In 2000, Repsol YPF net income was 140.2% up on 1999, at 2,429 million euros. Net cash-flow was 6,302 million euros, in comparison to 3,182 million euros the year before, and operating income rose 137.4% on year earlier figures, to 6,242 million euros. Operating revenues were 45,742 million euros, 73.9% higher than in 1999.

  2000 was the first full year of YPF consolidation. The company�s new business structure, as a result of integration, has made Repsol YPF increasingly more balanced and international. In fact, only 35% of income came from the Spanish market last year. As a result of the new company�s management practices, cost saving and synergies of over 300 million euros have been achieved.

The Repsol YPF income statement for 2000 received the following positive influences:

1.- Production in all the business areas was increased by the first full year consolidation of YPF.

2. - High oil prices. The average price of Brent oil rose from $17.9 per boe in 1999 to $28.4 per boe in 2000

3. - Good international refining margins. The refining margin index in Spain during 2000 was $3.4 per barrel, and more than doubled the average for 1999.

4. - High growth in the gas area, especially in Latin America.

5. - Better margins in the chemical business.

In contrast, during 2000 there were some negative factors, including a fall in marketing margins on oil products, because of the Repsol YPF policy of moderation in sales prices, and a price freeze on bottled LPG (butane and propane) in Spain which lasted practically throughout the year.

Investment for the year 2000 was 6,118 million euros. 2,303 million euros were invested in the exploration and production business area, mostly for the development of fields and acquisitions; 1,289 million euros were invested in refining & marketing and GLP to upgrade refining units and the commercial network. 2,063 million euros were invested in the gas & power sector, mainly for the acquisition of gas distributing companies in Mexico and Brazil, and the extension of the natural gas transmission and distribution infrastructure; and 356 million euros were invested in the chemical sector. Corporate investments were 107 million euros.

By areas of activities, these are the highlights for 2000:

In Exploration and Production, operating income was 3,864 million euros as compared to 1,186 million euros in 1999. This sharp rise was mostly the effect of the full year incorporation of YPF, plus an increase of over $10 per barrel in oil prices. Net proved hydrocarbon reserves at December 31^st 2000 were 4,778 Mboe, in comparison to 4,535 Mboe at the close of 1999. Production in 2000 was 368 million boe (1,005,000 boepd) in comparison to 243 million boe in 1999. The rate at which production was replaced with new reserves was 166%.

Operating income from the Refining & Marketing area was 1,323 million euros, and showed a year-on-year rise of 31.1%. Strong refining margins and the optimisation of operations at the refineries explains this important growth in income. The foregoing also made up for a substantial narrowing of marketing margins because of difficulty in raising retail prices to fully cover higher international cost prices for gasoline and gas-oil. There was also lower income from LPG because of a price freeze on bottled LPG in Spain, which lasted practically throughout the year.

Repsol YPF oil product sales were 51.4 million tonnes, showing an increase of 12.1%, with 49% of overall sales in Spain.

Operating income from Chemicals was 15.1% higher than that for the previous year at 152 million euros. This improvement was mostly due to improved results from base petrochemicals (ethylene and propylene production units), in contrast to derivative chemicals where performance was curtailed by a sharp fall in margins. Total sales of petrochemical products were 2.8 million tonnes, some 13% higher than in 1999.

 In Natural Gas and Power operating income was 1,006 million euros in comparison to 396 million euros in 1999. This improvement was mainly the result of consolidating 100% of Gas Natural SDG results from the beginning of this year, higher sales to the residential-commercial sector through growth in the customer list in Spain and Latin America, and to the industrial sector as the result of a good economic situation in Spain and commercial expansion in the Latin American countries where Repsol YPF operates.

The full customer list to which Repsol YPF distributes natural gas directly or indirectly is 8,896,000 of which 3,608,000 are in Spain and the remainder in Latin America. Total gas sales, at 238.6 billion thermies, rose 112.9% in comparison to 1999.

  International Expansion

The international expansion initiated several years ago culminated in the acquisition in 1999 of the Argentine company YPF, which was a turning point for Repsol in taking on the dimensions of a multinational company. In 2000, Repsol YPF has continued to progress in this direction. Several agreements and acquisitions took place during the year, bringing the company closer to its strategic goals and progressing in the construction of a great multinational company.  

During 2000, Repsol YPF has continued its asset divestment policy as part of its strategic commitment to gradually reduce debt level. Since June 1999, following the YPF acquisition, funds obtained from asset divestment have amounted to $2,127 million. To date in 2001, Repsol YPF divestments have generated $478 million.

The latest divestments were exploration and production assets in the Western Desert of Egypt, and a 36% stake in the Trasandino pipeline that carries oil from Argentina to Chile.

Repsol YPF, in line with its ongoing policy of dividend growth, raised the interim dividend against 2000 by 19% in comparison to 1999, paying out 0.19 euros per share.

	January-December		Rise
	1999	2000	%
Operating revenues	26,295	45,742	73.9
Operating income	2,629	6,242	137.4
Financial results	(726)	(1,300)	(79.0)
Equity on earnings of unconsolidated affiliates	59	72	22.0
Goodwill amortization	(132)	(270)	(104.5)
Extraordinary items	(87)	(419)	(381.6)
Income before income tax and minority interest	1,743	4,325	148.1
Income tax	(557)	(1,408)	(152.8)
Net income before minority interests	1,186	2,917	145.9
Minority interest	(175)	(488)	(178.8)
Net income	1,011	2,429	140.2
Cash-flow after taxes	3,182	6,302	98.1

			January-December		Variation
			1999	2000	%
Exploration & Production			1,186	3,864	225.8
Refining, Marketing			1,009	1,323	31.1
Chemicals			132	152	15.1
Natural Gas & Power			396	1,006	154.0
Corporate and others			(94)	(103)	(9.6)
TOTAL			2,629	6,242	137.4

			January-December		Variation
			1999	2000	%
Hydrocarbon production (Million boe)			243.4	367.7	51
Sales of oil products (Million tons)			45.8	51.3	12.1
Sales of petrochemical products (Million tons)			2.5	2.8	13
Sales of natural gas (Million thermies)			112,074	238,600	112.9

		DECEMBER	DECEMBER
		1999	2000
Net fixed assets		33,313	40.585
Long term financial assets		149	217
Cash and current investments		1,707	2,058
Other current assets		6,881	9,559
TOTAL ASSETS		42,050	52,419
Shareholders� equity		12,526	15,143
Provisions		1,099	1,576
Minority interests		1,870	3,522
Non interest bearing liabilities		2,074	2,824
Long term financial debt		10,223	14,886
Short term financial debt		8,769	7,187
Other current liabilities		5,489	7,281
TOTAL EQUITY AND LIABILITIES		42,050	52,419