Repsol

Debt

The Company’s net financial debt at the end of third quarter 2009 amounted to 10,575 M€, representing an increase of 170 M€ in comparison with the figure at the end of second quarter 2009 (10,405 M€) despite payment of the final Repsol YPF, S.A. dividend for 2008 totalling 641 M€.

The net debt/capital employed ratio at 30 September 2009 stood at 29.6%. Taking preference shares into account, the ratio is 39.5%.

The Group’s net financial debt ex GN at the end of third quarter 2009 was 4,062 M€ versus 3,657 M€ at the end of the second quarter, implying an increase of 405 M€ in this period. Operating cash flows in the quarter were sufficient to meet committed investments, tax payments, and, partially, the payment of the final Repsol YPF, S.A. dividend.

The net debt-to-capital employed ratio at the end of third quarter 2009 for the consolidated Group ex GN was 14.2%. Taking preference shares into account, the ratio is 26.6%.

Net financial expenses in the first nine months of 2009 totalled 278 M€ versus the 236 M€ net expense recorded in the same period a year earlier. The following aspects are worth mentioning:

Net interest expense: The 126 M€ increase in net interest expense is mainly explained by the increase in average debt due to Gas Natural’s acquisition of Unión FENOSA, coupled with the incorporation of Unión FENOSA’s debt since 30 April of this year. This impact was partially offset by lower interest rates in comparison with 2008.
Hedging positions: El Income in the first nine months of 2009 (288 M€) is attributable to:
- Interest rates: interest rate gains (44 M€) were due to the rise in the USD curve (medium term) and the drop in the EUR curve (all periods), mainly in the second quarter of the year.
- Exchange rates: the income generated during the year (244 M€) was achieved thanks to active
management of hedge positions in currency markets, attributable to the exposure vs. the USD and the
ARS. Its depreciation vs. the EUR reduced the value of liabilities denominated in these currencies.
Other financial expenses: the 65 M€ increase was mainly due to the incorporation in 2009 of finance
lease expenses for the transport of natural gas marketed in the United States and in Canada through
the gas pipeline.

Unaudited figures (IFRS)

BREAKDOWN OF NET DEBT (M€)	2Q09	3Q09	%Variation 3Q09/2Q09	Jan-Sep 09
NET DEBT AT THE START OF THE PERIOD	5,376	10,405	93.5	3,334
EBITDA	-1,545	-1,815	17.5	-4,803
VARIATION IN TRADE WORKING CAPITAL	490	-110		34
INVESTMENTS (1)	3,603	1,249	-65.3	7,775
DIVESTMENTS (1)	-153	-162	5.9	-584
DIVIDENDS (including affiliates)(2)	93	635	582.8	1,382
TRANSLATION DIFFERENCES	-198	-43	-78.3	-17
TAXES PAID	320	366	14.4	845
UNION FENOSA DEBT INCORPORATION	2,172	-19		2,153
OTHER MOVEMENTS	247	69	-72.1	456
NET DEBT AT THE CLOSE OF THE PERIOD	10,405	10,575	1.6	10,575
NET DEBT + PREFERRED SHARES AT THE CLOSE OF THE PERIOD	13,965	14,123	1.1	14,123
CAPITAL EMPLOYED (M€)	35,778	35,754	-0.1	35,754
Debt ratio
NET DEBT / TOTAL CAPITAL EMPLOYED(%)	29.1	29.6	1.7	29.6
NET DEBT + PREFERRED SHARES / CAPITAL EMPLOYED	39	39.5	1.3	39.5
ROACE before non-adjusted items (%)	5.2	5.9	13.5	6.1

(1) Additionally, in the January-September 2009 period, financial investments were made totalling 18 M€, which implies total investments of 7,793 M€. Financial divestments were also made totalling 55M€, which implies 639 M€ in total divestments.
(2) The difference between the Repsol YPF, S.A. final dividend for 2008 (641 M€) and the figure reflected in the table as the dividend payment (635 M€) is explained by the sum of the dividend for shares held in the parent company at the final dividend payment date.

Last updated: 25 November 2009