Registration document 2007 - Total.com
Registration document 2007 - Total.com
Registration document 2007 - Total.com
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7) Contingency reserves<br />
As of December, 31 2006<br />
Gross amount at Increases Decreases Gross amount<br />
(in M€) beginning of year Used Not used at end of year<br />
Reserve for financial risks 1,249 326 164 - 1,411 (a)<br />
Reserves for retirement benefits, pension<br />
plans and special termination plans (note 8) 98 26 16 - 108 (b)<br />
Reserves for non-recurring items 33 39 29 - 43<br />
<strong>Total</strong> 1,380 391 209 - 1,562<br />
(a) Reserves for financial risks are mainly <strong>com</strong>posed of:<br />
- a guarantee granted to an upstream financing subsidiary for 1,021 M€;<br />
- a reserve recorded for 138 M€ to cover the risks incurred by the attribution of Arkema shares;<br />
- a reserve of 113 M€ for the attribution of restricted shares. The calculation was based on the value of the shares bought on plan cover prorated basis to the period of acquisition, ie:<br />
two years, at the end of which the attribution of the shares to their beneficiary will be final, subject to the condition of performance is satisfied (note 22).<br />
(b) Including 101M€ related to reserves for retirement benefits, pension plans, special termination plans and a provision of 7 M€ for long-service medal.<br />
8) Employee benefit obligations<br />
TOTAL S.A. enters into employee benefit and pension plans, pre-retirement and special termination benefits. Expenses for defined<br />
contribution and multi-employers plans correspond to the contributions paid.<br />
Provisions as of December 31 are as follows:<br />
(in M€) 2006 2005<br />
Pension benefits and other benefits 101 90<br />
Restructuring reserves - 3<br />
Provisions as of December 31 101 93<br />
For defined benefit plans, <strong>com</strong>mitments are determined using a prospective methodology called “projected unit credit method”.<br />
The actuarial estimate depends on various factors such as the length of service, life expectancy, employee turnover rate, salaries<br />
revalorization and actualization assumptions.<br />
The actuarial assumptions used as of December 31, are the following:<br />
2006 2005<br />
Actuarial rate 4.24% 4%<br />
Average expected rate of salary increase 4.14% 4.14%<br />
Average expected rate of return on plan assets 5.35% 4.91%<br />
Average remaining length of service 10-20 years 10-20 years<br />
Commitments not covered through insurance <strong>com</strong>panies are accrued for in TOTAL S.A. accounts.<br />
Appendix 3 - TOTAL S.A.<br />
Parent <strong>com</strong>pany’s statutory financial statements<br />
Actuarial gains and losses resulting from changes in actuarial assumptions are amortized using the straight-line method over the estimated<br />
remaining length of service of the plans participants involved.<br />
The reconciliation between the total <strong>com</strong>mitment for pension plans not covered through insurance <strong>com</strong>panies and the provision booked is<br />
as follows:<br />
(in M€) 2006 2005<br />
Actuarial liability as of December 31 191 267<br />
Actuarial gains (losses) to be amortized (90) (177)<br />
Provision for pension benefits and other benefits as of December 31 101 90<br />
11<br />
TOTAL - <strong>Registration</strong> Document 2006 261