2014 Group results

Table : 2014 Group results

Table : Market environment

Table : Adjustments to operating income

Table : Adjustments to net income (Group share)

Sales

Consolidated sales in 2014 were $236,122 million compared with $251,725 million in 2013, a decrease of 6%.

Operating income from business segments

The average Brent price decreased by 9% to 99 $ / b in 2014. The European Refining Margin Indicator (ERMI) was 18.7 $ / t compared to 17.9 $ / t in 2013, an increase of 4%. The environment for petrochemicals also improved, notably in the United States. The euro-dollar exchange rate was 1.33 $ / €, unchanged compared to 2013.

In this context, the adjusted operating income from the business segments was $21,604 million, a decrease of 22% from 2013. The effective tax rate (1) for the business segments was 51.2% compared to 55.5% in 2013.

Adjusted net operating income from the business segments was $14,247 million compared to $15,861 million in 2013, a decrease of 10%. This decrease was due essentially to the impact of lower Brent prices on Upstream results, partially offset by a higher contribution from downstream activities.

Net income (Group share)

The adjusted net income was $12,837 million compared with $14,292 million in 2013, a decrease of 10%, essentially due to the fall in Brent prices. Adjusted net income excludes the after-tax inventory effect, special items and the effect of changes in fair value:

  • The after-tax inventory effect had a negative impact of $2,453 million in 2014 and a negative impact of $728 million in 2013.
  • The effect of changes in fair value had a positive impact of $25 million in 2014 compared to a negative impact of $58 million in 2013.
  • Other special items in the net income had a negative impact of $6,165 million in 2014, mainly including $7.1 billion of impairments. Taking into account the current economic environment, the Group impaired its oil sands assets in Canada by approximately $2.2 billion, its unconventional gas notably in the United States by $2.1 billion, its refining in Europe by $1.4 billion, as well as certain other assets in the Upstream. These impairments were partially offset by the gain on the sale of the Group’s interests in Shah Deniz in Azerbaijan and GTT (Gaztransport et Technigaz). Special items had a negative impact of $2,278 million in 2013.

In this context, the net income (Group share) was $4,244 million compared to $11,228 million in 2013, a decrease of 62%.

The effective tax rate for the Group was 53.0%, compared to 56.8% in 2013. This variation is due principally to the benefit of tax allowances in the UK in the second quarter 2014 which lowered the average rate in the Upstream and the higher contribution from downstream, which benefits from a lower tax rate.

On December 31, 2014, there were 2,285 million fully-diluted shares compared to 2,276 million shares on December 31, 2013.

The adjusted fully-diluted earnings per share, based on 2,281 million fully-diluted weighted-average shares, was $5.63 compared with $6.29 in 2013.

Expressed in euros, adjusted fully-diluted earnings per share was €4.24, a decrease of 11%.

Investments – divestments

Investments, excluding acquisitions and including changes in non-current loans, were $26.4 billion in 2014, a decrease of 7% compared to 2013.

Acquisitions were $2,539 million in 2014, comprised principally of the acquisition of an interest in the Elk and Antelope discoveries in Papua New Guinea, the acquisition of an additional stake in OAO Novatek (2) and the carry on the Utica gas and condensate field in the United States.

In 2014, asset sales were $4,650 million, comprised essentially of the sale of interests in Shah Deniz and the associated pipelines in Azerbaijan, Block 15 / 06 in Angola, GTT (Gaztransport & Technigaz) and the Cardinal midstream assets in the United States.

Net investments (3) were $24.1 billion compared with $25.9 billion in 2013, a decrease of 7%.

Profitability

The ROACE in 2014 was 11.1% for the Group, a decrease of 1.9% compared to 2013. Return on Equity (ROE) was 13.5% in 2014, compared to 14.9% in 2013.


(1) Defined as: (tax on adjusted net operating income) / (adjusted net operating income – income from equity affiliates – dividends received from investments + tax on adjusted net operating income).
(2) The Group held an 18.24% stake in OAO Novatek as of December 31, 2014.
(3) Net investments = investments including acquisitions and changes in non-current loans – sales – other transactions with non-controlling interests.