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EXHIBIT (b)(5)
Preliminary Materials Presented
at
Special Committee Meeting
on
December 2, 1997
2
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Goldman Highly Confidential
Sachs
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FINA, Inc.
Discussion Materials
Goldman, Sachs & Co.
December 2, 1997
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Table of Exhibits
Exhibit
Comparison of Original and Revised Corporate Plan 1
Trading History of Comparable Companies 2
Summary of Valuation Analysis 3
Appendix
Supplementary Information A
Goldman, Sachs & Co.
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Exhibit 1
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Observations on Revised Projections
o "Goal-oriented" v. "Realistic"
-- balance sheet constraints
o Chemicals
-- volumes relatively unchanged
-- significant margin pressure in 1998
-- cyclical downturn longer and more severe than previously anticipated
-- capital spending modestly lower
o Exploration & Production
-- volumes significantly reduced beginning in 1998
-- net pricing relatively unchanged
-- capital spending reduced by $230 million over plan period
o Refining & Marketing
-- modest increases in throughput
-- net margins show modest improvement in 1998, decline thereafter
-- capital spending reduced and delayed until 1999
o Steam Cracker Project
-- over $350 million in capital spending
-- attractive investment justified by conservative economics
Goldman, Sachs & Co.
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Comparison of Original and Revised Projections
FINA Consolidated
1997E 1998E 1999E 2000E 2001E CAGR
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EBITDA
April 97 $474.0 $547.5 $650.9 $746.0 $860.7 16.1%
November 97 455.9 458.2 554.0 626.6 861.3 17.2
Variance (3.8)% (16.3)% (14.9)% (16.0)% 0.1%
DCF
April 97 $364.3 $403.5 $488.1 $590.6 $700.9 17.8%
November 97 369.1 349.7 415.2 485.0 596.8 12.8
Variance 1.3% (13.3)% (14.9)% (17.9)% (14.9)%
EPS
April 97 $5.10 $6.13 $7.42 $9.27 $11.63 22.9%
November 97 4.64 4.43 6.01 7.28 11.02 24.1
Variance (9.0)% (27.7)% (19.0)% (21.5)% (5.2)%
Goldman, Sachs & Co.
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Exhibit 2
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Trading Histories
Market Benchmarks
20% Premium
% Growth Implied to Implied
2/24/97 to 11/28/97 Stock Price (a) Stock Price
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Dow Jones 11.6% $55.95 $67.14
S&P 400 17.8 59.07 70.88
Domestic Integrateds 12.9 56.60 67.92
Exploration & Production 0.4 50.31 60.37
Refining & Marketing 23.3 61.79 74.15
Commodity Chemicals 15.7 58.01 69.61
Current Stock Price (11/28/97) $65.50
(a) FINA's closing share price of $50.13 as of February 24, 1997, one day prior
to PetroFina's announcement and adjusted by relevant stock price
appreciation since 2/24/97.
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Comparison of Selected Trading Multiples
By Industry Segment
Median Multiples, Excluding FINA
[The following table was depicted as a bar chart in the printed material.]
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Domestic Integrated Oils
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P/DCF-1997E
April (a) June (b) November (c)
5.2x 5.9x 6.2x
% Change 13.5% 19.2%
[The following table was depicted as a bar chart in the printed material.]
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Domestic Integrated Oils
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P/E-1997E
April (a) June (b) November (c)
13.9x 15.7x 15.6x
% Change 12.9% 12.2%
[The following table was depicted as a bar chart in the printed material.]
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Independent Refining Companies
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P/DCF-1997E
April (a) June (b) November (c)
6.1x 6.6x 6.2x
% Change 8.2% 1.6%
[The following table was depicted as a bar chart in the printed material.]
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Independent Refining Companies
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P/E-1997E
April (a) June (b) November (c)
18.7x 19.0x 14.3x
% Change 1.6% (23.5)%
(a) As of April 4, 1997.
(b) As of June 3, 1997.
(c) As of November 28, 1997.
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Comparison of Selected Trading Multiples
By Industry Segment
Median Multiples, Excluding FINA
[The following table was depicted as a bar chart in the printed material.]
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Exploration and Production Companies
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P/DCF-1997E
April (a) June (b) November (c)
4.8x 5.7x 5.7x
% Change 18.8% 18.8%
[The following table was depicted as a bar chart in the printed material.]
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Commodity Chemicals
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Enterprise Value/EBITDA-Normalized
April (a) June (b) November (c)
5.2x 4.9x 5.3x
% Change (5.8)% 1.9%
(a) As of April 4, 1997.
(b) As of June 3,1997.
(c) As of November 28, 1997.
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Exhibit 3
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Summary of Valuation Benchmarks
June 5, 1997 December 2, 1997
Update (a) Update (b)
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Stock Price (c) $67.25 $65.50
Valuation Benchmarks (d) Low High Low High
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Domestic Integrated Comps
1997E DCF $63 $76 $66 $80
P/E 73 88 65 80
1998E DCF 62 75 59 72
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P/E 78 94 58 70
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Weighted-Average Comps
1997E DCF $65 $78 $64 $78
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P/E 72 87 56 69
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Asset Valuation $52 $60 $44 $52
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DCF Analysis $60 $68 $40 $46
PV of Future Stock Prices $56 $69 $47 $57
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Cash EPS Breakeven $55 $80 $55 $80
Stock EPS Breakeven $51 $66 $51 $65
(a) Based on April 1997 projections and prior Special Committee presentation.
(b) Based on November 1997 projections and a valuation methodology consistent
with June 5, 1997 Special Committee presentation.
(c) As of June 3, 1997 and November 28, 1997, respectively.
(d) Valuation methodology consistently applied.
Goldman, Sachs & Co.
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FINA
Summary of Sensitivity Analysis
$ Change in $ Change in
1998 EBIT (mm) Value per Share (a)
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Exploration & Production
CERA crude oil prices (b) $(1.2) $(1.27)
CERA natural gas prices (b) (18.7) (4.07)
Refining & Marketing
Original Big Spring margins (c) $(11.5) $(0.48)
Chemicals (d)
Styrene $8.4 $(0.36)
Polystyrene 31.0 2.56
Polypropylene 45.4 2.92
Polyethylene 10.8 (0.20)
Steam Cracker (e) $0.0 $ 2.32
(a) Value per share represents the present value, at a 10% discount rate, of
FINA's projected free cash flows for the period 1997-1999 and 13% for the
period 2000-2001.
(b) Source: Cambridge Energy Research Associates' Oil and Natural Gas Outlook
as of 11/18/97 (Boom/Bust Scenario).
(c) Source: FINA 1997 Corporate Plan as of April 4, 1997.
(d) Source: Chem Systems margin projections based on Petroleum and
Petrochemical Economics Executive Report "Price Forecasts for U.S.
Petrochemicals and Polymers" (Base Cycle Case/Leader).
(e) Based on FINA's projections as of November 1997; represents the present
value, at a 13% discount rate, of 1997-2001 cash flows, with terminal
value of 5.5 times 2002 estimated discretionary cash flow discounted back
to year-end 2001.
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Appendix A
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Comparison of Original and Revised Projections
(dollars in millions)
1997E 1998E 1999E
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Apr-97 Nov-97 % Var. Apr-97 Nov-97 % Var. Apr-97 Nov-97 % Var.
------ ------ ------ ------ ------ ------ ------ ------ ------
EBITDA ------- ------- -------
Chemicals $205.8 $153.2 (25.6)% $243.0 $162.7 (33.0)% $271.8 $257.5 (5.3)%
E&P 157.5 170.2 8.1% 158.0 156.9 0.6% 212.6 164.5 (22.6)%
R&M 123.6 146.9 18.9% 162.1 150.2 (7.3)% 180.6 145.4 (19.5)%
Total 474.0 455.9 (3.8)% 547.5 457.5 (16.4)% 650.9 554.0 (14.9)%
EBIT
Chemicals $176.5 $123.7 (29.9)% $208.0 $128.4 (38.3)% $230.6 $208.3 (9.7)%
E&P 64.1 72.3 12.8% 57.7 67.4 16.8% 95.9 79.8 (16.8)%
R&M 55.3 78.6 42.1% 89.3 77.8 (12.9)% 104.9 71.1 (32.2)%
Corporate (17.8) (22.1) 24.2% (18.6) (21.3) 14.5% (19.0) (22.3) 17.4%
Total 278.1 252.5 (9.2)% 336.4 252.3 (25.0)% 412.4 336.9 (18.3)%
DCF
Chemicals $132.7 $130.9 (1.4)% $131.5 $104.2 (20.8)% $155.4 $145.4 (6.4)%
E&P 122.3 144.6 18.2% 128.1 115.9 (9.5)% 169.7 129.8 (23.5)%
R&M 80.7 75.8 (6.1)% 107.1 99.7 (6.9)% 118.5 97.9 (17.4)%
Total 364.3 369.1 1.3% 403.5 349.7 (13.3)% 488.1 415.2 (14.9)%
Net Income $159.3 $145.0 (9.0)% $191.3 $138.4 (27.7)% $231.5 $187.5 (19.0)%
EPS $5.10 $4.64 (9.0)% $6.13 $4.43 (27.7)% $7.42 $6.01 (19.0)%
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2000E 2001E
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Apr-97 Nov-97 % Var. Apr-97 Nov-97 % Var.
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EBITDA
Chemicals $319.4 $302.7 (5.2)% $376.2 $469.2 24.7%
E&P 247.5 141.1 (43.0)% 289.4 182.8 (36.8)%
R&M 193.6 149.9 (22.6)% 209.8 158.4 (24.5)%
Total 746.0 626.6 (16.0)% 860.7 861.3 0.1%
EBIT
Chemicals $278.2 $253.5 (8.9)% $335.1 $394.1 17.6%
E&P 122.4 95.9 (21.7)% 159.2 142.1 (10.7)%
R&M 114.1 72.4 (36.5)% 127.4 79.6 (37.5)%
Corporate (19.4) (24.8) 27.8% (19.8) (25.3) 27.8%
Total 495.3 397.0 (19.8)% 601.9 590.6 (1.9)%
DCF
Chemicals $203.3 $196.8 (3.2)% $253.1 $288.4 13.9%
E&P 196.2 141.1 (28.1)% 226.4 182.8 (19.3)%
R&M 132.8 102.1 (23.1)% 159.7 105.8 (33.7)%
Total 590.6 485.0 (17.9)% 700.9 596.8 (14.9)%
Net Income $289.4 $227.2 (21.5)% $363.0 $343.9 (5.3)%
EPS $9.27 $7.28 (21.5)% $11.63 $11.02 (5.3)%
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Notes:
Original projections based on FINA, Inc. 1997 Corporate Plan finalized in
November/December 1996.
Revised projections based on 1997 Five Year Financial Plan updated in April and
November 1997.
Financial data based on management projections.
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Comparison of Original and Revised Projections
1997E 1998E 1999E
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(dollars in millions) Apr-97 Nov-97 % Var. Apr-97 Nov-97 % Var. Apr-97 Nov-97 % Var.
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Principal Factors Behind Revised Estimates
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Chemicals
Styrene Margin (cents/lb) 2.17 2.30 6.0% 2.63 1.90 (27.8)% 3.70 3.50 (5.4)%
Styrene Volumes (MMLbs) 1,306 1,354 3.6% 1,350 1,399 3.6% 1,300 1,319 1.5%
Polystyrene Margin (cents/lb) 2.35 1.10 (53.2)% 2.80 2.00 (28.6)% 3.13 3.00 (4.2)%
Polystyrene Volumes (MMLbs) 1,050 983 (6.4)% 1,100 1,107 0.6% 1,100 1,120 1.8%
Polypropylene Margin (cents/lb) 6.00 3.55 (40.8)% 6.00 3.25 (45.8)% 4.80 3.80 (20.8)%
Polypropylene Volumes (MMLbs) 1,438 1,390 (3.3)% 1,600 1,540 (3.8)% 1,750 1,850 5.7%
HDPE Margin (cents/lb) 7.50 5.95 (20.7)% 6.25 4.25 (32.0)% 6.60 5.40 (18.2)%
Polyethylene Volumes (MMLbs) 400 375 (6.3)% 590 460 (22.0)% 825 825 0.0%
Refining & Marketing
SEBU
Throughput (MBD) 178 176 (1.1)% 178 178 0.0% 178 181 1.7%
Gross Margin ($/Bbl) $3.28 $3.80 15.9% $3.50 $3.50 0.0% $3.69 $3.50 (5.1)%
SWBU
Throughput (MBD) 53 57 8.3% 57 61 6.1% 59 61 3.1%
Gross Margin ($/Bbl) $4.00 $4.90 22.5% $4.11 $4.60 11.9% $4.23 $4.60 8.7%
Exploration and Production
Crude Oil Price ($/Bbl) $18.64 $17.95 (3.7)% $17.45 $16.70 (4.3)% $18.08 $17.25 (4.6)%
Natural Gas Price ($/Mcf) 2.25 2.60 15.6% 2.14 2.45 14.5% 2.18 2.40 10.1%
Crude Oil Volume (MBD) 10.5 10.0 (4.8)% 13.4 9.5 (29.1)% 17.1 9.4 (45.0)%
Natural Gas Volume (MMcf/D) 195.3 186.0 (4.8)% 220.5 197.0 (10.7)% 265.2 219.4 (17.3)%
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2000E 2001E
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(dollars in millions) Apr-97 Nov-97 % Var. Apr-97 Nov-97 % Var.
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Principal Factors Behind Revised Estimates
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Chemicals
Styrene Margin (cents/lb) 3.49 4.00 14.6% 3.75 4.75 26.7%
Styrene Volumes (MMLbs) 1,360 1,300 (4.4)% 1,610 1,300 (19.3)%
Polystyrene Margin (cents/lb) 5.00 5.00 0.0% 6.00 5.50 (8.3)%
Polystyrene Volumes (MMLbs) 1,125 1,145 1.8% 1,125 1,145 1.8%
Polypropylene Margin (cents/lb) 5.70 3.80 (33.3)% 7.20 5.20 (27.8)%
Polypropylene Volumes (MMLbs) 1,825 1,950 6.8% 1,900 2,050 7.9%
HDPE Margin (cents/lb) 7.00 6.40 (8.6)% 7.00 6.70 (4.3)%
Polyethylene Volumes (MMLbs) 850 850 0.0% 850 850 0.0%
Refining & Marketing
SEBU
Throughput (MBD) 178 176 (1.1)% 178 176 (1.1)%
Gross Margin ($/Bbl) $3.90 $3.55 (9.0)% $3.94 $3.55 (9.9)%
SWBU
Throughput(MBD) 52 61 18.1% 59 61 3.4%
Gross Margin ($/Bbl) $4.36 $4.70 7.8% $4.49 $4.70 4.7%
Exploration and Production
Crude Oil Price ($/Bbl) $18.68 $17.90 (4.2)% $19.46 $18.60 (4.4)%
Natural Gas Price ($/Mcf) 2.28 2.35 3.1% 2.39 2.40 0.4%
Crude Oil Volume (MBD) 17.7 9.6 (45.8)% 19.4 14.3 (26.3)%
Natural Gas Volume (MMcf/D) 302.4 257.2 (14.9)% 331.8 291.1 (12.3)%
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Notes:
Original projections based on FINA, Inc. 1997 Corporate Plan finalized in
November/December 1996.
Revised projections based on 1997 Five Year Financial Plan updated in April
and November 1997
Financial data based on management projections.