Annual Reports

 
Other

  • 6-K (Mar 1, 2018)
  • SC 13G (Feb 20, 2018)
  • 6-K (Feb 9, 2018)
  • S-8 (Feb 2, 2018)
  • SC 13G (Feb 1, 2018)
  • 6-K (Jan 31, 2018)
Total S.A. 6-K 2005

Documents found in this filing:

  1. 6-K
  2. 6-K
FORM 6-K
Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington D.C.

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934

For the period ending March 31, 2005

TOTAL S.A.

 
(Translation of registrant’s name into English)

2, place de la Coupole
La Défense
92400 Courbevoie
France

 
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

     
Form 20-F  x   Form 40-F  o

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

     
Yes  o   No  x

(If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-                            .)

 


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SIGNATURES


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OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The financial information in this Form 6-K with respect to annual periods has been derived from the audited consolidated financial statements for the year ended December 31, 2004 included in Total S.A.’s Annual Report on Form 20-F filed with the Securities and Exchange Commission on April 20, 2005. The financial information in this Form 6-K with respect to the first quarter ended March 31, 2005 has been derived from the unaudited interim consolidated financial statements for the first quarter period ended March 31, 2005 which have been the subject of a limited review by the company’s auditors.

Total – consolidated accounts

Starting in the first quarter 2005, results for Total S.A. and its subsidiaries (“Total”, the “Company” or the “Group”), including data for prior periods in 2004, are presented in accordance with International Financial Reporting Standards (“IFRS”).

                         
in millions of euros (except for per share data)   1Q05     1Q04     %  
 
Sales
    31,739       26,975       +18 %
 
Operating income
    6,113       3,709       +65 %
 
Net operating income
    3,340       2,187       +53 %
 
Net income*
    3,208       2,090       +53 %
 
Earnings per share
    5.38       3.41       +58 %
 
Investments
    1,784       1,637       +9 %
 
Divestments
at selling price
    213       182       +17 %
 
Cash flow from operating activities
    4,037       4,109       -2 %
 

* Group share.

Number of shares

                         
in millions   1Q05     1Q04     %  
 
Fully-diluted weighted-average shares
    596.1       612.7       -3 %
 

Market environment

                         
    1Q05     1Q04     %  
 
/$
    1.31       1.25       -5 %*
 
                       
Brent ($/b)
    47.6       32.0       +49 %
 
                       
European refining margins TRCV ($/t)
    31.7       21.6       +47 %
 

* Change in the dollar versus the euro.

 


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Business segment reporting

The financial information for each business segment is reported on the same basis that is used internally by the chief operating decision maker in assessing segment performance and the allocation of segment resources.

Due to their particular nature or significance, certain transactions qualified as “special items” are monitored at the Group level and excluded from the business segment figures. Special items affecting operating income and net income include principally restructuring charges, asset impairment charges, gains or losses on sales of assets and other items.

In accordance with International Accounting Standard (IAS) 2, the Group values inventories of petroleum products in the financial statements according to the FIFO (First-in, First-out) method and other inventories using the weighted-average cost method. However, the Group continues to present the results of its Downstream segment on an as adjusted basis using the replacement cost method and those of its Chemicals segment on an as adjusted basis using the LIFO (Last-in, First-out) method in order to ensure the comparability of the Group’s results with those of its leading competitors, particularly those that are North American. The inventory valuation effect is the difference between the results according to the FIFO method and the results according to the replacement cost or LIFO methods.

The adjusted business segment results (adjusted operating income and adjusted net operating income) are defined as replacement cost results, adjusted for special items.

Adjustments to business segment operating income

                 
in millions of euros   1Q05     1Q04  
 
Impact of special items on business segment operating income
           
 
Restructuring charges
           
Impairments
           
Other
           
 
Difference of FIFO vs. replacement cost
    722       248  
 
 
               
 
Total adjustments affecting business segment operating income
    722       248  
 

Adjustments to business segment net operating income

                 
in millions of euros   1Q05     1Q04  
 
Impact of special items on business segment net operating income
    (83 )     (17 )
 
Gain/(loss) on asset sales
           
Restructuring charges and early retirements plans
    (83 )     (17 )
Impairments
           
Other
           
 
After-tax difference of FIFO vs. replacement cost
    496       161  
 
 
               
 
Total adjustments affecting business segment net operating income
    413       144  
 

The following discussion should be read in conjunction with the unaudited interim consolidated financial statements and the related notes provided elsewhere in this Form 6-K and with the information, including the audited financial statements and related notes, for the year ended December 31, 2004 in Total’s Annual Report on Form 20-F for the year ended December 31, 2004.

 


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Adjustments to business segment operating income

Adjustments to business segment operating income had a positive impact of 722 M in the first quarter 2005 and of 248 M in the first quarter 2004, comprising the inventory valuation effect in the Downstream and Chemicals segments. There were no special items affecting business segment operating income in the first quarter 2005 or the first quarter 2004.

Adjustments to business segment net operating income

Adjustments to business segment net operating income had a positive impact of 413 M in the first quarter 2005 and of 144 M in the first quarter 2004. In the first quarter of 2005 this included a positive impact of 496 M from the inventory valuation effect and a negative impact of 83 M of special items made up of restructuring charges in the Chemicals segment. In the first quarter 2004, the inventory valuation effect had a positive impact of 161 M and special items, also made up of restructuring charges in the Chemicals segment, had a negative impact of 17 M.

First quarter 2005 Group results

     Operating income

The oil market environment for the first quarter 2005 was marked by sharply higher oil prices and stronger refining margins compared to the first quarter 2004. The average Brent price increased by 49% to 47.6 $/b. The TRCV European refining margin indicator averaged 31.7 $/t, an increase of 47% compared to the first quarter last year.

In addition, petrochemical margins continued to increase, reaching an average level higher than that of the first and fourth quarters in 2004.

The impact of the improvement in the oil market and chemicals environment was slightly offset by the 5% decline in the value of the dollar relative to the euro.

In this context, operating income increased by 65% to 6,113 million euros (M) in the first quarter 2005 from 3,709 M in the first quarter 2004.

Net operating income increased by 53% to 3,340 M in the first quarter 2005 from 2,187 M in the first quarter 2004. The lower percentage increase, relative to the increase in operating income, is due primarily to a higher effective tax rate in the first quarter 2005.

     Net income

In the first quarter 2005, Total recorded a negative impact of 42 M from its interest in Sanofi-Aventis for items that are similar in nature to those that Total records as special items in its own accounts. In addition, equity income from affiliates in the first quarter 2005 included a net negative accounting impact of 82 M for Total’s equity share of amortization of intangible assets related to the Sanofi-Aventis merger.

Net income, which includes an after-tax inventory valuation effect of 496 M in the first quarter 2005 and 161 M in the first quarter 2004, increased by 53% to 3,208 M from 2,090 M in the first quarter 2004.

During the first quarter 2005, the Group bought back 4.87 million of its shares for 847 M. The number of weighted-average shares at March 31, 2005 was 594.9 million compared to 597.7 million at December 31, 2004.

Earnings per share, based on 596.1 million fully-diluted weighted-average shares, increased by 58% to 5.38 euros from 3.41 euros in the first quarter 2004. Earnings per share increased at a higher rate than net income due to the accretive effect of the share buybacks.

     Cash flow

Cash flow from operating activities was 4,037 M in the first quarter 2005, a decrease of 2% compared to the first quarter 2004. Investments were 1,784 M in the first quarter 2005 compared to 1,637 M in the same quarter last year. Divestments in the first quarter 2005 were 213 M.

Net cash flow1 was 2,466 M, or approximately 3.2 B$ in the first quarter 2005, compared to 2,654M in the first quarter 2004.

The net-debt-to-equity ratio2 was 23.9% at March 31, 2005 compared to 30.7% at December 31, 2004 and 24.1% at March 31, 2004.

 
1   Net cash flow = cash flow from operating activities + total divestitures – total expenditures as per consolidated statement of cash flows.
 
2   Net-debt-to-equity ratio = sum of short-term borrowings and bank overdrafts and long-term debt, net of cash and cash equivalents and short-term investments, divided by the sum of shareholders’ equity, redeemable preferred shares issued by consolidated subsidiaries and minority interest after expected dividends.

 


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Upstream

     Results

                         
in millions of euros   1Q05     1Q04     %  
 
Operating income
    4,010       2,823       +42 %
 
Adjustments affecting operating income
                 
 
Adjusted operating income
    4,010       2,823       +42 %
 
Net operating income
    1,808       1,399       +29 %
 
Adjustments affecting net operating income
                 
 
Adjusted net operating income
    1,808       1,399       +29 %
 
 
                       
 
Investments
    1,363       1,214       +12 %
 
Divestments
at selling price
    128       99       +29 %
 
Cash flow from operating activities
    2,188       2,332       -6 %
 

Adjusted operating income from the Upstream segment increased by 42% to 4,010 M in the first quarter 2005 from 2,823 M in the first quarter 2004. The Upstream segment benefited from higher hydrocarbon prices, more so for liquids than for gas, and from an above average ratio of sales to liquids production.

Adjusted net operating income from the Upstream segment rose to 1,808 M in the first quarter 2005, an increase of 29%. This increase, which is a smaller percentage increase than for the adjusted operating income, is due mainly to a higher effective tax rate in the first quarter 2005 than in the same quarter last year.

     Production

                         
Hydrocarbon production   1Q05     1Q04     %  
 
Combined production (kboe/d)
    2,562       2,633       -3 %
 
Liquids (kb/d)
    1,657       1,723       -4 %
Gas (Mcfd)
    4,945       4,951        
 

Hydrocarbon production was 2,562 thousand barrels per day (kboe/d) in the first quarter 2005 versus 2,633 kboe/d in the first quarter 2004, a decrease of 2.7%. The decrease is due essentially to the negative impact of higher prices in the first quarter 2005 versus the first quarter 2004 on entitlement volumes from production sharing and buy-back contracts (“price effect”). In addition, production shut-downs in the Gulf of Mexico following Hurricane Ivan affected first quarter 2005 volumes. The main facilities restarted production progressively from the end of March 2005.

Excluding these impacts, production increased slightly, with growth from Libya, Indonesia, Angola, Nigeria, Venezuela and Qatar being largely offset by lower production in the North Sea.

 


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     Liquids and gas price realizations

                         
Liquids and gas price*   1Q05     1Q04     %  
 
Average liquids price ($/b)
    44.1       31.0       +42 %
 
Average gas price ($/Mbtu)
    4.40       3.70       +19 %
 

* Consolidated subsidiaries, excluding fixed margin and buy-back contracts.

The average realized price for liquids reflects a smaller increase than for the Brent price primarily because of the wider light-heavy differential in pricing various grades of crude. The increase in the average realized gas price is due notably to higher European gas prices.

     Recent highlights

First quarter 2005 exploration successes included an extension of the Usan discovery in Nigeria (Total-operated, 20%), securing a 49% interest in Block 4 of Plataforma Deltana in Venezuela3, and the acquisition of new exploration acreage, two deep-offshore blocks in Australia and two blocks in Mauritania. More recently, Total added a new exploration block in Cameroon.

The first quarter 2005 highlights also included the start-up of the Grand Angostura field (Total 30%) offshore Trinidad and Tobago and the launching of the development of the Forvie North field (Total 100%) in the UK North Sea.

Following the preemption process related to the sale of the BG stake in the North Caspian permit, Total signed an agreement to sell a 1.85% interest to KazMunaGas, the national oil company of the Republic of Kazakhstan. This sale was completed in the first half of May and Total now holds an 18.5% interest in the permit.

In upstream LNG, significant progress was made on Yemen LNG (Total 42.9%) with the signing of three LNG sales agreements covering almost all of the production capacity and the launching of calls for tenders on the development of the project. On Qatargas II, Total signed an agreement to acquire 16.7% of train 2 in the project and a purchase agreement for up to 5.2 million tons per year of LNG over 25 years.

In midstream LNG, the Hazira LNG regasification terminal (Total 26%) in India started commercial operations in April 2005.

On May 2, 2005, Total announced the launching of the development of the offshore Nigerian Akpo field (Total-operated 24%). First production from Akpo is expected at end-2008 with a plateau rate of 225 kboe/d, consisting of about 80% of condensates.

 
3   Subject to approval by authorities.

 


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Downstream

     Results

                         
in millions of euros   1Q05     1Q04     %  
 
Operating income
    1,543       736       +110 %
 
Adjustments affecting operating income
    652       183       +256 %
 
Adjusted operating income
    891       553       +61 %
 
Net operating income
    1,128       545       +107 %
 
Adjustments affecting net operating income
    450       120       +275 %
 
Adjusted net operating income
    678       425       +60 %
 
 
                       
 
Investments
    217       240       -10 %
 
Divestments
at selling price
    45       43       +5 %
 
Cash flow from operating activities
    1,689       1,724       -2 %
 

Adjusted operating income from the Downstream segment increased by 61% to 891 M in the first quarter 2005 from 553 M in the first quarter 2004.

The Downstream segment benefited from a favorable refining environment. Relative to the first quarter of last year, refining margins were driven sharply higher in early 2005 by a combination of strong product demand, for distillates in Europe and for gasoline in the US, plus the wider light-heavy crude price differential. The favorable impact of this trend was not fully reflected by the 47% increase in the TRCV margin indicator.

Downstream results also benefited from the improved operational performance of the refineries and from the positive effects of productivity programs.

Adjusted net operating income from the Downstream segment increased by 60% to 678 M in the first quarter 2005 from 425 M in the first quarter 2004.

     Refinery throughput

                         
Refinery throughput (kb/d)   1Q05     1Q04     %  
 
Total refinery throughput*
    2,626       2,493       +5 %
 
France
    1,049       1,034       +1 %
Rest of Europe*
    1,252       1,181       +6 %
Rest of world
    325       278       +17 %
 

* Includes equity share in Cepsa.

As a result of the strong operational performance of the refineries, throughput (crude and cracker feedstocks) reached a new record level of 2,626 kb/d in the first quarter 2005. The refining utilization rate based on crude input rose to 95% from 92% in the first quarter 2004. A period of major turnarounds began at the end of the first quarter 2005 that will involve Grandpuits and Milford Haven refineries as well as partial turnarounds for the Normandy and Antwerp refineries.

 


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     Recent highlights

Total reached an agreement with the Chinese authorities to form a joint venture with Sinochem for the creation of a network of 200 service stations in northern China, where the two companies are already partners in the Dalian refinery.

Beginning in April 2005, Total began selling new high-performance fuels (gasoline and diesel): TOTAL EXCELLIUM. Initially marketed in nearly 300 stations, they will be distributed throughout the Total network by the end of 2005.

Chemicals

     Results

                         
in millions euros   1Q05     1Q04     %  
 
Sales
    5,518       4,673       +18 %
 
     Base chemicals & polymers
    2,587       1,922       +35 %
     Specialties
    1,568       1,466       +7 %
     Arkema
    1,360       1,278       +6 %
     Corporate Chemicals
    3       7        
 
Operating income
    625       265       +136 %
 
Adjustments affecting operating income
    70       65       +8 %
 
Adjusted operating income
    555       200       +178 %
 
     Base chemicals & polymers
    352       69       +410 %
     Specialties
    116       119       -3 %
     Arkema
    89       11       +709 %
     Corporate Chemicals
    (2 )     1     ns
 
Net operating income
    355       169       +110 %
 
Adjustments affecting net operating income
    (36 )     27     ns
 
Adjusted net operating income
    391       142       +175 %
 
 
                       
 
Investments
    158       172       -8 %
 
Divestments at selling price
    22       19       +16 %
 
Cash flow from operating activities
    82       (72) *   ns
 

* Includes disbursements related to the Toulouse-AZF reserve of 130 M.

Sales for the Chemicals segment increased by 18% to 5,518 M in the first quarter 2005 from 4,673 M in the first quarter 2004.

Adjusted operating income increased sharply to 555 M in the first quarter 2005 from 200 M in the first quarter 2004. This performance was due mainly to the strong increase in base chemicals which benefited from the rebound in petrochemical margins that began in the second half of 2004. Specialties continued to perform well.

 


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Arkema’s results increased sharply mainly due to improved market conditions and to the positive effects of self-help programs4 that are underway. In the chlorochemicals business unit, Arkema announced a restructuring program at the beginning of the year.

Adjusted net operating income from the Chemicals segment increased to 391 M in the first quarter 2005 from 142 M in the first quarter 2004.

     Recent highlights

Samsung Total Petrochemicals launched a project to debottleneck the aromatics plant in Daesan, South Korea which is expected to increase capacity by about 25%.

In April 2005, the project to build an ethane cracker at Ras Laffan in Qatar was launched. Total Petrochemicals holds a 22% net interest in this project through its subsidiary Qatofin.

Summary and outlook

The return on average capital employed (ROACE5) for Total for the period April 1, 2004 to March 31, 2005 was 30%. Profitability, as measured by ROACE, increased in all business segments. The return on equity for the same period was 33%.

The investment program is proceeding according to plan with the priority being Upstream growth as well as increased expenditures for refining.

Total bought back 1.45 million of its shares for 261 M in April 2005, raising the total bought back since the beginning of the year to slightly more than 1% of the share capital.

Since the beginning of the second quarter 2005, the oil market environment has remained favorable with high oil prices and refining margins. Despite compression in petrochemical margins, the Chemicals segment continues to benefit from a relatively favorable environment.

Forward-looking statements

This document may contain statements regarding our assumptions, projections, expectations, intentions or beliefs about future events. These statements are intended as “Forward-Looking Statements” under the Private Securities Litigation Reform Act of 1995. These statements may generally, but not always, be identified by the use of words such as “anticipates”, “should”, “expects”, “estimates”, “believes” or similar expressions. In particular, forward-looking statements include (i) certain statements with regard to management aims and objectives, planned expansion, investment or other projects, expected or targeted production volume, capacity or rate, the date or period in which production is scheduled or expected to come on stream or a project or action is scheduled or expected to be completed, (ii) the statements with respect to the Group’s dividend policy, the manner in which the Group uses cash surpluses, the cost savings target of the Group, return on average capital employed, production targets, breakeven points, targeted performance improvements and effect on pre-tax results, and levels of annual investment and (iii) the statements with regard to trends in the trading environment, oil and gas prices, refining, marketing and chemicals margins, inventory and product stock levels, supply capacity, profitability, results of operations, liquidity or financial position. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements, including:

    Future levels of industry product supply, demand and pricing;
    Political instability, including international armed conflict, and economic growth in relevant areas of the world;
    Development and use of new technology and successful partnering;
    The actions of competitors;
    Natural disasters and other changes in business conditions;
    Wars and acts of terrorism or sabotage;
    Other factors discussed under “Risk Factors”, “Item 4 — Information on the Company — Other Matters”, “Item 5 — Operating and Financial Review and Prospects” and “Cautionary Statement Concerning Forward-Looking Statements” in our Annual Report on Form 20-F for the year ended December 31, 2004.
 
4   Self-help programs include (i) synergies from the combinations between Total, Petrofina and Elf Aquitaine, (ii) productivity gains and (iii) positive impact from volume growth.
5   ROACE = net operating income divided by the average capital employed between the beginning and the end of the period.

 


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Operating information by segment
First quarter 2005

Upstream

                         
Combined production by region (kboe/d)   1Q05     1Q04     %  
 
Europe
    830       891       -7 %
Africa
    804       796       +1 %
North America
    37       65       -43 %
Far East
    256       244       +5 %
Middle East
    394       419       -6 %
South America
    232       210       +10 %
Rest of world
    9       8       +13 %
 
Total
    2,562       2,633       -3 %
 
                         
Liquids production by region (kb/d)   1Q05     1Q04     %  
 
Europe
    415       448       -7 %
Africa
    720       723        
North America
    6       16       -63 %
Far East
    30       32       -6 %
Middle East
    339       362       -6 %
South America
    139       134       +4 %
Rest of world
    8       8        
 
Total
    1,657       1,723       -4 %
 

 


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Gas production by region (Mcfd)   1Q05     1Q04     %  
 
Europe
    2,258       2,413       -6 %
Africa
    450       391       +15 %
North America
    165       259       -36 %
Far East
    1,257       1,179       +7 %
Middle East
    296       302       -2 %
South America
    517       407       +27 %
Rest of world
    2           ns
 
Total
    4,945       4,951        
 

Downstream

                         
Refined product sales by region (kb/d)*   1Q05     1Q04     %  
 
Europe
    2,858       2,794       +2 %
Africa
    318       280       +14 %
United States
    591       580       +2 %
Rest of world
    223       188       +19 %
 
Total
    3,990       3,842       +4 %
 

* Includes equity share in Cepsa and trading.

 


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TOTAL
FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF INCOME

                 
    First quarter     First quarter  
Amounts in millions of euros (1)   2005     2004  
    (unaudited)     (unaudited)  
 
 
               
Sales
    31,739       26,975  
Excise taxes
    (5,051 )     (5,190 )
Revenues from sales
    26,688       21,785  
 
               
Cost of goods sold and inventory variation
    (14,877 )     (12,039 )
Other operating expenses
    (4,435 )     (4,732 )
Unsuccessful exploration costs
    (72 )     (73 )
Depreciation, depletion, and amortization of tangible assets
    (1,191 )     (1,232 )
 
 
               
Operating income
               
Corporate
    (65 )     (115 )
Business segments
    6,178       3,824  
 
Total operating income
    6,113       3,709  
 
 
               
Other income
    4       74  
Other expense
    (172 )     (97 )
 
               
Financial charge on debt
    (254 )     (153 )
Financial income on cash and cash equivalents and equity securities
    184       105  
Cost of net debt
    (70 )     (48 )
 
               
Other financial income
    88       64  
Other financial expense
    (66 )     (46 )
Income taxes
    (2,899 )     (1,797 )
Equity in income (loss) of affiliates
    295       292  
 
Consolidated net income
    3,293       2,151  
 
Group share
    3,208       2,090  
Minority interests and dividends on subsidiaries’ redeemable preferred shares
    85       61  
 
Earnings per share (euros)
    5.38       3.41  
 
 
               
 

(1) Except for earnings per share.

 


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CONSOLIDATED BALANCE SHEET

                         
    Amounts in millions of euros  
    March 31, 2005     December 31, 2004     March 31, 2004  
    (unaudited)             (unaudited)  
 
ASSETS
                       
NON-CURRENT ASSETS
                       
Intangible assets, net
    3,274       3,176       3,536  
Property, plant, and equipment, net
    36,184       34,906       35,505  
Equity affiliates : investments and loans
    11,298       10,680       8,186  
Other investments
    1,156       1,198       1,276  
Other non-current assets
    2,033       2,351       2,455  
 
Total non-current assets
    53,945       52,311       50,958  
 
CURRENT ASSETS
                       
Inventories, net
    10,459       9,264       7,837  
Accounts receivable, net
    16,593       14,025       14,278  
Prepaid expenses and other current assets
    5,258       5,314       4,727  
Cash and cash equivalents
    12,548       3,860       16,190  
 
Total current assets
    44,858       32,463       43,032  
 
TOTAL ASSETS
    98,803       84,774       93,990  
 
LIABILITIES & SHAREHOLDERS’ EQUITY
                       
EQUITY
                       
Common shares
    6,358       6,350       6,497  
Paid-in surplus and retained earnings
    35,023       31,717       29,546  
Cumulative translation adjustment
    (481 )     (1,429 )     616  
Treasury shares
    (5,848 )     (5,030 )     (5,236 )
 
SHAREHOLDERS’ EQUITY — GROUP SHARE
    35,052       31,608       31,423  
 
Minority interest and subsidiaries’ redeemable preferred shares
    846       810       1,144  
 
TOTAL EQUITY
    35,898       32,418       32,567  
 
LONG-TERM LIABILITIES
                       
Deferred income taxes
    6,700       6,402       6,025  
Employee benefits
    3,592       3,607       3,892  
Other liabilities
    6,497       6,274       6,228  
 
Total long-term liabilities
    16,789       16,283       16,145  
 
LONG-TERM DEBT
    10,795       9,773       11,050  
 
CURRENT LIABILITIES
                       
Accounts payable
    13,080       11,672       11,202  
Other creditors and accrued liabilities
    12,529       11,148       10,901  
Short-term borrowings and bank overdrafts
    9,712       3,480       12,125  
 
Total current liabilities
    35,321       26,300       34,228  
 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
    98,803       84,774       93,990  
 

 


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CONSOLIDATED STATEMENTS OF CASH FLOWS

                 
Amounts in millions of euros   First quarter     First quarter  
    2005     2004  
    (unaudited)     (unaudited)  
 
CASH FLOW FROM OPERATING ACTIVITIES
               
 
               
Consolidated net income
    3,293       2,151  
Depreciation, depletion, and amortization
    1,243       1,276  
 
               
Long-term liabilities, valuation allowances, and deferred taxes
    549       77  
Impact of coverage of pension benefit plans
           
Unsuccessful exploration costs
    72       73  
(Gains)/Losses on sales of assets
    (4 )     (74 )
Equity in income of affiliates (in excess of)/less than dividends received
    (195 )     (245 )
Other changes, net
    11       70  
 
Cash flow from operating activities before changes in working capital
    4,969       3,328  
(Increase)/Decrease in operating assets and liabilities
    (932 )     781  
 
CASH FLOW FROM OPERATING ACTIVITIES (1)
    4,037       4,109  
 
CASH FLOW USED IN INVESTING ACTIVITIES
               
 
               
Intangible assets and property, plant, and equipment additions
    (1,513 )     (1,295 )
Exploration expenditures charged to expenses
    (71 )     (73 )
Acquisitions of subsidiaries, net of cash acquired
           
Investments in equity affiliates and other securities
    (15 )     (31 )
Increase in long-term loans
    (185 )     (238 )
 
Investments
    (1,784 )     (1,637 )
Proceeds from sale of intangible assets and property, plant, and equipment
    14       74  
Proceeds from sale of subsidiaries, net of cash sold
    11       1  
Proceeds from sale of non-current investments
    5       26  
Repayment of long-term loans
    183       81  
 
Total divestitures
    213       182  
(Increase)/Decrease in short-term investments
          12  
 
CASH FLOW USED IN INVESTING ACTIVITIES
    (1,571 )     (1,443 )
 
CASH FLOW FROM FINANCING ACTIVITIES
               
 
               
Issuance and repayment of shares:
               
Parent company’s shareholders
           
Purchase of treasury shares
    (808 )     (633 )
Minority shareholders
    62       39  
Subsidiaries’ redeemable preferred shares
    (38 )      
Cash dividends paid:
               
- Parent company’s shareholders
    (1 )      
- Minority shareholders
    (28 )     (4 )
Net issuance/(repayment) of long-term debt
    689       1,225  
Increase/(Decrease) in short-term borrowings and bank overdrafts
    5,952       7,661  
Other changes, net
    (1 )     (1 )
 
CASH FLOW FROM FINANCING ACTIVITIES
    5,827       8,287  
 
Net increase/decrease in cash and cash equivalents
    8,293       10,953  
Effect of exchange rates and changes in reporting entity on cash and cash equivalents
    395       386  
Cash and cash equivalents at the beginning of the period
    3,860       4,836  
 
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD
    12,548       16,175  
 
 
               

(1) Including payments relating to the Toulouse AZF plant explosion, offset by a long-term liability write-back of 10 million euros for the first quarter 2005 and 130 million euros for the first quarter 2004.

 


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CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDER’S EQUITY
(unaudited)

                                                                                 
                    Paid-in                                                  
                    surplus     Cumulative                                            
    Common     and     translation                             Subsidiaries’     Minority        
    shares issued     retained     adjustment     Treasury shares     Shareholders’     redeemable     interest     Total  
                    earnings                             equity     preferred             equity  
(Amounts in millions of euros)   Number     Amount                     Number     Amount             shares                  
 
                                                                               
 
As of January 1, 2004 (French GAAP)
    649,118,236       6,491       30,408       (3,268 )     (26,256,899 )     (3,225 )     30,406       396       664       31,466  
IFRS adjustments
                (3,048 )     3,268       (10,855,206 )     (1,388 )     (1,168 )           19       (1,149 )
As of January 1, 2004 (IFRS)
    649,118,236       6,491       27,360             (37,112,105 )     (4,613 )     29,238       396       683       30,317  
 
Cash dividend
                                                    (4 )     (4 )
Net income for the first quarter
                2,090                         2,090       1       60       2,151  
Issuance of shares
    622,573       6       33                         39                   39  
Purchase of treasury shares
                            (4,300,000 )     (633 )     (633 )                 (633 )
Cancellation of repurchased shares
                                                           
Sale of treasury shares (1)
                3             127,399       10       13                   13  
Translation adjustments
                      616                   616       13       24       653  
Other (2)
                60                         60             (29 )     31  
As of March 31, 2004 (IFRS)
    649,740,809       6,497       29,546       616       (41,284,706 )     (5,236 )     31,423       410       734       32,567  
 
Cash dividend
                (4,293 )                       (4,293 )           (203 )     (4,496 )
Net income from April 1, 2004 to December 31, 2004
                8,778                         8,778       6       214       8,998  
Issuance of shares
    5,148,231       52       445                         497                   497  
Purchase of treasury shares
                            (18,250,000 )     (2,921 )     (2,921 )                 (2,921 )
Cancellation of repurchased shares
    (19,873,932 )     (199 )     (2,877 )           19,873,932       3,076                            
Sale of treasury shares (1)
                11             588,287       51       62                   62  
Translation adjustments
                      (2,045 )                 (2,045 )     (28 )     (43 )     (2116 )
Other (2)
                107                         107       (241 )     (39 )     (173 )
As of December 31, 2004 (IFRS)
    635,015,108       6,350       31,717       (1,429 )     (39,072,487 )     (5,030 )     31,608       147       663       32,418  
 
Cash dividend
                                                    (28 )     (28 )
Net income for the first quarter
                3,208                         3,208       1       84       3,293  
Issuance of shares
    821,475       8       55                         63                   63  
Purchase of treasury shares
                            (4,870,000 )     (847 )     (847 )                 (847 )
Cancellation of repurchased shares
                                                           
Sale of treasury shares (1)
                10             321,340       29       39                   39  
Repayment of subsidiaries’ redeemable preferred shares
                                              (38 )           (38 )
Translation adjustments
                      948                   948       7       19       974  
Other (2)
                33                         33             (9 )     24  
As of March 31, 2005
    635,836,583       6,358       35,023       (481 )     (43,621,147 )     (5,848 )     35,052       117       729       35,898  
 

(1) Treasury shares related to the stock option purchase plans.
(2) Mainly due to the charge related to stock options.

 


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TOTAL

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR
THE FIRST THREE MONTHS OF 2005

(unaudited)

I.   ACCOUNTING POLICIES

The consolidated financial statements of TOTAL and its subsidiaries (together, the Company or Group) have been prepared in accordance with IFRS (International Financial Reporting Standards), adopted with effect from January 1, 2005, and applicable at year-end closing (December 31, 2005). Financial information presented in this document has been prepared on the basis of IFRS adopted thus far as well as those subject to approval by the European Commission.

The interim consolidated financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting, and are covered by IFRS 1, First-Time Adoption of IFRS, because they are part of the period covered by the Group’s first IFRS financial statements for the year ended December 31, 2005.

IFRS accounting principles differ in some areas from the standards previously applied by the Group. Descriptions of the effect of the transition to IFRS on the net equity and the results of the Group appear in the Annual Report on Form 20-F for the year ended December 31, 2004.

Accounting policies have been applied consistently for each of the presented periods.

II.   CHANGES IN THE GROUP STRUCTURE

There were no major changes in the Group structure during the first three months of 2005.

 


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TOTAL

Notes to the consolidated financial statements for the first three months of 2005

III.   ADJUSTMENT ITEMS

The financial information for each business segment is reported on the same basis that is used internally by the chief operating decision maker in assessing segment performance and the allocation of segment resources.

Due to their particular nature or significance, certain transactions qualified as “special items” are monitored at the Group level and excluded from the business segment figures. Special items affecting operating income and net income include principally restructuring charges, asset impairment charges, gains or losses on sales of assets and other items.

In accordance with IAS 2, the Group values inventories of petroleum products in the financial statements according to the FIFO (First-in, First-out) method and other inventories using the weighted-average cost method. However, the Group continues to present the results of its Downstream segment on an as adjusted basis using the replacement cost method and those of its Chemicals segment on an as adjusted basis using the LIFO (Last-in, First-out) method in order to ensure the comparability of the Group’s results with those of its leading competitors, particularly those that are North American. The inventory valuation effect is the difference between the results according to the FIFO method and the results according to the replacement cost or LIFO methods.

The adjusted business segment results (adjusted operating income and adjusted net operating income) are defined as replacement cost results, adjusted for special items.

ADJUSTMENTS TO OPERATING INCOME

                                         
(in millions of euros)           Upstream     Downstream     Chemicals     Total  
 
First quarter 2005
  Inventory valuation effect           652       70       722  
 
 
  Restructuring charges                        
 
 
  Asset impairment charges                        
 
 
  Other items                        
 
Total
                  652       70       722  
 
First quarter 2004
  Inventory valuation effect           183       65       248  
 
 
  Restructuring charges                        
 
 
  Asset impairment charges                        
 
 
  Other items                        
 
Total
                  183       65       248  
 

ADJUSTMENTS TO NET OPERATING INCOME

                                         
(in millions of euros)           Upstream     Downstream     Chemicals     Total  
 
First quarter 2005
  Inventory valuation effect           449       47       496  
 
 
  Restructuring charges                 (83 )     (83 )
 
 
  Asset impairment charges                        
 
 
  Gains (losses) on sales of assets                        
 
 
  Toulouse - AZF plant explosion                        
 
 
  Other items                        
 
Total
                  449       (36 )     413  
 
First quarter 2004
  Inventory valuation effect           117       44       161  
 
 
  Restructuring charges                 (17 )     (17 )
 
 
  Asset impairment charges                        
 
 
  Gains (losses) on sales of assets                        
 
 
  Other items                        
 
Total
                  117       27       144  
 

 


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TOTAL

Notes to the consolidated financial statements for the first three months of 2005

IV.   SHAREHOLDERS’ EQUITY

Shares held by the parent company, TOTAL S.A.

As of March 31, 2005, TOTAL S.A. held 18,538,330 of its own shares, representing 2.92% of its share capital, detailed as follows:

    9,312,262 shares allocated to covering share purchase option plans for Company employees;
 
    9,226,068 shares purchased for cancellation, of which 4,356,068 shares were purchased in November and December 2004, and 4,870,000 during the first quarter of 2005, pursuant to the authorization granted by the Ordinary and Extraordinary Shareholders’ Meeting held on May 14, 2004.

These 18,538,330 shares are deducted from the consolidated shareholders’ equity.

Shares held by the subsidiaries

As of March 31, 2005, TOTAL S.A. held indirectly through its subsidiaries 25,082,817 of its own shares, representing 3.95% of its share capital:

    505,918 shares held by a consolidated subsidiary, Total Nucléaire, indirectly controlled by TOTAL S.A. These shares were initially acquired in order to realize short-term cash investments;
 
    24,576,899 shares held by subsidiaries of Elf Aquitaine, Financière Valorgest, Sogapar and Fingestval.

These 25,082,817 shares are deducted from the consolidated shareholders’ equity.

V.   SUBSIDIARIES’ REDEEMABLE PREFERRED SHARES

There were no operations on these preferred shares during the first three months of 2005.

VI.   LONG-TERM DEBT
The Group has issued debenture loans through its subsidiary Total Capital during the first three months of 2005:

    Debenture 4% 2005-2011 (100 million CAD)
    Debenture 5.75% 2005-2011 (100 million AUD)
    Debenture 3.5% 2005-2009 (50 million USD)
    Debenture 2.135% 2005-2012 (300 million CHF)
    Debenture 3.25% 2005-2012 (300 million EUR)

The Group has reimbursed debenture loans during the three first months of 2005:

    Debenture 6.875% 2000-2005 (150 million GBP)
    Debenture 8.2% 1995-2005 (500 million FRF)

In the context of its active cash management, the Group may increase temporarily its short-term borrowings, particularly in the form of commercial paper. The short-term borrowings and the cash and cash equivalents resulting from this cash management in the quarterly financial statements are not necessarily representative of a steady position.

 


Table of Contents

TOTAL

Notes to the consolidated financial statements for the first three months of 2005

VII.   INFORMATION BY BUSINESS SEGMENT

BUSINESS SEGMENT INFORMATION
(unaudited)

                                                 
Amounts in millions of euros  
First quarter 2005   Upstream     Downstream     Chemicals     Corporate     Intercompany     Total  
 
Non-Group sales
    4,805       21,416       5,518                     31,739  
Intersegment sales
    4,226       1,029       352       58       (5,665 )      
Excise taxes
          (5051 )                         (5,051 )
 
Revenues from sales
    9,031       17,394       5,870       58       (5,665 )     26,688  
 
Operating expenses
    (4,266 )     (15,600 )     (5,069 )     (114 )     5,665       (19,384 )
Depreciation, depletion, and amortization of tangible assets
    (755 )     (251 )     (176 )     (9 )             (1,191 )
 
Operating income
    4,010       1,543       625       (65 )           6,113  
 
Equity in income (loss) of affiliates and other items
    77       115       (106 )     63               149  
Tax on net operating income
    (2,279 )     (530 )     (164 )     51               (2,922 )
 
Net operating income
    1,808       1,128       355       49               3,340  
 
Net cost of net debt
                                            (47 )
Minority interests and dividends on subsidiaries’ redeemable preferred shares
                                            (85 )
 
Net income
                                            3,208  
 
                                                 
First quarter 2005   Upstream     Downstream     Chemicals                          
(adjustments) (*)                                          
                         
Operating charges (1)
          652       70  
Depreciation, depletion, and amortization of tangible assets
                 
 
Operating income
          652       70  
 
Equity in income (loss) of affiliates and other items (1)
          13       (125 )
Tax on net operating income
          (215 )     19  
 
Net operating income
          450       (36 )
 
 
                       
(*) Adjustments include special items, inventory valuation effect and Total’s equity share of amortization of intangible assets related to the Sanofi-Aventis merger
 
                                               
(1) Of which inventory valuation effect
                                               
On operating income
          652       70  
On net operating income
          450       47  
                                                 
First quarter 2005   Upstream     Downstream     Chemicals                          
(adjusted)                                          
 
Operating expenses
    (4,266 )     (16,252 )     (5,139 )
Depreciation, depletion, and amortization of tangible assets
    (755 )     (251 )     (176 )
 
Adjusted operating income
    4,010       891       555  
 
Equity in income (loss) of affiliates and other items
    77       102       19  
Tax on net operating income
    (2,279 )     (315 )     (183 )
 
Adjusted net operating income
    1,808       678       391  
 
                                                 
First quarter 2005   Upstream     Downstream     Chemicals     Corporate     Intercompany     Total  
 
Total expenditures
    1,363       217       158       46               1,784  
Divestitures at selling price
    128       45       22       18               213  
Cash flow from operating activities (3)
    2,188       1,689       82       78               4,037  

(3) In the Chemicals segment, this figure amounts to 92 million euros excluding 10 million euros paid relating to the Toulouse AZF plant explosion.

 


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TOTAL

Notes to the consolidated financial statements for the first three months of 2005

BUSINESS SEGMENT INFORMATION
(unaudited)

                                                 
Amounts in millions of euros  
First quarter 2004   Upstream     Downstream     Chemicals     Corporate     Intercompany     Total  
 
Non-Group sales
    3,639       18,652       4,673       11               26,975  
Intersegment sales
    3,062       579       142       41       (3,824 )      
Excise taxes
          (5,190 )                         (5,190 )
 
Revenues from sales
    6,701       14,041       4,815       52       (3,824 )     21,785  
 
Operating expenses
    (3,107 )     (13,057 )     (4,345 )     (159 )     3824       (16,844 )
Depreciation, depletion, and amortization of tangible assets
    (771 )     (248 )     (205 )     (8 )             (1,232 )
 
Operating income
    2,823       736       265       (115 )             3,709  
 
Equity in income (loss) of affiliates and other items
    118       37       (18 )     150               287  
Tax on net operating income
    (1,542 )     (228 )     (78 )     39               (1,809 )
 
Net operating income
    1,399       545       169       74               2,187  
 
Net cost of net debt
                                            (36 )
Minority interests and dividends on subsidiaries’ redeemable preferred shares
                                            (61 )
 
Net income
                                            2,090  
 
                                                 
First quarter 2004                                          
(adjustments) (*)   Upstream     Downstream     Chemicals                          
                         
Operating charges (1)
          183       65  
Depreciation, depletion, and amortization of tangible assets
                 
 
Operating income
          183       65  
 
Equity in income (loss) of affiliates and other items (1)
          (3 )     (25 )
Tax on net operating income
          (60 )     (13 )
 
Net operating income
          120       27  
 
 
                       
(*) Adjustments include special items, inventory valuation effect and Total’s equity share of amortization of intangible assets related to the Sanofi-Aventis merger
 
                       
(1) Of which inventory valuation effect
                       
On operating income
          183       65  
On net operating income
          120       44  
                                         
First quarter 2004                                  
(adjusted)   Upstream     Downstream     Chemicals                  
                 
Operating expenses
    (3,107 )     (13,240 )     (4,410 )
Depreciation, depletion, and amortization of tangible assets
    (771 )     (248 )     (205 )
 
Adjusted operating income
    2823       553       200  
 
Equity in income (loss) of affiliates and other items
    118       40       7  
Tax on net operating income
    (1,542 )     (168 )     (65 )
 
Adjusted net operating income
    1,399       425       142  
 
                                                 
First quarter 2004   Upstream     Downstream     Chemicals     Corporate     Intercompany     Total  
 
Total expenditures
    1,214       240       172       11               1,637  
Divestitures at selling price
    99       43       19       21               182  
Cash flow from operating activities (3)
    2,332       1,724       (72 )     125               4,109  
 

(3) In the Chemicals segment, this figure amounts to 58 million euros excluding 130 million euros paid relating to the Toulouse AZF plant explosion.

 


Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

             
    TOTAL S.A.
 
           
Date: June 17, 2005
  By:       /s/ Charles Paris de Bollardière
         
 
      Name:   Charles PARIS de BOLLARDIERE
 
      Title:   Treasurer

 

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