twelve months ended June 30, 2008 and 24% and 27% for the full year 2007.
Return on equity for the twelve months ended September 30, 2008 was 31%.
Total will pay the 2008 interim dividend of 1.14 EUR per share(23) on November
19, 2008(24), an increase of 14% compared to the 2007 interim dividend.
Implementation of the 2008 investment program of 19 B$(25) is progressing as
planned.
The Group continued to strengthen its balance sheet by reducing its
net-debt-to-equity ratio to 15.4% at the end of September 2008. In parallel,
Total is maintaining a high level of liquidity and pursuing a policy of
progressively divesting non-strategic holdings.
Since the start of the fourth quarter 2008, the Brent oil price has fallen to
around 60 $/b. European refining margins have pulled well back from the
September highs but remain near the level of the third quarter average.
Major project developments are progressing generally in line with targets. Five
significant new projects are expected to start production in 2009, including
Akpo in Nigeria, Yemen LNG and Qatargas II.
Total reaffirms its view of higher oil prices in the medium to long term,
supported by a tight supply-demand balance. In the short term, OPEC action and
certain issues affecting oil production in a number of producing countries
should allow supply and demand to remain in balance, largely as a function of
adjusting the supply to weaker levels of demand.
The Group's strength is in the consistency of its long-term strategy, its
discipline, the quality of its integrated portfolio and the competitive
advantage of its low technical costs.
Total has the financial strength and flexibility to continue to develop the
company within the framework of its strict decision criteria and to maintain
competitive dividend growth even through a prolonged period of weakness in the
environment.
To listen to CFO Patrick de la Chevardière's conference call with financial
analysts today at 15:00 (Paris time) please log on to www.total.com or call
+44 (0)203 043 2441 in Europe or +1 866 907 5928 in the U.S. (access code :
Total). For a replay through November 14, please consult the website or call
+44 (0)207 075 3214 in Europe or 1 866 828 2261 in the US (code : 230 340).
-- Board reviews October 6, 2008 AFEP-MEDEF recommendations
At its meeting on November 4, 2008, the Board of Directors reviewed the
recommendations, dated October 6, 2008, of the AFEP-MEDEF regarding compensation
for executive directors of listed companies.
The Board concluded that these recommendations were consistent with the
corporate governance principles of Total.
The Board then decided that, starting with the current fiscal year, the
AFEP-MEDEF code, modified to take into account these recommendations, will be
the basis for the preparation of the report required by Article L. 225-37 of the
French Commercial Code.
The September 30, 2008 notes to the condensed consolidated accounts are
available on the Total web site (www.total.com). This document may contain
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 with respect to the financial condition, results
of operations, business, strategy and plans of Total. Such statements are based
on a number of assumptions that could ultimately prove inaccurate, and are
subject to a number of risk factors, including currency fluctuations, the price
of petroleum products, the ability to realize cost reductions and operating
efficiencies without unduly disrupting business operations, environmental
regulatory considerations and general economic and business conditions. Total
does not assume any obligation to update publicly any forward-looking statement,
whether as a result of new information, future events or otherwise. Further
information on factors which could affect the company's financial results is
provided in documents filed by the Group and its affiliates with the French
Autorité des Marchés Financiers and the US Securities and Exchange Commission.
Business segment information is presented in accordance with the Group internal
reporting system used by the Chief operating decision maker to measure
performance and allocate resources internally. Due to their particular nature or
significance, certain transactions qualified as 'special items' are excluded
from the business segment figures. In general, special items relate to
transactions that are significant, infrequent or unusual. However, in certain
instances, certain transactions such as restructuring costs or assets disposals,
which are not considered to be representative of normal course of business, may
be qualified as special items although they may have occurred within prior years
or are likely to recur within following years.
The adjusted results of the Downstream and Chemical segments are also presented
according to the replacement cost method. This method is used to assess the
segments' performance and ensure the comparability of the segments' results with
those of its competitors, mainly North American.
In the replacement cost method, which approximates the LIFO (Last-In, First-Out)
method, the variation of inventory values in the income statement is determined
by the average price of the period rather than the historical value. The
inventory valuation effect is the difference between the results according to
FIFO (First-In, First-Out) and replacement cost.
In this framework, performance measures such as adjusted operating income,
adjusted net operating income and adjusted net income are defined as incomes
using replacement cost, adjusted for special items and excluding Total's equity
share of the amortization of intangibles related to the Sanofi-Aventis merger.
They are meant to facilitate the analysis of the financial performance and the
comparison of income between periods.
Dollar amounts presented herein represent euro amounts converted at the average
euro-dollar exchange rate for the applicable period and are not the result of
financial statements prepared in dollars.
Cautionary Note to U.S. Investors -- The United States Securities and Exchange
Commission permits oil and gas companies, in their filings with the SEC, to
disclose only proved reserves that a company has demonstrated by actual
production or conclusive formation tests to be economically and legally
producible under existing economic and operating conditions. We use certain
terms in this press release, such as resources, that the SEC's guidelines
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 No. 1-10888
available from us at 2, place Jean Millier - La Défense 6 - 92078 Paris, La
Défense cedex, France or at our website: www.total.com. You can also obtain this
form from the SEC by calling 1-800-SEC-0330 or on the SEC's website:
www.sec.gov.
Operating information by segment
Third quarter and first nine months 2008
-- Upstream
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*T
3Q08 vs Combined liquids and gas 9M08
3Q08 2Q08 3Q07 3Q07 production by region (kboe/d) 9M08 9M07 vs
9M07
------- ------- ------- ------- --------------------------------- ------- ------- -------
553 601 628 -12% Europe 593 672 -12%
753 796 811 -7% Africa 801 797 +1%
13 14 18 -28% North America 14 22 -36%
247 246 252 -2% Far East 248 252 -2%
430 433 393 +9% Middle East 433 384 +13%
212 236 228 -7% South America 221 226 -2%
23 27 22 +5% Rest of world 26 15 +73%
------- ------- ------- ------- --------------------------------- ------- ------- -------
2,231 2,353 2,352 -5% Total production 2,336 2,368 -1%
------- ------- ------- ------- --------------------------------- ------- ------- -------
Includes equity and non-
398 418 317 +26% consolidated affiliates 404 322 +25%
------- ------- ------- ------- --------------------------------- ------- ------- -------
*T
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3Q08 Liquids production by region 9M08
3Q08 2Q08 3Q07 vs (kb/d) 9M08 9M07 vs
3Q07 9M07
------- ------- ------- ------- --------------------------------- ------- ------- -------
288 299 313 -8% Europe 295 333 -11%
633 667 689 -8% Africa 670 680 -1%
10 11 11 -9% North America 11 14 -21%
28 27 29 -3% Far East 28 29 -3%
330 331 322 +2% Middle East 332 324 +2%
109 125 107 +2% South America 115 113 +2%
11 11 10 +10% Rest of world 12 9 +33%
------- ------- ------- ------- --------------------------------- ------- ------- -------
1,409 1,471 1,481 -5% Total production 1,463 1,502 -3%
------- ------- ------- ------- --------------------------------- ------- ------- -------
Includes equity and non-
344 366 262 +31% consolidated affiliates 350 269 +30%
------- ------- ------- ------- --------------------------------- ------- ------- -------
*T
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*T
3Q08 9M08
3Q08 2Q08 3Q07 vs Gas production by region (Mcf/d) 9M08 9M07 vs
3Q07 9M07
------- ------- ------- ------- --------------------------------- ------- ------- -------
1,442 1,639 1,710 -16% Europe 1,618 1,837 -12%
621 667 630 -1% Africa 659 604 +9%
12 19 32 -63% North America 18 36 -50%
1,210 1,210 1,251 -3% Far East 1,222 1,247 -2%
552 548 384 +44% Middle East 560 326 +72%
569 610 669 -15% South America 589 625 -6%
65 79 65 - Rest of world 77 32 +141%
------- ------- ------- ------- --------------------------------- ------- ------- -------
4,471 4,772 4,741 -6% Total production 4,743 4,707 +1%
------- ------- ------- ------- --------------------------------- ------- ------- -------
Includes equity and non-
290 281 289 - consolidated affiliates 293 286 +2%
------- ------- ------- ------- --------------------------------- ------- ------- -------
*T
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3Q08 9M08
3Q08 2Q08 3Q07 vs Liquefied natural gas 9M08 9M07 vs
3Q07 9M07
------- ------- ------- ------- --------------------------------- ------- ------- -------
2.32 2.21 2.31 - LNG sales (Mt)* 6.90 6.74 +2%
------- ------- ------- ------- --------------------------------- ------- ------- -------
*T
* sales , Group share, excluding trading ; estimated volumes for Bontang in
Indonesia based on 2007 SEC coefficient. ; 1 Mt/y = approx. 133 Mcf/d.
-- Downstream
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3Q08 Refined products sales by region 9M08
3Q08 2Q08 3Q07 vs (kb/d)* 9M08 9M07 vs
3Q07 9M07
------- ------- ------- ----- ------------------------------------ ------- ------- -----
2,161 1,999 2,305 -6% Europe 2,102 2,265 -7%
279 280 292 -4% Africa 279 286 -2%
136 220 194 -30% Americas** 170 189 -10%
147 143 148 -1% Rest of world 145 144 +1%
------- ------- ------- ----- ------------------------------------ ------- ------- -----
2,723 2,642 2,939 -7% Total consolidated sales 2,696 2,884 -7%
------- ------- ------- ----- ------------------------------------ ------- ------- -----
992 956 790 +26% Trading 964 878 +10%
------- ------- ------- ----- ------------------------------------ ------- ------- -----
------- ------- ------- ----- ------------------------------------ ------- ------- -----
3,715 3,598 3,729 - Total refined product sales 3,660 3,762 -3%
------- ------- ------- ----- ------------------------------------ ------- ------- -----
*T
* includes share of CEPSA.
** third quarter 2007 restated to reflect a change in the method of calculating
volumes for Port Arthur.
Adjustment items
-- Adjustments to operating income from business segments
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3Q08 2Q08 3Q07 in millions of euros 9M08 9M07
-------- ------- ------- --------------------------------------------- ------- -------
Special items affecting operating income from
- - - the business segments - -
-------- ------- ------- --------------------------------------------- ------- -------
- - - = Restructuring charges - -
- - - = Impairments - -
- - - = Other - -
-------- ------- ------- --------------------------------------------- ------- -------
Pre-tax inventory effect : FIFO vs.
(1,193) 1,687 210 replacement cost 869 1,103
-------- ------- ------- --------------------------------------------- ------- -------
-------- ------- ------- --------------------------------------------- ------- -------
Total adjustments affecting operating income
(1,193) 1,687 210 from the business segments 869 1,103
-------- ------- ------- --------------------------------------------- ------- -------
*T
-- Adjustments to net income (Group share)
-0-
*T
3Q08 2Q08 3Q07 in millions of euros 9M08 9M07
-------- ------- ------- --------------------------------------------- ------- -------
Special items affecting net income (Group
(190) (67) 55 share) (112) (45)
-------- ------- ------- --------------------------------------------- ------- -------
= Equity share of special items recorded by
- - 75 Sanofi-Aventis - 75
50 2 - = Gain on asset sales 197 -
(4) (44) (20) = Restructuring charges (48) (20)
(34) - - = Impairments (34) -
(202) (25) - = Other (227) (100)
-------- ------- ------- --------------------------------------------- ------- -------
Adjustment related to the Sanofi-Aventis
merger* (share of amortization of intangible
(78) (78) (77) assets) (227) (225)
-------- ------- ------- --------------------------------------------- ------- -------
After-tax inventory effect : FIFO vs.
(752) 1,154 139 replacement cost 676 755
-------- ------- ------- --------------------------------------------- ------- -------
-------- ------- ------- --------------------------------------------- ------- -------
(1,020) 1,009 117 Total adjustments to net income 337 485
-------- ------- ------- --------------------------------------------- ------- -------
*T
* based on Total's share in Sanofi-Aventis of 12.4% at 9/30/2008 and 13.2% at
9/30/2007 and 6/30/2008.
Investments - Divestments
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*T
3Q08 9M08
3Q08 2Q08 3Q07 vs in millions of euros vs
3Q07 9M08 9M07 9M07
------- ------- ------- ----- ------------------------------------ ------- ------- -----
2,774 2,091 2,456 +13% Investments excluding acquisitions* 7,363 7,252 +2%
212 205 234 -9% -- Capitalized exploration 589 637 -8%
-- Net investments in equity
na affiliates and non-consolidated na
(56) (522) 52 companies (466) 116
------- ------- ------- ----- ------------------------------------ ------- ------- -----
421 47 94 x4.5 Acquisitions 516 161 x3.2
------- ------- ------- ----- ------------------------------------ ------- ------- -----
524 120 43 x12.2 Asset sales 719 216 x3.3
------- ------- ------- ----- ------------------------------------ ------- ------- -----
2,653 2,142 2,481 +7% Net investments** 7,240 7,119 +2%
------- ------- ------- ----- ------------------------------------ ------- ------- -----
*T
* includes net investments in equity affiliates and non-consolidated companies.
** net investments = investments including acquisitions and net investments in
equity affiliates and non-consolidated companies - asset sales + net financing
for employees related to stock purchase plans.
Net-debt-to-equity ratio
-0-
*T
in millions of euros 9/30/2008 6/30/2008 9/30/2007
------------------------------------------- ------------ ------------ ------------
Current borrowings 5,378 4,795 9,194
Net current financial assets (230) (49) (10,870)
Non-current financial debt 16,347 14,777 15,103
Hedging instruments of non-current debt (406) (540) (434)
Cash and cash equivalents (13,231) (7,245) (2,812)
------------------------------------------- ------------ ------------ ------------
Net debt 7,858 11,738 10,181
------------------------------------------- ------------ ------------ ------------
------------------------------------------- ------------ ------------ ------------
Shareholders equity 50,801 48,273 42,818
Estimated dividend payable* (920) (2,315) (906)
Minority interests 1,001 855 851
------------------------------------------- ------------ ------------ ------------
Equity 50,882 46,813 42,763
------------------------------------------- ------------ ------------ ------------
------------------------------------------- ------------ ------------ ------------
Net-debt-to-equity ratio 15.4% 25.1% 23.8%
------------------------------------------- ------------ ------------ ------------
*T
* for 9/30/2008, based on a 2008 dividend equal to the 2007 dividend of 2.07 EUR
/share, after deducting the interim dividend of 1.14 EUR per share approved by
the Board of Directors on September 9, 2008.
Effective tax rates
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*T
3Q08 2Q08 3Q07 Average tax rates* 9M08 9M07
-------- -------- -------- ------------------------------------ --------- ---------
61.7% 61.2% 59.3% Upstream 61.8% 59.8%
55.9% 57.8% 55.1% Group 57.6% 54.4%
-------- -------- -------- ------------------------------------ --------- ---------
*T
* tax on adjusted net operating income / (adjusted net operating income - income
from affiliates, dividends received from investments, and impairments of
acquisition goodwill + tax on adjusted net operating income).
2008 Sensitivities*
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*T
Impact on adjusted Impact on adjusted
Scenario Change operating net operating
income(e) income(e)
-------------------- --------- ------------ ------------------ -------------------
EUR -$ 1.50 +0.1 $ per -1.5 BEUR -0.8 BEUR
$/EUR EUR
-------------------- --------- ------------ ------------------ -------------------
Brent 80 $/b +1 $/b +0.28 BEUR / 0.42 +0.12 BEUR / 0.18
B$ B$
-------------------- --------- ------------ ------------------ -------------------
European refining 33 $/t +1 $/t +0.08 BEUR / 0.12 +0.05 BEUR / 0.08
margins TRCV B$ B$
-------------------- --------- ------------ ------------------ -------------------
*T
* sensitivities revised once per year upon publication of the previous year
fourth quarter results. The impact of the EUR -$ sensitivity on the adjusted
operating income and the adjusted net operating income attributable to the
Upstream segment are approximately 70% and 60% respectively, and the remaining
impact of the EUR -$ sensitivity is essentially split between the Downstream and
Chemicals segments.
Return on average capital employed
-- For the twelve months ended September 30, 2008
-0-
*T
in millions of euros Upstream Downstream Chemicals** Segments Group***
------------------------- --------- ------------ ------------ ---------- ---------
Adjusted net operating
income 11,298 2,345 578 14,221 14,915
Capital employed at
9/30/2007* 26,863 11,446 7,305 45,614 53,243
Capital employed at
9/30/2008* 30,184 12,649 8,107 50,940 58,165
------------------------- --------- ------------ ------------ ---------- ---------
ROACE 39.6% 19.5% 7.5% 29.5% 26.8%
------------------------- --------- ------------ ------------ ---------- ---------
*T
* at replacement cost (excluding after-tax inventory effect).
** capital employed for Chemicals reduced for the Toulouse-AZF provision of 139
MEUR pre-tax at 9/30/2007 and 121 MEUR pre-tax at 9/30/2008.
*** capital employed for the Group adjusted for the amount payable for the
interim dividend approved in September 2008 (2,545 MEUR ).
-- For the twelve months ended June 30 2008
-0-
*T
in millions of euros Upstream Downstream Chemicals** Segments Group
------------------------ --------- ------------ ------------ ---------- ----------
Adjusted net operating
income 10,626 1,970 562 13,158 13,810
Capital employed at
6/30/2007* 25,218 11,204 7,264 43,686 52,645
Capital employed at
6/30/2008* 26,676 13,491 7,394 47,561 56,107
------------------------ --------- ------------ ------------ ---------- ----------
ROACE 41.0% 16.0% 7.7% 28.8% 25.4%
------------------------ --------- ------------ ------------ ---------- ----------
*T
* at replacement cost (excluding after-tax inventory effect).
** capital employed for Chemicals reduced for the Toulouse-AZF provision of 146
MEUR pre-tax at 6/30/2007 and 126 MEUR pre-tax at 6/30/2008.
-- For the twelve months ended September 30, 2007
-0-
*T
in millions of euros Upstream Downstream Chemicals** Segments Group***
------------------------ --------- ------------ ------------ ---------- ----------
Adjusted net operating
income 8,165 2,538 1,015 11,718 12,434
Capital employed at
9/30/2006* 24,561 11,431 7,257 43,249 50,371
Capital employed at
9/30/2007* 26,863 11,446 7,305 45,614 53,243
------------------------ --------- ------------ ------------ ---------- ----------
ROACE 31.8% 22.2% 13.9% 26.4% 24.0%
------------------------ --------- ------------ ------------ ---------- ----------
*T
* at replacement cost (excluding after-tax inventory effect).
** capital employed for Chemicals reduced for the Toulouse-AZF provision of 85
MEUR pre-tax at 9/30/2006 and 139 MEUR pre-tax at 9/30/2007.
*** capital employed for the Group adjusted for the amount payable for the
interim dividend approved in September 2007 (2,252 MEUR ).
(1) percent changes are relative to the same period 2007.
(2) dollar amounts represent euro amounts converted at the average EUR -$
exchange rate for the period : 1.5050 $/EUR in the third quarter 2008, 1.3738
$/EUR in the third quarter 2007, 1.5622 $/EUR in the second quarter 2008, 1.5217
$/EUR in the first nine months of 2008, and 1.3443 $/EUR in the first nine
months of 2007.
(3) adjusted net income = net income using replacement cost (Group share)
adjusted for special items and excluding Total's share of amortization of
intangibles related to the Sanofi-Aventis merger. Net income (Group share) for
the third quarter 2008 was 3,050 MEUR , a decrease of 2% compared to the third
quarter 2007.
(4) adjusted income (adjusted operating income, adjusted net operating income
and adjusted net income) is defined as income using replacement cost, adjusted
for special items and excluding Total's equity share of amortization of
intangibles related to the Sanofi-Aventis merger; adjusted cash flow is defined
as cash flow from operating activities at replacement cost before changes in
working capital; adjustment items are listed on page 17.
(5 )dollar amounts represent euro amounts converted at the average EUR -$
exchange rate for the period.
(6) there were no special items affecting operating income from the business
segments in the third quarters of 2007 and 2008.
(7) defined as : (tax on adjusted net operating income) / (adjusted net
operating income - income from equity affiliates, dividends received from
investments and impairments of acquisition goodwill + tax on adjusted net
operating income).
(8) detail shown on page 17.
(9) net investments = investments including acquisitions and net investments in
equity affiliates and non-consolidated companies - asset sales + net financing
for employees related to stock purchase plans.
(10) adjusted cash flow = cash flow from operating activities at replacement
cost before changes in working capital.
(11) net cash flow = cash flow from operating activities + divestments -
investments.
(12) there were no special items affecting operating income from the business
segments in the first nine months of 2008 and 2007.
(13) detail shown on page 17.
(14) net investments = investments including acquisitions and net investments in
equity affiliates and non-consolidated companies - asset sales + net financing
for employees related to stock purchase plans.
(15) adjusted cash flow = cash flow from operations at replacement cost before
changes in working capital.
(16) net cash flow = cash flow from operations + divestments - investments.
(17) detail shown on page 18.
(18) impact of changing hydrocarbon prices on entitlement volumes.
(19) calculated based on adjusted net operating income and average capital
employed, using replacement cost, as shown on page 19.
(20) calculated based on adjusted net operating income and average capital
employed, using replacement cost, as shown on page 19.
(21) calculated based on adjusted net operating income and average capital
employed, using replacement cost, as shown on page 19.
(22) calculated based on adjusted net operating income and average capital
employed, using replacement cost, as shown on page 19.
(23) approved by the Board of Directors on September 9, 2008
(24) the ex-dividend date for the interim dividend on 2008 shares will be
November 14, 2008
(25) based on 1 EUR = $1.50 for 2008, includes net investments in equity
affiliates and non-consolidated companies, excludes acquisitionsResults
-0-
*T
3Q08 2Q08 3Q07 3Q08 in millions of euros 9M08
vs except TRCV refining margins 9M08 9M07 vs
3Q07 9M07
------- ------- ------- ----- ---------------------------------- ------- ------- -----
European refining margin
45.0 40.2 23.9 +88% indicator - TRCV ($/t) 36.6 33.3 +10%
------- ------- ------- ----- ---------------------------------- ------- ------- -----
1,215 744 566 +115% Adjusted operating income* 2,457 2,543 -3%
------- ------- ------- ----- ---------------------------------- ------- ------- -----
901 587 526 +71% Adjusted net operating income* 1,799 1,989 -10%
39 15 63 -38% -- includes income from equity 56 201 -72%
affiliates
------- ------- ------- ----- ---------------------------------- ------- ------- -----
638 514 381 +67% Investments 1,446 1,026 +41%
------- ------- ------- ----- ---------------------------------- ------- ------- -----
46 128 27 +70% Divestments 198 77 +157%
------- ------- ------- ----- ---------------------------------- ------- ------- -----
x6.2 Cash flow from operating
2,731 (1,391) 439 activities 2,508 3,776 -34%
------- ------- ------- ----- ---------------------------------- ------- ------- -----
1,466 623 743 +97% Adjusted cash flow 2,609 2,781 -6%
------- ------- ------- ----- ---------------------------------- ------- ------- -----
*T
* detail of adjustment items shown in business segment information.
The TRCV European refining margin indicator was 45 $/t in the third quarter
2008, an increase of 88% compared to the third quarter 2007 and 12% compared to
the second quarter 2008.
Adjusted net operating income for the Downstream segment was 901 MEUR in the
third quarter 2008, an increase of 71% compared to the third quarter 2007 and
53% compared to the second quarter 2008.
Expressed in dollars, adjusted net operating income for the Downstream segment
was 1,356 M$, an increase of 88% compared to the third quarter 2007 and 48%
compared to the second quarter 2008.
The decrease in income from equity affiliates in the third quarter 2008 compared
to the third quarter 2007 was mainly due to losses incurred through Total's
participation in Wepec, its affiliate for refining in China.
The ROACE(20) for the Downstream segment for the twelve months ended September
30, 2008 was 19.5%. For the twelve months ended June 30, 2008 it was 16.0% and
for the full year 2007 it was 20.6%.
Chemicals
-0-
*T
3Q08 9M08
3Q08 2Q08 3Q07 vs in millions of euros 9M08 9M07 vs
3Q07 9M07
------- ------- ------- ----- ---------------------------------- ------- ------- -----
5,431 5,478 4,856 +12% Sales 16,138 14,921 +8%
3,675 3,632 3,071 +20% = Base chemicals 10,727 9,424 +14%
1,756 1,846 1,785 -2% = Specialties 5,411 5,497 -2%
------- ------- ------- ----- ---------------------------------- ------- ------- -----
343 78 343 - Adjusted operating income* 619 1,036 -40%
------- ------- ------- ----- ---------------------------------- ------- ------- -----
263 70 247 +6% Adjusted net operating income* 491 760 -35%
------- ------- ------- ----- ---------------------------------- ------- ------- -----
176 -23 140 +26% -- Base chemicals 214 439 -51%
------- ------- ------- ----- ---------------------------------- ------- ------- -----
89 97 99 -10% -- Specialties 284 316 -10%
------- ------- ------- ----- ---------------------------------- ------- ------- -----
212 221 200 +6% Investments 597 546 +9%
------- ------- ------- ----- ---------------------------------- ------- ------- -----
14 12 15 -7% Divestments 33 63 -48%
------- ------- ------- ----- ---------------------------------- ------- ------- -----
Cash flow from operating na
14 169 217 -94% activities (19) 578
------- ------- ------- ----- ---------------------------------- ------- ------- -----
352 152 300 +17% Adjusted cash flow 770 931 -17%
------- ------- ------- ----- ---------------------------------- ------- ------- -----
*T
* detail of adjustment items shown in business segment information.
Petrochemical margins rebounded in the third quarter 2008, benefiting from a
decrease in the price of naphtha over the quarter. Sales volumes for polymers,
however, continued to reflect weaker demand in the Atlantic Basin.
In the third quarter 2008, sales for the Chemicals segment were 5,431 MEUR .
Adjusted net operating income for the Chemicals segment was 263 MEUR , an
increase of 6% compared to the third quarter 2007.
The increase in the results for Base chemicals was primarily due to the
increasing contribution from production based on ethane feedstock.
The results of the Specialties continued to be satisfactory despite a slowdown
in the economic environment.
The ROACE(21) for the Chemicals segment for the twelve months ended September
30, 2008 was 7.5%. For the twelve months ended June 30, 2008, it was 7.7% and
for the full year 2007 it was 12.1%.
-- Summary and outlook
The ROACE(22) for the twelve months ended September 30, 2008 was 27% for the
Group and 29% for the business segments compared respectively to 25% and 29% for
the twelve months ended June 30, 2008 and 24% and 27% for the full year 2007.
Return on equity for the twelve months ended September 30, 2008 was 31%.
Total will pay the 2008 interim dividend of 1.14 EUR per share(23) on November
19, 2008(24), an increase of 14% compared to the 2007 interim dividend.
Implementation of the 2008 investment program of 19 B$(25) is progressing as
planned.
The Group continued to strengthen its balance sheet by reducing its
net-debt-to-equity ratio to 15.4% at the end of September 2008. In parallel,
Total is maintaining a high level of liquidity and pursuing a policy of
progressively divesting non-strategic holdings.
Since the start of the fourth quarter 2008, the Brent oil price has fallen to
around 60 $/b. European refining margins have pulled well back from the
September highs but remain near the level of the third quarter average.
Major project developments are progressing generally in line with targets. Five
significant new projects are expected to start production in 2009, including
Akpo in Nigeria, Yemen LNG and Qatargas II.
Total reaffirms its view of higher oil prices in the medium to long term,
supported by a tight supply-demand balance. In the short term, OPEC action and
certain issues affecting oil production in a number of producing countries
should allow supply and demand to remain in balance, largely as a function of
adjusting the supply to weaker levels of demand.
The Group's strength is in the consistency of its long-term strategy, its
discipline, the quality of its integrated portfolio and the competitive
advantage of its low technical costs.
Total has the financial strength and flexibility to continue to develop the
company within the framework of its strict decision criteria and to maintain
competitive dividend growth even through a prolonged period of weakness in the
environment.
To listen to CFO Patrick de la Chevardière's conference call with financial
analysts today at 15:00 (Paris time) please log on to www.total.com or call
+44 (0)203 043 2441 in Europe or +1 866 907 5928 in the U.S. (access code :
Total). For a replay through November 14, please consult the website or call
+44 (0)207 075 3214 in Europe or 1 866 828 2261 in the US (code : 230 340).
-- Board reviews October 6, 2008 AFEP-MEDEF recommendations
At its meeting on November 4, 2008, the Board of Directors reviewed the
recommendations, dated October 6, 2008, of the AFEP-MEDEF regarding compensation
for executive directors of listed companies.
The Board concluded that these recommendations were consistent with the
corporate governance principles of Total.
The Board then decided that, starting with the current fiscal year, the
AFEP-MEDEF code, modified to take into account these recommendations, will be
the basis for the preparation of the report required by Article L. 225-37 of the
French Commercial Code.
The September 30, 2008 notes to the condensed consolidated accounts are
available on the Total web site (www.total.com). This document may contain
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 with respect to the financial condition, results
of operations, business, strategy and plans of Total. Such statements are based
on a number of assumptions that could ultimately prove inaccurate, and are
subject to a number of risk factors, including currency fluctuations, the price
of petroleum products, the ability to realize cost reductions and operating
efficiencies without unduly disrupting business operations, environmental
regulatory considerations and general economic and business conditions. Total
does not assume any obligation to update publicly any forward-looking statement,
whether as a result of new information, future events or otherwise. Further
information on factors which could affect the company's financial results is
provided in documents filed by the Group and its affiliates with the French
Autorité des Marchés Financiers and the US Securities and Exchange Commission.
Business segment information is presented in accordance with the Group internal
reporting system used by the Chief operating decision maker to measure
performance and allocate resources internally. Due to their particular nature or
significance, certain transactions qualified as 'special items' are excluded
from the business segment figures. In general, special items relate to
transactions that are significant, infrequent or unusual. However, in certain
instances, certain transactions such as restructuring costs or assets disposals,
which are not considered to be representative of normal course of business, may
be qualified as special items although they may have occurred within prior years
or are likely to recur within following years.
The adjusted results of the Downstream and Chemical segments are also presented
according to the replacement cost method. This method is used to assess the
segments' performance and ensure the comparability of the segments' results with
those of its competitors, mainly North American.
In the replacement cost method, which approximates the LIFO (Last-In, First-Out)
method, the variation of inventory values in the income statement is determined
by the average price of the period rather than the historical value. The
inventory valuation effect is the difference between the results according to
FIFO (First-In, First-Out) and replacement cost.
In this framework, performance measures such as adjusted operating income,
adjusted net operating income and adjusted net income are defined as incomes
using replacement cost, adjusted for special items and excluding Total's equity
share of the amortization of intangibles related to the Sanofi-Aventis merger.
They are meant to facilitate the analysis of the financial performance and the
comparison of income between periods.
Dollar amounts presented herein represent euro amounts converted at the average
euro-dollar exchange rate for the applicable period and are not the result of
financial statements prepared in dollars.
Cautionary Note to U.S. Investors -- The United States Securities and Exchange
Commission permits oil and gas companies, in their filings with the SEC, to
disclose only proved reserves that a company has demonstrated by actual
production or conclusive formation tests to be economically and legally
producible under existing economic and operating conditions. We use certain
terms in this press release, such as resources, that the SEC's guidelines
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 No. 1-10888
available from us at 2, place Jean Millier - La Défense 6 - 92078 Paris, La
Défense cedex, France or at our website: www.total.com. You can also obtain this
form from the SEC by calling 1-800-SEC-0330 or on the SEC's website:
www.sec.gov.
Operating information by segment
Third quarter and first nine months 2008
-- Upstream
-0-
*T
3Q08 vs Combined liquids and gas 9M08
3Q08 2Q08 3Q07 3Q07 production by region (kboe/d) 9M08 9M07 vs
9M07
------- ------- ------- ------- --------------------------------- ------- ------- -------
553 601 628 -12% Europe 593 672 -12%
753 796 811 -7% Africa 801 797 +1%
13 14 18 -28% North America 14 22 -36%
247 246 252 -2% Far East 248 252 -2%
430 433 393 +9% Middle East 433 384 +13%
212 236 228 -7% South America 221 226 -2%
23 27 22 +5% Rest of world 26 15 +73%
------- ------- ------- ------- --------------------------------- ------- ------- -------
2,231 2,353 2,352 -5% Total production 2,336 2,368 -1%
------- ------- ------- ------- --------------------------------- ------- ------- -------
Includes equity and non-
398 418 317 +26% consolidated affiliates 404 322 +25%
------- ------- ------- ------- --------------------------------- ------- ------- -------
*T
-0-
*T
3Q08 Liquids production by region 9M08
3Q08 2Q08 3Q07 vs (kb/d) 9M08 9M07 vs
3Q07 9M07
------- ------- ------- ------- --------------------------------- ------- ------- -------
288 299 313 -8% Europe 295 333 -11%
633 667 689 -8% Africa 670 680 -1%
10 11 11 -9% North America 11 14 -21%
28 27 29 -3% Far East 28 29 -3%
330 331 322 +2% Middle East 332 324 +2%
109 125 107 +2% South America 115 113 +2%
11 11 10 +10% Rest of world 12 9 +33%
------- ------- ------- ------- --------------------------------- ------- ------- -------
1,409 1,471 1,481 -5% Total production 1,463 1,502 -3%
------- ------- ------- ------- --------------------------------- ------- ------- -------
Includes equity and non-
344 366 262 +31% consolidated affiliates 350 269 +30%
------- ------- ------- ------- --------------------------------- ------- ------- -------
*T
-0-
*T
3Q08 9M08
3Q08 2Q08 3Q07 vs Gas production by region (Mcf/d) 9M08 9M07 vs
3Q07 9M07
------- ------- ------- ------- --------------------------------- ------- ------- -------
1,442 1,639 1,710 -16% Europe 1,618 1,837 -12%
621 667 630 -1% Africa 659 604 +9%
12 19 32 -63% North America 18 36 -50%
1,210 1,210 1,251 -3% Far East 1,222 1,247 -2%
552 548 384 +44% Middle East 560 326 +72%
569 610 669 -15% South America 589 625 -6%
65 79 65 - Rest of world 77 32 +141%
------- ------- ------- ------- --------------------------------- ------- ------- -------
4,471 4,772 4,741 -6% Total production 4,743 4,707 +1%
------- ------- ------- ------- --------------------------------- ------- ------- -------
Includes equity and non-
290 281 289 - consolidated affiliates 293 286 +2%
------- ------- ------- ------- --------------------------------- ------- ------- -------
*T
-0-
*T
3Q08 9M08
3Q08 2Q08 3Q07 vs Liquefied natural gas 9M08 9M07 vs
3Q07 9M07
------- ------- ------- ------- --------------------------------- ------- ------- -------
2.32 2.21 2.31 - LNG sales (Mt)* 6.90 6.74 +2%
------- ------- ------- ------- --------------------------------- ------- ------- -------
*T
* sales , Group share, excluding trading ; estimated volumes for Bontang in
Indonesia based on 2007 SEC coefficient. ; 1 Mt/y = approx. 133 Mcf/d.
-- Downstream
-0-
*T
3Q08 Refined products sales by region 9M08
3Q08 2Q08 3Q07 vs (kb/d)* 9M08 9M07 vs
3Q07 9M07
------- ------- ------- ----- ------------------------------------ ------- ------- -----
2,161 1,999 2,305 -6% Europe 2,102 2,265 -7%
279 280 292 -4% Africa 279 286 -2%
136 220 194 -30% Americas** 170 189 -10%
147 143 148 -1% Rest of world 145 144 +1%
------- ------- ------- ----- ------------------------------------ ------- ------- -----
2,723 2,642 2,939 -7% Total consolidated sales 2,696 2,884 -7%
------- ------- ------- ----- ------------------------------------ ------- ------- -----
992 956 790 +26% Trading 964 878 +10%
------- ------- ------- ----- ------------------------------------ ------- ------- -----
------- ------- ------- ----- ------------------------------------ ------- ------- -----
3,715 3,598 3,729 - Total refined product sales 3,660 3,762 -3%
------- ------- ------- ----- ------------------------------------ ------- ------- -----
*T
* includes share of CEPSA.
** third quarter 2007 restated to reflect a change in the method of calculating
volumes for Port Arthur.
Adjustment items
-- Adjustments to operating income from business segments
-0-
*T
3Q08 2Q08 3Q07 in millions of euros 9M08 9M07
-------- ------- ------- --------------------------------------------- ------- -------
Special items affecting operating income from
- - - the business segments - -
-------- ------- ------- --------------------------------------------- ------- -------
- - - = Restructuring charges - -
- - - = Impairments - -
- - - = Other - -
-------- ------- ------- --------------------------------------------- ------- -------
Pre-tax inventory effect : FIFO vs.
(1,193) 1,687 210 replacement cost 869 1,103
-------- ------- ------- --------------------------------------------- ------- -------
-------- ------- ------- --------------------------------------------- ------- -------
Total adjustments affecting operating income
(1,193) 1,687 210 from the business segments 869 1,103
-------- ------- ------- --------------------------------------------- ------- -------
*T
-- Adjustments to net income (Group share)
-0-
*T
3Q08 2Q08 3Q07 in millions of euros 9M08 9M07
-------- ------- ------- --------------------------------------------- ------- -------
Special items affecting net income (Group
(190) (67) 55 share) (112) (45)
-------- ------- ------- --------------------------------------------- ------- -------
= Equity share of special items recorded by
- - 75 Sanofi-Aventis - 75
50 2 - = Gain on asset sales 197 -
(4) (44) (20) = Restructuring charges (48) (20)
(34) - - = Impairments (34) -
(202) (25) - = Other (227) (100)
-------- ------- ------- --------------------------------------------- ------- -------
Adjustment related to the Sanofi-Aventis
merger* (share of amortization of intangible
(78) (78) (77) assets) (227) (225)
-------- ------- ------- --------------------------------------------- ------- -------
After-tax inventory effect : FIFO vs.
(752) 1,154 139 replacement cost 676 755
-------- ------- ------- --------------------------------------------- ------- -------
-------- ------- ------- --------------------------------------------- ------- -------
(1,020) 1,009 117 Total adjustments to net income 337 485
-------- ------- ------- --------------------------------------------- ------- -------
*T
* based on Total's share in Sanofi-Aventis of 12.4% at 9/30/2008 and 13.2% at
9/30/2007 and 6/30/2008.
Investments - Divestments
-0-
*T
3Q08 9M08
3Q08 2Q08 3Q07 vs in millions of euros vs
3Q07 9M08 9M07 9M07
------- ------- ------- ----- ------------------------------------ ------- ------- -----
2,774 2,091 2,456 +13% Investments excluding acquisitions* 7,363 7,252 +2%
212 205 234 -9% -- Capitalized exploration 589 637 -8%
-- Net investments in equity
na affiliates and non-consolidated na
(56) (522) 52 companies (466) 116
------- ------- ------- ----- ------------------------------------ ------- ------- -----
421 47 94 x4.5 Acquisitions 516 161 x3.2
------- ------- ------- ----- ------------------------------------ ------- ------- -----
524 120 43 x12.2 Asset sales 719 216 x3.3
------- ------- ------- ----- ------------------------------------ ------- ------- -----
2,653 2,142 2,481 +7% Net investments** 7,240 7,119 +2%
------- ------- ------- ----- ------------------------------------ ------- ------- -----
*T
* includes net investments in equity affiliates and non-consolidated companies.
** net investments = investments including acquisitions and net investments in
equity affiliates and non-consolidated companies - asset sales + net financing
for employees related to stock purchase plans.
Net-debt-to-equity ratio
-0-
*T
in millions of euros 9/30/2008 6/30/2008 9/30/2007
------------------------------------------- ------------ ------------ ------------
Current borrowings 5,378 4,795 9,194
Net current financial assets (230) (49) (10,870)
Non-current financial debt 16,347 14,777 15,103
Hedging instruments of non-current debt (406) (540) (434)
Cash and cash equivalents (13,231) (7,245) (2,812)
------------------------------------------- ------------ ------------ ------------
Net debt 7,858 11,738 10,181
------------------------------------------- ------------ ------------ ------------
------------------------------------------- ------------ ------------ ------------
Shareholders equity 50,801 48,273 42,818
Estimated dividend payable* (920) (2,315) (906)
Minority interests 1,001 855 851
------------------------------------------- ------------ ------------ ------------
Equity 50,882 46,813 42,763
------------------------------------------- ------------ ------------ ------------
------------------------------------------- ------------ ------------ ------------
Net-debt-to-equity ratio 15.4% 25.1% 23.8%
------------------------------------------- ------------ ------------ ------------
*T
* for 9/30/2008, based on a 2008 dividend equal to the 2007 dividend of 2.07 EUR
/share, after deducting the interim dividend of 1.14 EUR per share approved by
the Board of Directors on September 9, 2008.
Effective tax rates
-0-
*T
3Q08 2Q08 3Q07 Average tax rates* 9M08 9M07
-------- -------- -------- ------------------------------------ --------- ---------
61.7% 61.2% 59.3% Upstream 61.8% 59.8%
55.9% 57.8% 55.1% Group 57.6% 54.4%
-------- -------- -------- ------------------------------------ --------- ---------
*T
* tax on adjusted net operating income / (adjusted net operating income - income
from affiliates, dividends received from investments, and impairments of
acquisition goodwill + tax on adjusted net operating income).
2008 Sensitivities*
-0-
*T
Impact on adjusted Impact on adjusted
Scenario Change operating net operating
income(e) income(e)
-------------------- --------- ------------ ------------------ -------------------
EUR -$ 1.50 +0.1 $ per -1.5 BEUR -0.8 BEUR
$/EUR EUR
-------------------- --------- ------------ ------------------ -------------------
Brent 80 $/b +1 $/b +0.28 BEUR / 0.42 +0.12 BEUR / 0.18
B$ B$
-------------------- --------- ------------ ------------------ -------------------
European refining 33 $/t +1 $/t +0.08 BEUR / 0.12 +0.05 BEUR / 0.08
margins TRCV B$ B$
-------------------- --------- ------------ ------------------ -------------------
*T
* sensitivities revised once per year upon publication of the previous year
fourth quarter results. The impact of the EUR -$ sensitivity on the adjusted
operating income and the adjusted net operating income attributable to the
Upstream segment are approximately 70% and 60% respectively, and the remaining
impact of the EUR -$ sensitivity is essentially split between the Downstream and
Chemicals segments.
Return on average capital employed
-- For the twelve months ended September 30, 2008
-0-
*T
in millions of euros Upstream Downstream Chemicals** Segments Group***
------------------------- --------- ------------ ------------ ---------- ---------
Adjusted net operating
income 11,298 2,345 578 14,221 14,915
Capital employed at
9/30/2007* 26,863 11,446 7,305 45,614 53,243
Capital employed at
9/30/2008* 30,184 12,649 8,107 50,940 58,165
------------------------- --------- ------------ ------------ ---------- ---------
ROACE 39.6% 19.5% 7.5% 29.5% 26.8%
------------------------- --------- ------------ ------------ ---------- ---------
*T
* at replacement cost (excluding after-tax inventory effect).
** capital employed for Chemicals reduced for the Toulouse-AZF provision of 139
MEUR pre-tax at 9/30/2007 and 121 MEUR pre-tax at 9/30/2008.
*** capital employed for the Group adjusted for the amount payable for the
interim dividend approved in September 2008 (2,545 MEUR ).
-- For the twelve months ended June 30 2008
-0-
*T
in millions of euros Upstream Downstream Chemicals** Segments Group
------------------------ --------- ------------ ------------ ---------- ----------
Adjusted net operating
income 10,626 1,970 562 13,158 13,810
Capital employed at
6/30/2007* 25,218 11,204 7,264 43,686 52,645
Capital employed at
6/30/2008* 26,676 13,491 7,394 47,561 56,107
------------------------ --------- ------------ ------------ ---------- ----------
ROACE 41.0% 16.0% 7.7% 28.8% 25.4%
------------------------ --------- ------------ ------------ ---------- ----------
*T
* at replacement cost (excluding after-tax inventory effect).
** capital employed for Chemicals reduced for the Toulouse-AZF provision of 146
MEUR pre-tax at 6/30/2007 and 126 MEUR pre-tax at 6/30/2008.
-- For the twelve months ended September 30, 2007
-0-
*T
in millions of euros Upstream Downstream Chemicals** Segments Group***
------------------------ --------- ------------ ------------ ---------- ----------
Adjusted net operating
income 8,165 2,538 1,015 11,718 12,434
Capital employed at
9/30/2006* 24,561 11,431 7,257 43,249 50,371
Capital employed at
9/30/2007* 26,863 11,446 7,305 45,614 53,243
------------------------ --------- ------------ ------------ ---------- ----------
ROACE 31.8% 22.2% 13.9% 26.4% 24.0%
------------------------ --------- ------------ ------------ ---------- ----------
*T
* at replacement cost (excluding after-tax inventory effect).
** capital employed for Chemicals reduced for the Toulouse-AZF provision of 85
MEUR pre-tax at 9/30/2006 and 139 MEUR pre-tax at 9/30/2007.
*** capital employed for the Group adjusted for the amount payable for the
interim dividend approved in September 2007 (2,252 MEUR ).
(1) percent changes are relative to the same period 2007.
(2) dollar amounts represent euro amounts converted at the average EUR -$
exchange rate for the period : 1.5050 $/EUR in the third quarter 2008, 1.3738
$/EUR in the third quarter 2007, 1.5622 $/EUR in the second quarter 2008, 1.5217
$/EUR in the first nine months of 2008, and 1.3443 $/EUR in the first nine
months of 2007.
(3) adjusted net income = net income using replacement cost (Group share)
adjusted for special items and excluding Total's share of amortization of
intangibles related to the Sanofi-Aventis merger. Net income (Group share) for
the third quarter 2008 was 3,050 MEUR , a decrease of 2% compared to the third
quarter 2007.
(4) adjusted income (adjusted operating income, adjusted net operating income
and adjusted net income) is defined as income using replacement cost, adjusted
for special items and excluding Total's equity share of amortization of
intangibles related to the Sanofi-Aventis merger; adjusted cash flow is defined
as cash flow from operating activities at replacement cost before changes in
working capital; adjustment items are listed on page 17.
(5 )dollar amounts represent euro amounts converted at the average EUR -$
exchange rate for the period.
(6) there were no special items affecting operating income from the business
segments in the third quarters of 2007 and 2008.
(7) defined as : (tax on adjusted net operating income) / (adjusted net
operating income - income from equity affiliates, dividends received from
investments and impairments of acquisition goodwill + tax on adjusted net
operating income).
(8) detail shown on page 17.
(9) net investments = investments including acquisitions and net investments in
equity affiliates and non-consolidated companies - asset sales + net financing
for employees related to stock purchase plans.
(10) adjusted cash flow = cash flow from operating activities at replacement
cost before changes in working capital.
(11) net cash flow = cash flow from operating activities + divestments -
investments.
(12) there were no special items affecting operating income from the business
segments in the first nine months of 2008 and 2007.
(13) detail shown on page 17.
(14) net investments = investments including acquisitions and net investments in
equity affiliates and non-consolidated companies - asset sales + net financing
for employees related to stock purchase plans.
(15) adjusted cash flow = cash flow from operations at replacement cost before
changes in working capital.
(16) net cash flow = cash flow from operations + divestments - investments.
(17) detail shown on page 18.
(18) impact of changing hydrocarbon prices on entitlement volumes.
(19) calculated based on adjusted net operating income and average capital
employed, using replacement cost, as shown on page 19.
(20) calculated based on adjusted net operating income and average capital
employed, using replacement cost, as shown on page 19.
(21) calculated based on adjusted net operating income and average capital
employed, using replacement cost, as shown on page 19.
(22) calculated based on adjusted net operating income and average capital
employed, using replacement cost, as shown on page 19.
(23) approved by the Board of Directors on September 9, 2008
(24) the ex-dividend date for the interim dividend on 2008 shares will be
November 14, 2008
(25) based on 1 EUR = $1.50 for 2008, includes net investments in equity
affiliates and non-consolidated companies, excludes acquisitions
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