Repsol YPF

(1)      Included to facilitate analysis of the company’s operating performance and to optimise comparison of income generated in each period. Please see definition in the note on page 17. The effective corporate tax rate estimated for the period has been applied to adjustments included as non-recurring items.
(2)      EPS in dollars is calculated using end of period euro/dollar exchange rates. Other figures (such as net income or income from operations) expressed in dollars in the note, have been calculated using average exchange rates for the period. 2004 quarterly figures and those for the first three quarters of 2005 have been modified in accordance with the final adjustments to IFRS standards discussed with the auditor. Complete quarterly figures for 2004 and 2005 are included in the attached Annexes I and II.


FOURTH QUARTER 2005 HIGHLIGHTS

• Net income in the quarter was Eu549 million. Excluding non-recurring items, adjusted net income was Eu998 million, 19.4% higher year-on-year. These quarterly results continue to reflect high crude oil prices and refining margins, and a positive trend in international chemical margins.

• Income from operations in fourth quarter 2005 was Eu1,361 million. Several non-recurring expenses totalling Eu471 million diminished these results, to give a 36.8% growth in adjusted income from operations. These figures include accounting changes affecting all quarters of 2004 and 2005 for taxes paid in Libya, which increase operating income and corporate taxes by an equal amount. The impact on both captions in fourth quarter 2004 and 2005 was Eu78 million and Eu173 million respectively.

• Production in the quarter was 1,089,400 boepd, 5.1% less than the year before. Gas production dropped 3.8% year-on-year, mainly in Argentina. On the upside, both Bolivia and Venezuela increased gas production while oil production rose in Libya.

• Refining margins were flat quarter-on-quarter and considerably higher than in fourth quarter 2004.

• Repsol YPF on 26 January 2006 announced that, in establishing the amount of proved oil and gas reserves worldwide (as defined by the U.S. Securities and Exchange Commission) to be booked at 31 December 2005, the company has estimated a downward revision of 1,254 million barrels of oil equivalent (boe) with respect to previous evaluations, mainly relating to the reserves at fields in Bolivia, Argentina, and Venezuela

• The corporate tax rate in 2005 was 42.9%. It is the first time the tax rate calculation includes taxes accrued in Libya. Excluding Libyan taxes and non recurring items, the tax rate would have been 33.8%.