Interim Results

Total S.A. 6 August 2003 2, place de la Coupole La Defense 6 92 400 Courbevoie France Fax: 33 (1)47 44 68 21 Higher second quarter 2003 results despite weaker dollar versus the euro Catherine ENCK Upstream production growth 5% Tel. 33(1)47 44 37 76 Patricia MARIE Net income excluding non-recurring items Tel. 33 (1)47 44 45 90 2nd Quarter 2003 1st Half 2003 Paul FLOREN Tel. :33 (1)47 44 45 91 1.77 billion euros (+8%) 3.89 billion euros (+27%) 2.77 euros per share (+14%) 6.05 euros per share (+33%) Christine de CHAMPEAUX Tel:33 (1)47 44 47 49 Laurence FRANCISCO Tel.: 33 (1)47 44 51 04 Net income Sarah WACHTER 2nd Quarter 2003 1st Half 2003 Tel.: 33 (1)47 44 42 30 1.61 billion euros (+7%) 3.73 billion euros (+27%) 2.52 euros per share (+13%) 5.80 euros per share (+33%) Sophie LE CONG NEN-ALIOT Tel.: 33 (1)47 44 48 00 Isabelle CABROL Tel.: 33 (1)47 44 64 24 Charles-Edouard ANFRAY Tel.: 33 (1)47 44 65 55 Franklin BOITIER Tel.:33 (1)47 44 59 81 TOTAL S.A. Capital 6 772 905 100 euros 542 051 180 R.C.8. Nanterre www.total.com Paris, August 6, 2003 - Total's net income excluding non-recurring items rose by 8% in the second quarter 2003 compared to the same quarter last year. The market environment was marked by the sharp decline in the dollar relative to the euro, slightly higher oil prices, a rebound in refining margins and continued weak conditions in the Chemicals segment. Commenting on the results, Chairman and CEO Thierry Desmarest said: <> Total consolidated accounts 2Q03 2Q02 % in millions of euros 1H03 1H02 % 24,347 26,435 -8% Sales 52,650 50,219 +5% 2,937 2,845 +3% Operating income from business 6,856 5,277 +30% segments (excluding non-recurring items) 1,719 1,526 +13% Net operating income from business 3,770 2,882 +31% segments (excluding non-recurring items) 1,767 1,632 +8% Net income 3,887 3,051 +27% excluding non-recurring items 1,605 1,503 +7% Net income 3,725 2,932 +27% 2.77 2.42 +14% Earnings per share (euros) 6.05 4.54 +33% excluding non-recurring items 2.52 2.23 +13% Earnings per share (euros) 5.80 4.37 +33% 1,508 2,100 -28% Investments 3,002 4,209 -29% 157 463 -66% Divestments at selling price 1,150 1,049 +10% 3,134 2,850 +10% Cash flow from operating activities 6,956 5,308 +31% Non-recurring items 2Q03 2Q02 in millions of euros 1H03 1H02 Impact of non-recurring items on operating income - (16) Restructuring charges - (16) - (21) Impairments - (21) - (9) Other - - (9) - (46) Total - (46) Impact of non-recurring items on net income 30 134 Gain on asset sales 30 277 - (47) Toulouse-AZF impact - (149) (34) (45) Restructuring charges and (34) (76) early retirement plans - (14) Impairments - (14) (158)* (157)** Other (158)* (157)** (162) (129) Total (162) (119) * includes (155) M€ provision for Chemicals ** includes (151) M€ related to changes in the UK tax regime Number of shares 2Q03 2Q02 % millions 1H03 1H02 % 637.8 673.0 -5% Fully-diluted weighted- 642.1 671.7 -4% average shares Market environment 2Q03 2Q02 % 1H03 1H02 % 1.14 0.92 -19%* €/$ 1.10 0.90 -18%* 26.0 25.0 +4% Brent ($/b) 28.7 23.1 +24% 17.6 4.9 x3.6 European refining margins TRCV ($/t) 24.9 3.6 x6.9 *change in the dollar versus the euro Second Quarter 2003 results Consolidated sales declined by 8% to 24,347 million euros (M€) in the second quarter 2003 from 26,435 M€ in the second quarter 2002. Compared to the same quarter last year, the second quarter 2003 oil market environment has been favorable: oil prices were slightly higher and European refining margins were much stronger than the unusually low margins of last year. However, the sharp decline of the dollar relative to the euro more than offset these positive impacts. Despite the slight improvement in petrochemical margins, weak economic conditions around the world continued to depress the overall environment for Chemicals. Within this context, operating income from the business segments excluding non-recurring items increased by 3% to 2,937 M€ in the second quarter 2003 from 2,845 M€ In the second quarter 2002. Net operating income from the business segments excluding non-recurring items rose by 13% to 1,719 M€ in the second quarter 2003 from 1,526 M€ in the same quarter last year. This larger increase relative to operating income is due primarily to higher income contributions from equity affiliates. Net income excluding non-recurring items rose by 8% to 1,767 M€ in the second quarter 2003 from 1,632 M€ In the second quarter 2002. Reported net income was 1,605 M€ in the second quarter 2003 compared to 1,503 M€ in the second quarter 2002. These results include the impacts of non-recurring items representing a net negative 162 M€ in the second quarter 2003 and a net negative 129 M€ in the second quarter 2002. The non-recurring items that had a positive impact in the second quarter 2003 include gains on the sale of Sanofi-Synthelabo shares1, while the negative impacts include, in the Chemicals segment, a restructuring charge and a 155 M€ provision related to investigations of anti-trust practices by the European Commission. 1 As of June 30, 2003, the Group owns 24.4% of Sanofi-Synthelabo. Second quarter 2003 earnings per share excluding non-recurring items, based on 637.8 million fully-diluted weighted-average shares, was 2.77 euros, an increase of 14% compared to 2.42 euros in the second quarter 2002. During the second quarter 2003, Total bought back 7.5 million of its shares for 0.96 billion euros. The number of fully-diluted shares at June 30, 2003 was 634.7 million. The net-debt-to-equity ratio was 27.1% at June 30, 2003 compared to 22.1% at March 31, 2003. Cash flow from operating activities rose to 3,134 M€ in the second quarter 2003, a 10% increase from the same quarter last year. During the second quarter 2003 investments were 1,508 M€, 28% less than in the same quarter last year. This decrease in investments, which are denominated in euros, is due primarily to the depreciation of the dollar. Divestments in the second quarter 2003, based on selling price, were 157 M€. Free cash flow2 rose in the second quarter 2003 to 1,783 M€ from 1,213 M€ in the second quarter 2002. Upstream Operating income from the Upstream segment excluding non-recurring items was slightly lower at 2,297 M€ in the second quarter 2003 compared to 2,325 M€ in the second quarter 2002. The positive impact of production growth and higher hydrocarbon prices nearly offset the negative impact of the depreciation of the dollar relative to the euro. Net operating income from the Upstream segment excluding non-recurring items rose by 1% to 1,218 M€ in the second quarter 2003. Hydrocarbon production grew by 5% to 2,509 thousand barrels of oil equivalent per day (kboe/d) in the second quarter 2003 from 2,387 kboe/d in the second quarter 2002. Liquids production rose by 7% in the second quarter 2003 to 1,681 thousand barrels per day (kb/d) from 1,576 kb/d in the second quarter of last year. The growth stemmed primarily from higher production at Sincor in Venezuela and from start-ups in Iran and Algeria. Gas production increased by 2% in the second quarter 2003 to 4,522 million cubic feet per day (Mcfd) from 4,443 Mcfd in the second quarter 2002. The main contributors to this increase were fields in the Gulf of Mexico, Indonesia and Nigeria. Exploration & Production highlights for the quarter included launching the development of the Dalia field in Angola, a major step in the ongoing development of Block 17 (Total-operated 40%), where 15 discoveries have been made thus far. The Gindungo-1 well, a promising initial discovery, was drilled on the neighboring ultra-deep Block 32 (Total-operated 30%). In Gabon, the Rabi-Kounga license was extended for an initial period of ten years, setting the stage for a new investment program designed to improve the recovery of its reserves. In Nigeria, the appraisal of offshore block OPL 222 (Usan and Ukot) yielded positive results. In the Gulf of Mexico, Total was awarded four deep-water exploration blocks. 2free cash flow = cash flow from operations + divestments - investments In the UK North Sea, Total made a gas discovery on West Franklin. In addition, the development of the Nuggets N4 gas field (Total-operated 100%) was approved by the UK authorities. In the Caspian Sea, Total exercised its preemption right to increase its share in the Kashagan field to 20.4% from 16.7%. Gas and power activities included the commissioning of the Taweelah A1 power and desalination plant in Abu Dhabi. 2Q03 2Q02 % Upstream - key figures 1H03 1H02 % 2,509 2,387 +5% Hydrocarbon production (kboe/d) 2,513 2,394 +5% 1,681 1,576 +7% • Liquids (kb/d) 1,647 1,567 +5% 4,522 4,443 +2% • Gas (Mcfd) 4,723 4,524 +4% 2,297 2,325 -1% Operating income (M€) 5,322 4,341 +23% excluding non-recurring items 1,218 1,201 +1% Net operating income (M€) 2,623 2,267 +16% excluding non-recurring items 1,130 1,556 -27% Investments (M€) 2,296 3,199 -28% 44 106 -58% Divestments (M€) 224 329 -32% at selling price 1,884 1,705 +10% Cash flow from operating 4,455 3,397 +31% activities (M€) Downstream Operating income from the Downstream segment excluding non-recurring items increased by 64% to 456 M€ in the second quarter 2003. The strong increase was due primarily to a rebound in European refining margins coinciding with low refined product inventories in the Atlantic Basin. Retail marketing benefited from improved conditions, notably in the UK. Ongoing self-help programs also contributed to the improvement. Net operating income from the Downstream segment excluding non-recurring items rose by 86% in the second quarter 2003 compared to the second quarter 2002. The higher percentage increase than for operating income is due to the large increase in the contribution of Cepsa, an equity affiliate company. Refined product volumes decreased by 2% to 2,383 kb/d in the second quarter 2003 from 2,435 kb/d in the second quarter 2002. Refinery throughput levels have been affected by a major turnaround at the Donges refinery as well as additional work during the quarter to follow up on some of last year's major turnarounds. During the second quarter, Total announced that it was launching studies to evaluate a 500 M€ investment for the construction of an hydrocracker unit and an associated steam methane reformer to supply hydrogen at the Normandy refinery. This will enable the Normandy refinery to better respond to growing European demand for distillates (diesel and jet fuel) and reduce its production of heavy fuels. Also during the second quarter 2003, Total launched its new corporate identity program and began re-branding the network, storage facilities and production sites with the new Total logo. 2Q03 2Q02 % Downstream - key figures 1H03 1H02 % 2,383 2,435 -2% Refinery throughput* (kb/d) 2,409 2,422 -1% 456 278 +64% Operating income (M€) 1,235 573 +116% excluding non-recurring items 406 218 +86% Net operating income (M€) 991 468 +112% excluding non-recurring items 194 228 -15% Investments (M€) 319 360 -11% 13 47 -72% Divestments (M€) 57 82 -30% at selling price 1,483 805 +84% Cash flow from operating 3,043 1,386 +120% activities (M€) *includes shares of Cepsa Chemicals Sales for the Chemicals segment fell by 19% to 4,190 M€ in the second quarter 2003 from 5,157 in the second quarter 2002. Adjusting the comparison to exclude the paints business, which was sold in February 2003, the decrease in sales would have been limited to 11%. Operating income from the Chemicals segment excluding non-recurring items was 184 M€ in the second quarter 2003 compared to 242 M€ in the second quarter 2002, or a decrease of 24%. Adjusting for the divested paints business, the decrease would have been 8%. The base chemicals & polymers sector benefited from slightly better steam cracker margins but suffered from overall weak demand for polymers. Compared to the second quarter 2002, the Intermediates were hurt by weak product demand worldwide, notably for fluoride and thiochemicals while the Specialties resisted the weaker market environment. Implementing self-help programs partially offset the negative impact of the weak market environment. Net operating income from the Chemicals segments excluding non-recurring items was 95 M€ in the second quarter 2003, an 11% decrease compared to the same quarter last year. Adjusting for the divested paints business, there would have been a 13% improvement. The second quarter 2003 highlight was the signing of the joint-venture agreement between Total and Samsung for the Daesan petrochemical site in South Korea. The closing occured on August 1. 2Q03 2Q02 % Chemicals - key figures (M€) 1H03 1H02 % 4,190 5,157 -19% Sales 8,743 9,905 -12% 184 242 -24% Operating Income 299 363 -18% excluding non-recurring items 95 107 -11% Net operating Income 156 147 +6% excluding non-recurring items 160 284 -44% Investments 335 540 -38% 32 9 ns Divestments 787 41 ns at selling price (104)* 48 ns Cash flow from operating activities (185)** 38 ns the paints business was sold in February 2003 * positive cash flow from operating activities of 46 M€ excluding disbursements of 150 M€ related to the Toulouse-AZF reserve ** positive cash flow from operating activities of 147 M€ excluding disbursements of 332 M€ related to the Toulouse-AZF reserve First half 2003 results Compared to the first half 2002, the first half 2003 market environment was overall more favorable: the Brent oil price increased by 24% and European refining margins rebounded strongly, more than offsetting the negative impact of the 18% drop in the value of the dollar relative to the euro. The environment for the Chemicals was mixed: base chemical margins improved due to higher margins for steam crackers, but weak economies worldwide hurt product demand across all of the Chemicals sectors. In this context, operating income from the business segments excluding non-recurring items increased by 30% to 6,856 M€ in the first half 2003 from 5,277 M€ in the first half 2002. This 1.6 billion euro increase reflects a net positive 1.2 billion euro impact from changes in the market environment, a positive 0.5 billion euro impact from growth and self-help programs, and a negative 0.1 billion euro impact related to the absence of the divested paints business. The overall positive impact of the changes in the market environment breaks down as follows: • + 1.4 billion euros, higher hydrocarbon prices, • + 1.1 billion euros, higher refining margins, • - 1.2 billion euros, depreciation of the dollar against the euro, • - 0.1 billion euros, weaker Chemicals environment. Net operating income from the business segments excluding non-recurring items increased by 31% to 3,770 M€ in the first half 2003 from 2,882 M€ in the first half 2002. Net income excluding non-recurring items rose by 27% to 3,887 M€ in the first half 2003 compared to the same period last year. Earnings per share excluding non-recurring items, based on 642.1 million fully-diluted weighted-average shares for the first half 2003, was 6.05 euros, an increase of 33% compared to the 4.54 euros in the first half 2002. The higher percentage increase for the earnings per share reflects the accretive impact of the company's ongoing buyback program. During the first half 2003, Total repurchased 20.6 million shares for 2.55 billion euros. Reported net income increased to 3,725 M€ in the first half 2003 from 2,932 M€ in the first half 2002. These results include non-recurring items with a net negative impact of 162 M€ for the first half 2003 and a net negative impact of 119 M€ for the first half 2002. Hydrocarbon production increased by 5% in the first half 2003 to 2,513 kboe/d from 2,394 kboe/d in the first half 2002. Refinery throughput decreased by 1% to 2,409 kb/d in the first half 2003 from 2,422 kb/d in the first half 2002. Sales for the Chemicals segment fell by 12% to 8,743 M€ in the first half 2003 from 9,905 M€ in the first half 2002. In the first half 2003, investments were 3,002 M€ (76% allocated to Upstream), reflecting a decrease of 29% from the level of investments in the first half 2002. The decrease in Investments, which are denominated in euros, is due primarily to the depreciation of the dollar. Divestments for the first half 2003, based on selling price, amounted to 1,150 M€ and are comprised mainly of the proceeds from the sale of the paints business. Free cash flow Increased to 5,104 M€ In the first half 2003 from 2,148 M€ in the first half 2002. Summary and outlook The return on average capital employed (ROACE) calculated for the period July 1, 2002 to June 30, 2003 was 18%. The return on equity (ROE) calculated for the same twelve month period was 23.5%. Since the start of the third quarter, the market environment has remained largely comparable to that of the second quarter with the euro-dollar exchange rate unchanged, slightly higher oil prices, lower refining margins and continued weak conditions for the Chemicals. The investment program is progressing satisfactorily. For the year, the investment program should be in line with the budget, taking into account the weaker-than-budgeted dollar. Total is continuing to buy back shares and in July 2003 bought back 1.95 million shares for 0.25 billion euros. Growth and self-help programs are on track to achieve the announced objectives. The level of oil and gas production in the first half 2003 and the sustained pace of activity in the Upstream segment, notably the start-up of the Amenam field in Nigeria, allows confirmation of the targeted 5% growth rate for hydrocarbon production for 2003 versus 2002. The June 30, 2003 notes to the consolidated accounts are available on the Total web site (www.total.com). These accounts have been the subject of a limited review by the company's auditors. 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. 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. 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 Commission des Operations de Bourse and the US Securities and Exchange Commission. Total 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. To access the conference call in listen-only mode with Robert Castaigne, CFO of Total, today at 5:00 p.m (Paris time), please dial +44 (0) 207 162 0025 from Europe or 1-334-323-6201 from the US (access code: Total). For a replay, please dial +44 (0) 208 288 4459 from Europe (access code: 320 542) or 1-334-323-6222 from the US (access code: 320 542). OPERATING INFORMATION BY SEGMENT FOR THE SECOND QUARTER AND FIRST HALF 2003 Upstream Combined liquids and gas production by region 2Q03 2Q02 % in kboe/d 1H03 1H02 % 832 889 -6% Europe 897 889 +1% 716 662 +8% Africa 698 672 +4% 57 43 +33% North America 60 42 +43% 229 212 +8% Far East 222 220 +1% 461 389 +19% Middle East 457 400 +14% 208 187 +11% South America 173 166 +4% 6 5 +20% Rest of world 6 5 +20% 2,509 2,387 +5% Total 2,513 2,394 +5% Liquids production by region 2Q03 2Q02 % in kboe/d 1H03 1H02 % 451 472 -4% Europe 471 464 +2% 638 594 +7% Africa 623 600 +4% 4 5 -20% North America 4 5 -20% 25 22 +14% Far East 24 23 +4% 411 350 +17% Middle East 403 358 +13% 146 128 +14% South America 116 112 +4% 6 5 +20% Rest of world 6 5 +20% 1,681 1,576 +7% Total 1,647 1,567 +5% Gas production by region 2Q03 2Q02 % in Mcfd 1H03 1H02 % 2,072 2,266 -9% Europe 2,316 2,315 - 413 363 +14% Africa 399 381 +5% 289 203 +42% North America 303 199 +52% 1,148 1,091 +5% Far East 1,113 1,124 -1% 263 202 +30% Middle East 281 215 +31% 337 318 +6% South America 311 290 +7% - - - Rest of world - - - 4,522 4,443 +2% Total 4,723 4,524 +4% Downstream Refinery throughput by region 2Q03 2Q02 % in kb/d 1H03 1H02 % 885 931 -5% France 893 921 -3% 1,184 1,203 -2% Rest of Europe 1,214 1,202 +1% 314 301 +4% Rest of world 302 299 +1% 2,383 2,435 -2% Total refinery throughput* 2,409 2,422 -1% * includes share of Cepsa Chemicals 2Q03 2Q02 % Chemicals-key figures (B€) 1S03 1S02 % 4.19 5.16 -19% Sales 8.74 9.91 -12% 1.77 2.00 -12% •Base chemicals & polymers 3.90 3.79 +3% 0.95 1.04 -9% •Intermediates 1.89 2.01 -6% 1.47 2.11 -30% •Specialties* 2.95 4.08 -28% - 0.01 ns •Corporate - Chemicals - 0.03 ns 0.18 0.24 -25% Operating income** 0.30 0.36 -17% 0.05 0 ns •Base chemicals & polymers 0.03 (0.07) ns 0.05 0.09 -44% •Intermediates 0.10 0.18 -44% 0.11 0.17 -35% •Specialties* 0.21 0.30 -30% (0.03) (0.02) ns •Corporate - Chemicals (0.04) (0.05) ns * the paints business was sold in February 2003 ** excluding non-recurring items Total financial statements Second quarter and first half 2003 consolidated accounts, French GAAP CONSOLIDATED STATEMENTS OF INCOME Total 2nd quarter 2nd quarter 1st half 1st half 2003 2002 Amounts in millions of euros (1) 2003 2002 (unaudited) (unaudited) (unaudited) (unaudited) 24 347 26,435 Sales 52,650 50,219 (20,298) (22,352) Operating expenses (43,508) (42,474) (1,179) (1,324) Depreciation, depletion, and amortization (2,408) (2,620) Operating income (67) (40) Corporate (122) (106) 2,937 2,799 Business segments * 6,856 5,231 2,870 2,759 Total operating income 6,734 5,125 (42) (32) Interest, expense, net (84) (67) 71 78 Dividend income on non-consolidated subsidiaries 76 84 (1) (3) Dividends on subsidiaries' redeemable preferred shares (3) (5) (231) 33 Other income (expense), net (494) 19 (1,254) (1,437) Provision for income taxes (2,851) (2,486) 275 174 Equity in income (loss) of affiliates 526 415 1,688 1,572 Income before amortization of acquisition goodwill 3,904 3,085 (36) (48) Amortization of acquisition goodwill (66) (84) 1,652 1,524 Consolidated net income 3,838 3,001 47 21 of which minority interest 113 69 1,605 1,503 NET INCOME ** 3,725 2,932 2.52 2.23 Earnings per share (euro)*** 5.80 4.37 2,937 2,845 Operating income from business segments, excluding 6,856 5,277 non-recurring items 1,719 1,526 Net operating income from business segments, excluding 3,770 2,882 non-recurring items 1,767 1,632 **Net income (Group share), excluding non-recurring items 3,887 3,051 2.77 2.42 ***Earnings per share, excluding non-recurring items (euro) 6.05 4.54 (1) Except for earnings per share CONSOLIDATED BALANCE SHEETS Total Amounts in millions of euros June 30, 2003 March 31, 2003 December 31, 2002 June 30, 2002 (unaudited) (unaudited) (unaudited) ASSETS NON-CURRENT ASSETS : Intangible assets, net 2,205 2,248 2,752 2,977 Property, plant, and equipment, net 36,661 37,773 38,592 39,273 Equity affiliates: investments and loans 7,738 7,857 7,710 7,605 Other investments 1,235 1,221 1,221 1,180 Other non-current assets 3,669 3,851 3,735 2,916 Total non-current assets 51,508 52,950 54,010 53,951 CURRENT ASSETS : Inventories, net 5,980 5,982 6,515 6,397 Accounts receivable, net 12,418 13,498 13,087 14,079 Prepaid expenses and other current assets 4,950 4,637 5,243 5,917 Short-term investments 1,663 1,489 1,508 1,283 Cash and cash equivalents 9,532 13,117 4,966 3,863 Total current assets 34,543 38,723 31,319 31,539 TOTAL ASSETS 86,051 91,673 85,329 85,490 LIABILITIES & SHAREHOLDERS' EQUITY SHAREHOLDERS' EQUITY : Common shares 6,881 6,874 6,872 7,101 Paid-in surplus and retained earnings 31,776 32,689 30,514 31,382 Cumulative translation adjustment (1,946) (1,463) (830) (332) Treasury shares (6,960) (6,001) (4,410) (5,388) Total shareholders' equity 29,751 32,099 32,146 32,763 SUBSIDIARIES' REDEEMABLE PREFERRED SHARES 438 459 477 501 MINORITY INTEREST 620 715 724 795 LONG-TERM LIABILITIES : Deferred income taxes 6,106 6,121 6,390 6,427 Employee benefits 3,896 3,931 4,103 3,236 Other liabilities 6,462 6,708 6,150 5,971 Total long-term liabilities 16,464 16,760 16,643 15,634 LONG-TERM DEBT 9,906 10,728 10,157 11,000 CURRENT LIABILITIES : Accounts payable 9,256 9,961 10,236 10,137 Other creditors and accrued liabilities 10,331 10,444 9,850 11,259 Short-term borrowings and bank overdrafts 9,285 10,507 5,096 3,401 Total current liabilities 28,872 30,912 25,182 24,797 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 86,051 91,673 85,329 85,490 CONSOLIDATED STATEMENTS OF CASH FLOWS Total 2nd quarter 2nd quarter 1st half 1st half 2003 2002 Amounts in millions of euros 2003 2002 (unaudited) (unaudited) (unaudited) (unaudited) CASH FLOW FROM OPERATING ACTIVITIES 1,652 1,524 Consolidated net income 3,838 3,001 1,266 1,447 Depreciation, depletion, and amortization 2,564 2,824 240 73 Long-term liabilities, valuation allowances, and deferred taxes (166) 125 101 120 Unsuccessful exploration costs 161 244 (49) (175) (Gains)/Losses on sales of assets 155 (408) (13) 71 Equity in income of affiliates (in excess of)/less than dividends received (191) (132) 1 (13) Other changes, net 3 (11) 3,198 3,047 Cash flow from operating activities before changes in working capital 6,364 5,643 (64) (197) (Increase)/Decrease in operating assets and liabilities 592 (335) 3,134 2,850 CASH FLOW FROM OPERATING ACTIVITIES (1) 6,956 5,308 CASH FLOW FROM INVESTING ACTIVITIES (1,320) (1,733) Intangible assets and property, plant, and equipment additions (2,531) (3,350) (89) (106) Exploration expenditures charged to expenses (142) (213) 8 (50) Acquisitions of subsidiaries, net of cash acquired 8 (105) (33) (60) Investments in equity affiliates and other securities (38) (107) (74) (151) Increase in long-term loans (299) (434) (1,508) (2,100) Total expenditures (3,002) (4,209) 49 25 Proceeds from sale of intangible assets and property, plant, and equipment 126 103 2 5 Proceeds from sale of subsidiaries, net of cash sold 735 5 66 339 Proceeds from sale of non-current investments 68 652 40 94 Repayment of long-term loans 221 289 157 463 Total divestitures 1,150 1,049 (174) (317) (Increase)/Decrease in short-term investments (155) (279) (1,525) (1,954) CASH FLOW FROM INVESTING ACTIVITIES (2,007) (3,439) CASH FLOW FROM FINANCING ACTIVITIES Issuance and repayment of shares: 44 437 Parent company's shareholders 45 443 (959) (57) Share buy back (2,550) (465) 16 8 Minority shareholders 23 18 - - Subsidiaries' redeemable preferred shares - - Cash dividends paid: (2,571) (2,514) - Parent company's shareholders (2,571) (2,514) (96) (81) - Minority shareholders (108) (84) 417 245 Net issuance/( repayment) of long-term debt 1,409 1,084 (1,938) (4,222) Increase/(Decrease) in short-term borrowings and bank overdrafts 3,507 (395) (1) (3) Other changes, net (3) (5) (5,088) (6,187) CASH FLOW FROM FINANCING ACTIVITIES (248) (1,918) (3,479) (5,291) Net increase/decrease in cash and cash equivalents 4,701 (49) (106) 263 Effect of exchange rates and changes in reporting entity on cash & cash equivalents (135) 338 13,117 8,891 Cash and cash equivalents at the beginning of the year or period 4,966 3,574 9,532 3,863 CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 9,532 3,863 (1) including payments relating to the Toulouse-AZF plant explosion, offset by a long-term liability write-back of 150 million euros for the second quarter 2003, 332 million euros for the first half 2003. BUSINESS SEGMENTS INFORMATION Total (unaudited) In millions of euros 2nd quarter 2003 Upstream Downstream Chemicals Corporate Intercompany Total - Non-Group sales 4,268 15,885 4,190 4 - 24,347 - Intersegment sales 2,626 451 98 29 (3,204) - Total sales 6,894 16,336 4,288 33 (3,204) 24,347 Depreciation, depletion, and amortization of tangible assets (777) (214) (186) (2) (1,179) Operating income 2,297 456 184 (67) 2,870 Amortization of intangible assets and acquisition goodwill (5) (30) (36) (4) (75) Equity in income (loss) of affiliates and other items 95 93 (202) 188 174 Tax on net operating income (1,169) (113) (43) 51 (1,274) Net operating income 1,218 406 (97) 168 1,695 Net cost of net debt (42) Minority interests and dividends on subsidiaries' redeemable preferred shares (48) Net income 1,605 2nd quarter 2003 Upstream Downstream Chemicals Corporate Intercompany Total (non-recurring items) - Non-Group sales - Intersegment sales Total sales Depreciation, depletion, and amortization of tangible assets - - - - - Operating income - - - - - Amortization of intangible assets and acquisition goodwill - Equity in income (loss) of affiliates and other items (213) 40 (173) Tax on net operating income 21 (10) 11 Net operating income - - (192) 30 (162) Net cost of net debt - Minority interests and dividends on subsidiaries' redeemable preferred shares - Net income (162) 2nd quarter 2003 Upstream Downstream Chemicals Corporate Intercompany Total (excluding non-recurring items) - Non-Group sales 4,268 15,885 4,190 4 - 24,347 - Intersegment sales 2,626 451 98 29 (3,204) - Total sales 6,894 16,336 4,288 33 (3,204) 24,347 Depreciation, depletion, and amortization of tangible assets (777) (214) (186) (2) (1,179) Operating income 2,297 456 184 (67) 2,870 Amortization of intangible assets and acquisition goodwill (5) (30) (36) (4) (75) Equity in income (loss) of affiliates and other items 95 93 11 148 347 Tax on net operating income (1,169) (113) (64) 61 (1,285) Net operating income 1,218 406 95 138 1,857 Net cost of net debt (42) Minority interests and dividends on subsidiaries' redeemable preferred shares (48) Net income 1,767 2nd quarter 2003 Upstream Downstream Chemicals Corporate Intercompany Total Gross expenditures 1,130 194 160 24 1,508 Divestitures at selling price 44 13 32 68 157 Cash flow from operating activities (1) 1,884 1,483 (104) (129) 3,134 (1) In the Chemicals segment, this figure amounts to 46 million euros excluding an amount of 150 million euros paid relating to the Toulouse- AZF plant explosion, offset by a long-term liability write-back. BUSINESS SEGMENTS INFORMATION Total (unaudited) In millions of euros 2nd quarter 2002 Upstream Downstream Chemicals Corporate Intercompany Total - Non-Group sales 3,888 17,387 5,157 3 - 26,435 - Intersegment sales 2,843 368 106 29 (3,346) - Total sales 6,731 17,755 5,263 32 (3,346) 26,435 Depreciation, depletion, and amortization of tangible assets (882) (224) (206) (12) - (1,324) Operating income 2,295 262 242 (40) - 2,759 Amortization of intangible assets and acquisition goodwill (6) (42) (63) (6) (117) Equity in income (loss) of affiliates and other items 87 47 (135) 373 372 Tax on net operating income (1,371) (60) (18) 4 (1,445) Net operating Income 1,005 207 26 331 1,569 Net cost of net debt (42) Minority interests and dividends on subsidiaries' redeemable preferred shares (24) Net Income 1,503 2nd quarter 2002 Upstream Downstream Chemicals Corporate Intercompany Total (non-recurring items) - Non-Group sales - - Intersegment sales Total sales Depreciation, depletion, and amortization of tangible assets (21) (21) Operating income (30) (16) (46) Amortization of intangible assets and acquisition goodwill - - - - - Equity in income (loss) of affiliates and other items (122) 173 51 Tax on net operating income (166) 5 41 (39) (159) Net operating income (196) (11) (81) 134 (154) Net cost of net debt Minority interests and dividends on subsidiaries' redeemable preferred shares 25 Net Income (129) 2nd quarter 2002 Upstream Downstream Chemicals Corporate Intercompany Total (excluding non-recurring items) - Non-Group sales 3,888 17,387 5,157 3 - 26,435 - Intersegment sales 2,843 368 106 29 (3,346) - Total sales 6,731 17,755 5,263 32 (3,346) 26,435 Depreciation, depletion, and amortization of tangible assets (861) (224) (206) (12) (1,303) Operating income 2,325 278 242 (40) 2,805 Amortization of intangible assets and acquisition goodwill (6) (42) (63) (6) (117) Equity in income (loss) of affiliates and other items 87 47 (13) 200 321 Tax on net operating income (1,205) (65) (59) 43 (1,286) Net operating income 1,201 218 107 197 1,723 Net cost of net debt (42) Minority interests and dividends on subsidiaries' redeemable preferred shares (49) Net income 1,632 2nd quarter 2002 Upstream Downstream Chemicals Corporate Intercompany Total Gross expenditures 1,556 228 284 32 2,100 Divestitures at selling price 106 47 9 301 463 Cash flow from operating activities 1,705 805 48 292 2,850 BUSINESS SEGMENTS INFORMATION Total (unaudited) in millions of euros 1st half 2003 Upstream Downstream Chemicals Corporate Intercompany Total - Non-Group sales 9,290 34,603 8,743 14 52,650 - Intersegment sales 5,790 1,151 249 58 (7,248) - Total sales 15,080 35,754 8,992 72 (7,248) 52,650 Depreciation, depletion, and amortization of tangible assets (1,606) (424) (366) (12) (2,408) Operating income 5,322 1,235 299 (122) 6,734 Amortization of intangible assets and acquisition goodwill (8) (48) (69) (10) (135) Equity in income (loss) of affiliates and other items 159 156 (395) 298 218 Tax on net operating income (2,850) (352) 129 182 (2,891) Net operating income 2,623 991 (36) 348 3,926 Net cost of net debt (85) Minority interests and dividends on subsidiaries' redeemable preferred shares (116) Net income 3,725 1st half 2003 Upstream Downstream Chemicals Corporate Intercompany Total (non-recurring items) - Non-Group sales - Intersegment sales Total sales Depreciation, depletion, and amortization of tangible assets - - - - - Operating income - - - - - Amortization of intangible assets and acquisition goodwill - Equity in income (loss) of affiliates and other items (213) 40 (173) Tax on net operating income 21 (10) 11 Net operating income - - (192) 30 (162) Net cost of net debt - Minority interests and dividends on subsidiaries' redeemable preferred shares - Net income (162) 1st half 2003 Upstream Downstream Chemicals Corporate Intercompany Total (excluding non-recurring items) - Non-Group sales 9,290 34,603 8,743 14 - 52,650 - Intersegment sales 5,790 1,151 249 58 (7,248) - Total sales 15,080 35,754 8,992 72 (7,248) 52,650 Depreciation, depletion, and amortization of tangible assets (1,606) (424) (366) (12) (2,408) Operating income 5,322 1,235 299 (122) 6,734 Amortization of intangible assets and acquisition goodwill (8) (48) (69) (10) (135) Equity in income (loss) of affiliates and other items 159 156 (182) 258 391 Tax on net operating income (2,850) (352) 108 192 (2,902) Net operating income 2,623 991 156 318 4,088 Net cost of net debt (85) Minority interests and dividends on subsidiaries' redeemable preferred shares (116) Net income 3,887 1st half 2003 Upstream Downstream Chemicals Corporate Intercompany Total Gross expenditures 2,296 319 335 52 3,002 Divestitures at selling price 224 57 787 82 1,150 Cash flow from operating activities (1) 4,455 3,043 (185) (357) 6,956 (1) In the Chemicals segment, this figure amounts to 147 million euros excluding an amount of 332 million euros paid relating to the Toulouse AZF plant explosion, offset by a long-term liability write-back. BUSINESS SEGMENTS INFORMATION Total (unaudited) In millions of euros 1st half 2002 Upstream Downstream Chemicals Corporate Intercompany Total -Non-Group sales 8,017 32,290 9,905 7 - 50,219 -Intersegment sales 5,463 733 181 53 (6,430) - Total sales 13,480 33,023 10,086 60 (6,430) 50,219 Depreciation, depletion, and amortization of tangible assets (1,732) (453) (413) (22) (2,620) Operating income 4,311 557 363 (106) 5,125 Amortization of intangible assets and acquisition goodwill (11) (64) (103) (7) (185) Equity in income (loss) of affiliates and other items 228 120 (341) 664 671 Tax on net operating income (2,457) (156) 14 76 (2,523) Net operating income 2,071 457 (67) 627 3,088 Net cost of net debt (82) Minority interests and dividends on subsidiaries' redeemable preferred shares (74) Net income 2,932 1st half 2002 Upstream Downstream Chemicals Corporate Intercompany Total (non-recurring items) -Non-Group sales -Intersegment sales Total sales Depreciation, depletion, and amortization of tangible assets (21) (21) Operating income (30) (16) (46) Amortization of intangible assets and acquisition goodwill Equity in income (loss) of affiliates and other items (321) 355 34 Tax on net operating income (166) 5 107 (78) (132) Net operating income (196) (11) (214) 277 (144) Net cost of net debt Minority interests and dividends on subsidiaries' redeemable preferred shares 25 Net income (119) 1st half 2002 Upstream Downstream Chemicals Corporate Intercompany Total (excluding non-recurring items) -Non-Group sales 8,017 32,290 9,905 7 - 50,219 -Intersegment sales 5,463 733 181 53 (6,430) - Total sales 13,480 33,023 10,086 60 (6,430) 50,219 Depreciation, depletion, and amortization of tangible assets (1,711) (453) (413) (22) (2,599) Operating income 4,341 573 363 (106) 5,171 Amortization of intangible assets and acquisition goodwill (11) (64) (103) (7) (185) Equity in income (loss) of affiliates and other items 228 120 (20) 309 637 Tax on net operating income (2,291) (161) (93) 154 (2,391) Net operating income 2,267 468 147 350 3,232 Net cost of net debt (82) Minority interests and dividends on subsidiaries' redeemable preferred shares (99) Net income 3,051 1st half 2002 Upstream Downstream Chemicals Corporate Intercompany Total Gross expenditures 3,199 360 540 110 4,209 Divestitures at selling price 329 82 41 597 1,049 Cash flow from operating activities 3,397 1,386 38 487 5,308 This information is provided by RNS The company news service from the London Stock Exchange

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TotalEnergies SE (TTE)
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