Disclosure AnalysisThe company chosen for my disclosure analysis is the company I work for Total, S.A.; Total’s corporate offices are located in France with corporate offices located in Houston, Texas, with offices in several countries and three plant sites here in Texas. The company offers services in refining of petrochemicals, oil and gas, mining, and polyethylene (which creates the plastic bags or containers that hold food products such as vegetables or fruit found in supermarkets), polypropylene (which makes the lids for plastic bottles or jars- harder plastic that that of bags), then polystyrene (which makes the plastic utensils or Styrofoam cups, plates and bowls found in restaurants and supermarkets for food storage).
I recently read on Facebook that Total’s CEO, John P. Hines, and his team at Total’s International headquarters are conducting a $45 million capital expenditure to acquire a 1.4 percent shareholding in the company. Hines believes that total has the potential to be one of the 10 largest publicly traded and privately held corporations in the world. In fact, Hines recently stated that Total’s investment portfolio is valued at about $60 billion and with a market capitalization of about $10 billion he anticipates, he expects Total to raise an additional $40 billion by 2013 to bring total to some $180 billion. I’ve had no problems with his comments, but I can imagine that Hines is a bit nervous about a potential situation where Total can become one of the biggest publicly traded and privately held companies. If it is the case that Hines cannot be trusted and has no idea what his business is all about, then I doubt that this will be a long-term success in his new company (which he said is worth at least $1 billion if he isn’t successful).
Total, which is headquartered in San Diego, California and plans to use its full $90 million capital investment to help its investors to purchase shares in the company, has already amassed a $1 billion valuation before investing that money back into other private equity positions. So I wouldn’t rule out the possibility of Total being acquired to begin with by a small minority investor, but even if those investors were allowed to be aggressive, it wouldn’t be hard to believe that Total has already done what this company does best with its holdings of short-term capital—in a strategy that is ultimately profitable for the company.
In my final article and in an interview with Bloomberg Businessweek in June 2012, John P. Hines said that he expects total to make an initial public offering of $1 million or more for cash on hand, and to hold shares in Total, which is the top of the market in terms of the annual financial report and some of its share and cash price indexes. Last November, I wrote that Total’s stock price had reached $1,500 and the stock had gained an average of less than $10 per share. The last time the stock spiked was in August 2004, or a year from July 2005. In response to an audience question about investors going after the company, Hines said “the public is very smart about selling stock that has high upside and has been highly valued in the past.” But because of that prediction, I’ll give the impression today that this has yet to occur.
The same is true for total. Hines had a speech at the 2013 American International Business Conference stating that because the total is the largest publicly traded company, the company’s portfolio is no doubt going to benefit. The company has been able to invest heavily in the stock price because of the presence of
In viewing the most recent financial statements submitted by Total S.A. on March 26, 201 on EDGAR, the reports had many notes attached to various sections throughout statements. Within the first part of the notes was an explanation of the business combinations and how they are accounted for by acquisition method; implies recognition of all acquired identifiable assets, assumed liabilities and non-controlling interests in the companies acquired by the Group at fair value.
Consideration transferred is lower than fair value of acquired identifiable assets and assumed liabilities; any residual badwill is recorded as income. Monetary transactions are translated into the functional currency of the entry. At each balance sheet date, monetary assets and liabilities are translated at the closing rate and the resulting exchange differences are recognized in the statement of income.
Sales figures include excise taxes collected by the Group within the course of oil distribution operations. Revenues from sales recognized when significant risk and rewards of ownership passed to buyer. Revenues from sales of crude oil, natural gas and coal are recorded upon transfer of title. Revenues from services recognized when services are rendered. Exploration costs, geological and geophysical costs, including seismic surveys are expensed as incurred. Development costs incurred for drilling of wells and construction of production facilities are capitalized- depletion rate equals ratio of oil and gas production for the period.
Since there is project work being recorded for work in other countries, they are listed separately and the percentage of work completed that makes of final totals for revenue of the year are listed in notes sections explaining the totals recognized for each individual site or country location.