Registration document 2007 - Total.com

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9 228 Appendix 1 – Consolidated financial statements Notes to the consolidated financial statement benchmark, primarily through short-term interest rate swaps and short-term currency swaps, without modification of the currency exposure. Management of interest rate risk on non-current debt The Group’s policy consists of incurring non-current debt primarily at a floating rate or at a fixed rate depending on opportunities at the issuance with regards to the level of interest rates, in dollars or in euros according to the general corporate purposes. Long-term interest rate and currency swaps can hedge debenture loans at their issuance in order to create a TOTAL – Registration Document 2006 variable rate synthetic debt. In order to partially modify the interest rate structure of the long-term debt, TOTAL can also enter into long-term interest rate swaps. Sensitivity analysis on interest rate and foreign exchange risk The tables below present the potential impact of an increase or decrease of 10% in the interest rate yield curves in each of the currencies on the fair value of the current financial instruments in 2006 and 2005. ASSETS/(LIABILITIES) Change in fair Change in fair value with value with Carrying Estimated a 10% interest a 10% interest As of December 31, 2006 (in M€) amount fair value rate increase rate decrease Debenture loans (non-current portion, before swaps) (11,413) (11,413) 26 (26) Issue swaps and swaps hedging debenture loans (liabilities) (193) (193) Issue swaps and swaps hedging debenture loans (assets) 486 486 Total issue swaps and swaps hedging debenture loans - assets and liabilities 293 293 (26) 26 Fixed-rate bank loans (210) (207) 6 (6) Current portion of non-current debt after swap (excluding capital lease obligations) (2,140) (2,140) 1 (1) Other interest rates swaps 12 12 (1) 1 Currency swaps and forward exchange contracts (8) (8) 1 (1) Currency options - - - - As of December 31, 2005 (in M€) Debenture loans (non-current portion, before swaps) (11,025) (11,025) 126 (129) Issue swaps and swaps hedging debenture loans (liabilities) (128) (128) Issue swaps and swaps hedging debenture loans (assets) 450 450 Total issue swaps and swaps hedging debenture loans - assets and liabilities 322 322 (115) 117 Fixed-rate bank loans (411) (406) 7 (7) Current portion of non-current debt after swap (excluding capital lease obligations) (920) (919) 1 (1) Other interest rates swaps 3 3 (3) 3 Currency swaps and forward exchange contracts 260 260 4 (4) Currency options - - - -
As a result of its policy for management of currency exposure previously described, the Group believes that its short-term currency exposure is not material. The Group’s sensitivity to longterm currency exposure is primarily influenced by the net equity of the subsidiaries whose functional currency is the dollar and, to a lesser extent, the pound sterling and the Norwegian krone. This sensitivity is reflected by the historical evolution of the currency translation adjustment imputed in the statement of changes in shareholders’ equity which, in the course of the last three fiscal years, is essentially related to the evolution of the dollar and is set forth in the table below: Currency translation Euro/Dollar adjustments exchange rates (in M€) As of December 31, 2006 1.32 (1,383) As of December 31, 2005 1.18 1,421 As of December 31, 2004 1.36 (1,429) The non-current debt in dollars described in note 20 to the consolidated financial statements is generally raised by the central treasury entities either in dollars or in euros, or in other currencies which are then systematically exchanged for dollars or euros according to the general corporate purposes, through issue swaps. The proceeds from these debt issuances are principally loaned to affiliates whose accounts are kept in dollars and any remaining balance is held in dollar-denominated investments. Thus, the net sensitivity of these positions to currency exposure is not material. Short-term currency swaps for the nominal amounts appear in note 27 to the consolidated financial statements are used with the aim of optimizing the centralized management of the cash of the Group. Thus the sensitivity to currency fluctuations which may be induced is likewise considered negligible. As a result of this policy, the impact of currency exchange on consolidated income, as illustrated in note 7 to the consolidated financial statements, has not been significant despite the considerable fluctuation of the dollar (loss of 30 M€ in 2006, gain of 76 M€ in 2005 and loss of 75 M€ in 2004). Appendix 1 – Consolidated financial statements Notes to the consolidated financial statement 9 Management of counterparty risk The Group has established standards for market transactions according to which bank counterparties must be approved in advance, based on an assessment of the counterparty’s financial soundness and its rating (Standard & Poors, Moody’s), which must be of high quality. An overall authorized credit limit is set for each bank and is divided among the subsidiaries and the Group’s central treasury entities according to their needs. Stock Market risk The Group holds interests in a number of publicly-traded companies (see note 13 to the consolidated financial statements). The market values of these holdings fluctuate due to various factors, including stock market trends, valuations of the sectors in which the companies operate, and the economic and financial condition of each individual company. Liquidity risk TOTAL S.A. has confirmed lines of credit granted by international banks, which would allow it to manage its short-term liquidity needs as required. The total amount of these lines of credit as of December 31, 2006, was $7,701 million, of which $7,649 million was unused. The terms and availability of these lines of credit are not conditioned on the Company’s financial ratios, its financial ratings or on the absence of events that could have a material adverse impact on its financial situation. The total amount, as of December 31, 2006, of confirmed lines of credit granted by international banks to Group companies, including TOTAL S.A., was $11,638 million of which $9,268 million was unused. Lines of credit given to Group companies other than TOTAL S.A. are not used for general Group purposes. They are used to finance general activities of that company or for specific projects. TOTAL – Registration Document 2006 229
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Registration Document 2006
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Registration Document 2006 This is
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Key figures Selected financial info
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116,842 Key figures Operating and m
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Refined product sales including Tra
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Business overview History and strat
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Upstream TOTAL’s Upstream segment
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Exploration & Production Exploratio
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Production For the full year 2006,
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Presentation of production activiti
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Europe Business overview Exploratio
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Africa TOTAL has been present in Af
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this zone through its subsidiaries
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North America Since 2004, TOTAL has
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Trinidad & Tobago TOTAL holds a 30%
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TOTAL also has a 50% interest in th
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Europe TOTAL’s production in Euro
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K6-GT platform, in anticipation of
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The Group also holds a 20% interest
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Gas & Power The Gas & Power divisio
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Asia Pacific The Hazira re-gasifica
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In Morocco, Temasol, in which TOTAL
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Refining & Marketing As of December
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Refined products The table below se
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capacity oil recycling plant in Fra
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In 2006, the principal market bench
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Base Chemicals TOTAL’s Base Chemi
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Specialties TOTAL’s Specialties s
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Investments Main investments made o
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Property, Plant and Equipment TOTAL
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Board of Directors Executive Commit
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Management Report of the Board of D
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Market environment 2006 2005 2004 E
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Upstream results Liquids and gas pr
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Downstream results For the full yea
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Liquidity and capital resources Lon
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Research and development Research a
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Trends and outlook Outlook Since th
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Risk Factors Market risks p. 76 •
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The Group has implemented strict po
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The non-current debt in dollars des
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Grande Paroisse An explosion occurr
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Myanmar Under the Belgian “univer
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Risk management Risk evaluations le
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TOTAL, like other major internation
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Insurance and risk management Organ
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Corporate Governance Board of Direc
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Daniel Bouton 56 years old. Inspect
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Bertrand Jacquillat 62 years old. A
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Michel Pébereau 64 years old. Hono
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Management General Management On Ma
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Corporate Governance Compensation o
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Pensions and other commitments (Art
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Within this framework, the Board’
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Members of the Audit Committee may
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Messrs. Bouton, Collomb, Desmarais,
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establishes and maintains procedure
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Employees, Share Ownership, Stock O
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Corporate Governance Employees, Sha
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TOTAL stock options Corporate Gover
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Restricted share plans as of Decemb
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TOTAL and its shareholders Listing
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Four-for-one stock split The Genera
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Information Summary TOTAL and its s
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Dividends Dividend policy In accord
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Share buybacks The General Meeting
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Summary table of transactions compl
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cancels and replaces the unused por
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which was approved by the French Co
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Shareholder structure Distribution
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Non-resident individual taxpayers e
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The Committee also worked on the co
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2007 Calendar February 14 Results f
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Financial information Historical fi
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Additional information Financial in
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General information Share capital p
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Pursuant to this authorization, the
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Potential capital as of December 31
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General information Share capital J
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Directors’ Charter and Committees
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Other matters Employee incentives a
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Information on holdings General inf
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Statutory auditors’ report on the
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Consolidated statement of income TO
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Consolidated statement of cash flow
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On February 13, 2007, the Board of
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G. Earnings per share Earnings per
Page 179 and 180: equal to the market price. For unli
Page 181 and 182: The net periodic pension cost is re
Page 183 and 184: (iii) Portion of intangible assets
Page 185 and 186: A. Information by business segment
Page 187 and 188: Appendix 1 - Consolidated financial
Page 195 and 196: ADJUSTMENTS TO OPERATING INCOME 200
Page 197 and 198: In 2006, gains and losses on sales
Page 201 and 202: Property, plant and equipment prese
Page 203 and 204: 14) Other non-current assets As of
Page 205 and 206: The variation of the weighted-avera
Page 207 and 208: 18) Employee benefits obligations P
Page 209 and 210: The components of the net periodic
Page 211 and 212: 20) Financial debt and related fina
Page 215 and 216: Impact on net income The amount of
Page 217 and 218: 23) Commitments and contingencies A
Page 219 and 220: Other guarantees given Non-consolid
Page 223 and 224: 25) Payroll and staff For the year
Page 225 and 226: The classification by strategy and
Page 227 and 228: B) Financial instruments related to
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Page 233 and 234: 3) The Group has recorded provision
Page 237 and 238: 53.2% 95.7% Elf Aquitaine 99.5% 100
Page 239 and 240: Oil and gas reserves p. 238 • Cha
Page 241 and 242: Changes in liquids reserves Appendi
Page 243 and 244: Changes in liquids and gas reserves
Page 245 and 246: Costs incurred in oil and gas prope
Page 247 and 248: Appendix 2 - Supplemental oil and g
Page 249 and 250: Other information Accounting for ex
Page 251 and 252: Appendix 3 - TOTAL S.A. Special aud
Page 253 and 254: (Free translation of a French langu
Page 255 and 256: Balance Sheet (TOTAL S.A.) Appendix
Page 257 and 258: Statement of changes in Shareholder
Page 259 and 260: 2) Property, plant and equipment As
Page 261 and 262: 6) Shareholders’ equity A) Common
Page 263 and 264: 7) Contingency reserves As of Decem
Page 265 and 266: 11) Translation adjustment The appl
Page 267 and 268: 20) Commitments As of December 31 (
Page 269 and 270: TOTAL share purchase options plans
Page 271 and 272: Appendix 3 - TOTAL S.A. Parent comp
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Page 275 and 276: Distribution of earnings 2006 Net d
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Page 279 and 280: AVERAGE COMPENSATION PER MONTH - TO
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Environment Pursuant to French law
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Consolidated financial information
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European Cross Reference List 10. C
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TOTAL S.A. Registered Office: 2, pl
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Registration document 2007 - Total.com

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