Registration document 2007 - Total.com

ADJUSTMENTS TO OPERATING INCOME
2004 (in M€) Upstream Downstream Chemicals Corporate Total
Inventory valuation effect - 487 232 - 719
Restructuring charges - (50) - - (50)
Asset impairment charges - (34) (244) - (278)
Other - - (55) - (55)
Total - 403 (67) - 336
ADJUSTMENTS TO NET INCOME
2004 (in M€) Upstream Downstream Chemicals Corporate Total
Inventory valuation effect - 349 157 - 506
TOTAL’s equity share of special items recorded by Sanofi-Aventis
(dilution income included) - - - 2,399 2,399
Adjustment related to Sanofi-Aventis merger - - - (113) (113)
Restructuring charges - (31) (112) - (143)
Asset impairment charges (114) (21) (637) - (772)
Gains/(Losses) on sales of assets - - - 53 53
Other (34) (26) (197) 64 (193)
Total (148) 271 (789) 2,403 1,737
D) Additional information on impairments
In the Chemicals segment, impairments of assets (property, plant
and equipment and intangible assets) have been recognized for
the year ended December 31, 2006, with an impact of -61 M€ in
operating income and -40 M€ in net income, Group share. These
items are identified in the paragraph C above as adjusting items
in heading “Asset impairment charges”.
These impairment losses impact certain Cash Generating Units
(CGU) of the Chemicals segment for which there were indications
that assets may be impaired, due mainly to changes in the
economic environment of their specific businesses. CGUs of the
Chemicals segment are worldwide business units, including
activities or products with common strategic, commercial and
industrial characteristics.
Appendix 1 – Consolidated financial statements
Notes to the consolidated financial statement
In addition,
9
• the recoverable amount of CGUs has been based on their
value in use, as defined in note 1L to the consolidated financial
statements “Impairment of long-lived assets”;
• future cash flows including specific risks attached to CGU
assets have been discounted using a 8% after tax discount rate.
For the years ended December 31, 2005 and 2004, changes in
the economic environment of certain business units of the
Chemicals segment had triggered the recognition of impairments
of assets for respectively -71 M€ and -244 M€ in operating
income and -215 M€ and -637 M€ in net income, Group share.
No reversal of impairment losses has been recognized in 2004,
2005 and 2006.
TOTAL – Registration Document 2006 193