UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 20-F
(Mark One)
☐
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☑
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2020
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report
Commission file number: 1-10888
TOTAL SE
(Exact Name of Registrant as Specified in Its Charter)
N/A
(Translation of Registrant's name into English)
Republic of France
(Jurisdiction of Incorporation or Organization)
2, place Jean Millier
La Défense 6
92400 Courbevoie
France
(Address of Principal Executive Offices)
Jean-Pierre Sbraire
Chief Financial Officer
Tel: +33 (0)1 47 44 45 46
Fax: +33 (0)1 47 44 49 44
(Name, Telephone, Email and/or Facsimile Number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act.
Title of each class
Trading symbol(s)
Name of each exchange on which registered
Shares
New York Stock Exchange*
American Depositary Shares
TOT
New York Stock Exchange
*
Not for trading, but only in connection with the registration of American Depositary Shares, pursuant to the requirements of the Securities and Exchange Commission.
Securities registered or to be registered pursuant to Section 12(g) of the Act.
None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.
2,653,124,025 Shares, par value €2.50 each, as of December 31, 2020
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☑ No ☐
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ☐ No ☑
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or an emerging growth company. See definition of “large accelerated filer”, “accelerated filer”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☑
Accelerated filer ☐
Non-accelerated filer ☐
Emerging growth company ☐
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards*** provided pursuant to Section 13(a) of the Exchange Act.
*** The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP ☐
International Financial Reporting Standards as issued by the InternationalAccounting Standards Board ☑
Other ☐
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. Item 17 ☐ Item 18 ☐
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
TABLE OF CONTENTS
BASIS OF PRESENTATION
i
STATEMENTS REGARDING COMPETITIVE POSITION
ADDITIONAL INFORMATION
CERTAIN TERMS, ABBREVIATIONS AND CONVERSION TABLE
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
ii
ITEM 1.
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
1
ITEM 2.
OFFER STATISTICS AND EXPECTED TIMETABLE
ITEM 3.
KEY INFORMATION
ITEM 4.
INFORMATION ON THE COMPANY
2
ITEM 4A.
UNRESOLVED STAFF COMMENTS
ITEM 5.
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
ITEM 6.
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
18
ITEM 7.
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
ITEM 8.
FINANCIAL INFORMATION
ITEM 9.
THE OFFER AND LISTING
19
ITEM 10.
ITEM 11.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
24
ITEM 12.
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
ITEM 13.
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
25
ITEM 14.
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
ITEM 15.
CONTROLS AND PROCEDURES
ITEM 16A.
AUDIT COMMITTEE FINANCIAL EXPERT
26
ITEM 16B.
CODE OF ETHICS
ITEM 16C.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
ITEM 16D.
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
ITEM 16E.
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
27
ITEM 16F.
CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT
ITEM 16G.
CORPORATE GOVERNANCE
ITEM 16H.
MINE SAFETY DISCLOSURE
30
ITEM 17.
FINANCIAL STATEMENTS
ITEM 18.
ITEM 19.
EXHIBITS
31
References in this annual report on Form 20-F (this “Annual Report”) to pages and sections of the “Universal Registration Document 2020” are references only to those pages and sections of TOTAL’s Universal Registration Document for the year ended December 31, 2020 attached in Exhibit 15.1 to this Form 20-F and forming a part hereof. Other than as expressly provided herein, the Universal Registration Document 2020 is not incorporated herein by reference.
TOTAL’s Consolidated Financial Statements on pages F-9 to F-13 are prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and IFRS as adopted by the European Union (EU) as of December 31, 2020.
In addition, this Annual Report and the Universal Registration Document 2020 contain certain measures that are not defined by generally accepted accounting principles (GAAP) such as IFRS. Our management uses these financial measures, along with the most directly comparable GAAP financial measures, in evaluating our operating performance. We believe that presentation of this information, along with comparable GAAP measures, is useful to investors because it allows investors to understand the primary method used by management to evaluate performance on a meaningful basis. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP. Non-GAAP financial measures as reported by us may not be comparable with similarly titled amounts reported by other companies.
Unless otherwise indicated, statements made in “Item 4. Information on the company” referring to TOTAL’s competitive position are based on the Company’s estimates, and in some cases rely on a range of sources, including investment analysts’ reports, independent market studies and TOTAL’s internal assessments of market share based on publicly available information about the financial results and performance of market participants.
This Annual Report reports information primarily regarding TOTAL’s business, operations and financial information relating to the fiscal year ended December 31, 2020. For more recent updates regarding TOTAL, you may inspect any reports, statements or other information TOTAL files with the United States Securities and Exchange Commission (“SEC”). All of TOTAL’s SEC filings made after December 31, 2001 are available to the public at the SEC website at http://www.sec.gov and from certain commercial document retrieval services. See also “Item 10. - 10.8 Documents on display”.
No material on the TOTAL website forms any part of this Annual Report. References in this Annual Report to documents on the TOTAL website are included as an aid to the location of such documents and such documents are not incorporated by reference. References to websites contained in this Annual Report (including all exhibits hereto) are provided for reference only; the information contained on the referenced websites is not incorporated by reference in this Annual Report.
For the meanings of certain terms used in this document, as well as certain abbreviations and a conversion table, refer to the “Glossary” starting on page 519 of the Universal Registration Document 2020, which is incorporated herein by reference. The terms “TOTAL” and “Group” as used in this document refer to TOTAL SE collectively with all of its direct and indirect consolidated companies located in or outside of France. The term “Company” as used in this document exclusively refers to TOTAL SE, which is the parent company of the Group.
Form 20-F 2020 TOTAL
TOTAL has made certain forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995) in this document and in the documents referred to in, or incorporated by reference into, this Annual Report. This document may contain forward-looking statements, notably with respect to the financial condition, results of operations, business activities and industrial strategy of TOTAL. This document may also contain statements regarding the perspectives, objectives, areas of improvements and goals of the Group, including with respect to climate change and carbon neutrality (net zero emissions). An ambition expresses an outcome desired by the Group, it being specified that the means to be deployed do not depend solely on TOTAL. These forward-looking statements may generally be identified by the use of the future or conditional tense or forward-looking words such as “envisions”, “intends”, “anticipates”, “believes”, “considers”, “plans”, “expects”, “thinks”, “targets”, “aims” or similar terminology. Such forward-looking statements included in this document are based on economic data, estimates and assumptions prepared in a given economic, competitive and regulatory environment and considered to be reasonable by the Group as of the date of this document.
These forward-looking statements are not historical data and should not be interpreted as assurances that the perspectives, objectives or goals announced will be achieved. They may prove to be inaccurate in the future, and may evolve or be modified with a significant difference between the actual results and those initially estimated, due to the uncertainties notably related to the economic, financial, competitive and regulatory environment, or due to the occurrence of risk factors, such as, notably, the price fluctuations in crude oil and natural gas, the evolution of the demand and price of petroleum products, the changes in production results and reserves estimates, the ability to achieve cost reductions and operating efficiencies without unduly disrupting business operations, changes in laws and regulations including those related to the environment and climate, currency fluctuations, as well as economic and political developments, changes in market conditions, loss of market share and changes in consumer preferences, or pandemics such as the COVID-19 pandemic. Additionally, certain financial information is based on estimates particularly in the assessment of the recoverable value of assets and potential impairments of assets relating thereto.
Except for its ongoing obligations to disclose material information as required by applicable securities laws, TOTAL does not have any intention or obligation to update forward-looking statements after the distribution of this document, even if new information, future events or other circumstances have made them incorrect or misleading.
For additional factors, please refer to “Item 3. - 3.2 Risk factors”, “Item 5. Operating and financial review and prospects” and “Item 11. Quantitative and qualitative disclosures about market risk”.
TOTAL Form 20-F 2020
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not applicable.
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
ITEM 3. KEY INFORMATION
3.1 Selected financial data
The following table presents selected consolidated financial data for TOTAL on the basis of IFRS as issued by the IASB and IFRS as adopted by the EU for the years ended December 31, 2020, 2019, 2018, 2017 and 2016. Effective January 1, 2014, TOTAL changed the presentation currency of the Group’s Consolidated Financial Statements from the Euro to the U.S. Dollar. ERNST & YOUNG Audit and KPMG Audit, a division of KPMG S.A., independent registered public accounting firms and the Company’s auditors, audited the historical Consolidated Financial Statements of TOTAL for these periods from which the financial data presented below for such periods are derived. All such data should be read in conjunction with the Consolidated Financial Statements and the Notes thereto starting on page F-9.
(in millions of dollars, except share and per share data)
2020
2019
2018
2017
2016
INCOME STATEMENT DATA
Revenues from sales
119,704
176,249
184,106
149,099
127,925
Net income, Group share
(7,242)
11,267
11,446
8,631
6,196
Earnings per share ($)
($2.90)
$4.20
$4.27
$3.36
$2.52
Fully diluted earnings per share ($)
$4.17
$4.24
$3.34
$2.51
CASH FLOW STATEMENT DATA
Cash flow from operating activities
14,803
24,685
24,703
22,319
16,521
Total expenditures
15,534
19,237
22,185
16,896
20,530
BALANCE SHEET DATA
Total assets
266,132
273,294
256,762
242,631
230,978
Non-current financial debt
60,203
47,773
40,129
41,340
43,067
Non-controlling interests
2,383
2,527
2,474
2,481
2,894
Shareholders’ equity - Group share
103,702
116,778
115,640
111,556
98,680
· Common shares
8,267
8,123
8,227
7,882
7,604
DIVIDENDS
Dividend per share (€)
€2.64(a)
€2.68
€2.56
€2.48
€2.45
Dividend per share ($)
$3.13(a)(b)
$2.95
$2.94
$2.96
$2.61
COMMON SHARES(c)
Average number outstanding of common shares €2.50 par value (shares undiluted)
2,602,026,749
2,601,621,815
2,607,456,934
2,481,802,636
2,379,182,155
Average number outstanding of common shares €2.50 par value (shares diluted)(d)
2,618,007,888
2,623,716,444
2,494,756,413
2,389,713,936
3.2 Risk factors
The Group conducts its activities in an ever-changing environment. It is exposed to risks that, if they were to occur, could have a material adverse effect on its business, financial condition, reputation, outlook, or the price of financial instruments issued by TOTAL. Point 3.1 of chapter 3 of the Universal Registration Document 2020 (starting on page 90), which is incorporated herein by reference, presents the significant risk factors specific to the Group, to which it believes it is exposed as of the filing date of this Annual Report. However, the Group may be exposed to other non-specific risks, or of which it may not be aware, or which it may be underestimating the potential consequences of, or other risks that may not have been considered by the Group as being likely to have a material adverse impact on the Group, its business, financial condition, reputation or outlook.
For additional information on the risks to which TOTAL believes it is exposed as of the filing date of this Annual Report, along with TOTAL’s approaches to managing certain of these risks, please refer to “Item 5. Operating and financial review and prospects” and “Item 11. Quantitative and qualitative disclosures about market risk”, as well as points 3.3 and 3.6 of chapter 3 (starting on pages 101 and 109, respectively) of the Universal Registration Document 2020, which are incorporated herein by reference.
ITEM 4. INFORMATION ON THE COMPANY
The following information providing an integrated overview of the Group from the Universal Registration Document 2020 is incorporated herein by reference:
The following information providing an overview of the Group’s businesses and activities from the Universal Registration Document 2020 is incorporated herein by reference:
The following other information from the Universal Registration Document 2020 is incorporated herein by reference:
ITEM 4A. UNRESOLVED STAFF COMMENTS
None.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
This section is the Company’s analysis of its financial performance and of significant trends that may affect its future performance. It should be read in conjunction with the Consolidated Financial Statements and the Notes thereto starting on page F-9 attached hereto. The Consolidated Financial Statements and the Notes thereto are prepared in accordance with IFRS as issued by the IASB and IFRS as adopted by the EU.
This section contains forward-looking statements that are subject to risks and uncertainties. For a list of important factors that could cause actual results to differ materially from those expressed in the forward-looking statements, see “Cautionary Statement Concerning Forward-Looking Statements” starting on page ii.
Critical accounting policies and standards applicable in the future
For an overview of TOTAL’s critical accounting policies, including policies involving management’s judgment and estimates and significant accounting policies applicable in the future, refer to the Introduction and Note 1.2 (“Significant accounting policies applicable in the future”) of the Notes to the Consolidated Financial Statements (starting on pages F-15 and F-17, respectively).
5.1 Overview
TOTAL’s results are affected by a variety of factors, including changes in crude oil and natural gas prices as well as refining and marketing margins, which are all generally expressed in dollars, and changes in exchange rates, particularly the value of the euro compared to the dollar. Higher crude oil and natural gas prices generally have a positive effect on the income of TOTAL, since the Exploration & Production segment’s oil and gas business and Integrated Gas, Renewables & Power segment’s downstream gas business are positively impacted by the resulting increase in revenues. Lower crude oil and natural gas prices generally have a corresponding negative effect. The effect of changes in crude oil prices on the activities of TOTAL’s Refining & Chemicals and Marketing & Services segments depends upon the speed at which the prices of refined petroleum products adjust to reflect such changes. TOTAL’s results are also significantly affected by the costs of its activities, in particular those related to exploration and production, and by the outcome of its strategic decisions with respect to cost reduction efforts. In addition, TOTAL’s results are affected by general economic and political conditions and changes in governmental laws and regulations, as well as by the impact of decisions by OPEC on production levels. For more information, refer to “Item 3. - 3.2 Risk factors”.
TOTAL faced two major crises in 2020: the COVID-19 pandemic that severely affected global energy demand, and the oil crisis that drove the Brent price below $20 per barrel in the second quarter. In this particularly difficult context, the Group implemented an immediate action plan and proved its resilience thanks to the quality of its portfolio (production cost of $5.1 per boe, the lowest among its peers) and its integrated model with cash flow (DACF)(1) generation of nearly $18 billion. It posted an adjusted net income(2) of $4.1 billion and, thanks to strong discipline on investments ($13 billion, down 26%) and costs ($1.1 billion in savings), the organic cash breakeven(3) was $26 per barrel. Consistent with its climate ambition, the Group recorded exceptional asset impairments, notably on Canadian oil sands assets, most of which were recorded in its accounts at the end of June, leading to an IFRS loss for the year of $7.2 billion.
2020 represents a pivotal year for the Group’s strategy with the announcement of its ambition to get to net zero emissions (Net Zero), together with society. The Group affirms its plan to transform itself into a broad energy company to meet the dual challenge of the energy transition: more energy, less emissions. Thus, the Group’s profile will be transformed over the 2020-30 decade: the growth of energy production will be based on two pillars, LNG and Renewables & Electricity, while oil products are expected to fall from 55% to 30% of sales. To anchor this transformation, the Group will propose to its shareholders at the Annual General Meeting to be held on May 28, 2021, changing its name to TotalEnergies. They will thus have the opportunity to endorse this strategy and the underlying ambition to transition to carbon neutrality.
In 2020, TOTAL secured its investments in Renewables & Electricity ($2 billion) and accelerated the implementation of its strategy to grow renewables, adding 10 GW to its portfolio. With the acquisition at the start of 2021 of a 20% stake in Adani Green Energy Limited (AGEL), one of the largest solar developers in the world, and of portfolios of projects in the United States, the Group now has a portfolio of gross installed capacity, under construction and in development of 35 GW by 2025, with more than 20 GW already benefiting from long-term power purchase agreements.
TOTAL preserves its financial strength with a gearing(4) of 21.7% at the end of 2020. Confident in the Group’s fundamentals, the Board of Directors of TOTAL SE confirms its policy of supporting the dividend through economic cycles. Therefore, it will propose at the Annual General Meeting of Shareholders to be held on May 28, 2021, the distribution of a final dividend of €0.66 per share, equal to the previous three quarters, and set the dividend for 2020 at €2.64 per share.
Outlook
Supported by OPEC+ quota compliance, oil prices have remained above 50$/b since the beginning of 2021. However, the oil environment remains uncertain and dependent on the recovery of global demand, still affected by the COVID-19 pandemic.
In a context of disciplined OPEC+ quota implementation, the Group anticipates 2021 production will be stable compared to 2020, benefiting from the resumption of production in Libya.
European refining margins remain fragile, with low demand for jet fuel weighing on the recovery of distillates.
Faced with uncertainties in the environment, net investments(5) are projected at $12 billion in 2021, while preserving the flexibility to mobilize additional investments should the oil and gas environment strengthen. After reducing operating costs by $1.1 billion in 2020 compared to 2019, the Group maintains strong discipline on spending and targets additional savings of $0.5 billion in 2021.
The Group’s teams are fully committed to the four priorities of HSE (Health, Safety and the Environment), operational excellence, cost reduction and cash flow generation.
The Group maintains its priorities for cash flow allocation: investing in profitable projects to implement the Group’s transformation strategy, support the dividend and maintain a strong balance sheet.
Already in 2021, in renewables, the Group has announced more than 10 GW of additional projects through the acquisition of a 20% stake in Adani Green Energy Limited (AGEL), one of the world’s leading solar developers, a partnership with Hanwha Group in the United States with a 1.6 GW portfolio, and the acquisition of a 2.2 GW portfolio of projects in Texas. TOTAL intends to allocate more than 20% of its net investments to Renewables and Electricity in 2021.
3
5.2 Group results 2018-2020
As of and for the year ended December 31 (in millions of dollars, except per share data)
Non-Group sales
140,685
200,316
209,363
Adjusted net operating income from business segments(a)
6,404
14,554
15,997
· Integrated Gas, Renewables & Power(b)
1,778
2,389
2,419
· Exploration & Production(b)
2,363
7,509
8,547
· Refining & Chemicals
1,039
3,003
3,379
· Marketing & Services
1,224
1,653
1,652
Net income (loss) from equity affiliates
452
3,406
3,170
Fully-diluted earnings per share ($)
(2.90)
4.17
4.24
Fully-diluted weighted-average shares (millions)(c)
2,602
2,618
2,624
Net income (Group share)
Organic investments(d)
10,339
13,397
12,427
Net acquisitions(e)
2,650
4,052
3,141
Net investments(f)
12,989
17,449
15,568
Of which:
· (increase)/decrease in working capital
1,869
(1,718)
769
· financial charges
(1,938)
(2,069)
(1,538)
2020 and 2019 data take into account the impact of the IFRS 16 “Leases” rule, effective January 1, 2019.
Market environment parameters
Brent ($/b)
41.8
64.2
71.3
Henry Hub ($/Mbtu)
2.1
2.5
3.1
NBP ($/Mbtu)(a)
3.3
4.9
7.9
JKM ($/Mbtu)(b)
4.4
5.5
9.7
Average price of liquids ($/b)
Consolidated subsidiaries
37.0
59.8
64.3
Average price of gas ($/Mbtu)
2.96
3.88
4.87
Average price of LNG ($/Mbtu)
Consolidated subsidiaries and equity affiliates
4.83
6.31
–
Variable cost margin – Refining Europe, VCM(c) ($/t)
11.5
34.9
38.2
Hydrocarbon production
Combined production (kboe/d)
2,871
3,014
2,775
● Oil (including bitumen) (kb/d)
1,298
1,431
1,378
● Gas (including condensates and associated NGL) (kboe/d)
1,573
1,583
1,397
● Liquids (kb/d)*
1,543
1,672
1,566
● Gas (Mcf/d)**
7,246
7,309
6,599
*Including condensate and NGLs, associated to the gas production.
**2019 data restated.
4
For a discussion of the Group’s proved reserves, refer to point 2.3.1 of chapter 2 of the Universal Registration Document 2020 (starting on page 65), which is incorporated herein by reference. See also point 9.1 of chapter 9 of the Universal Registration Document 2020 (starting on page 426), which is incorporated herein by reference, for additional information on proved reserves, including tables showing changes in proved reserves by region.
2020 vs. 2019
In 2020, market conditions were less favorable than in 2019 due to the COVID-19 pandemic and the oil crisis. The Brent price decreased to $41.8/b on average in 2020 from $64.2/b on average in 2019, while remaining volatile throughout 2020. TOTAL’s average liquids price realization(6) decreased by 38% to $37.0/b in 2020 from $59.8/b in 2019. TOTAL’s average gas price realization(6) decreased by 24% to $2.96/Mbtu in 2020 from $3.88/Mbtu in 2019. TOTAL’s average LNG price realization(7) decreased by 24% to $4.83/Mbtu in 2020 from $6.31/Mbtu in 2019. The Group’s variable cost margin – Refining Europe (“VCM”) decreased by 67% to $11.5/t on average in 2020 compared to $34.9/t in 2019, mainly due to decreasing crude oil prices.
For the full-year 2020, hydrocarbon production was 2,871 kboe/d, a decrease of 5% compared to 3,014 kboe/d in 2019, comprised of:
The euro-dollar exchange rate averaged $1.1422/€ in 2020, compared to $1.1195/€ in 2019.
Non-Group sales were $140,685 million in 2020 compared to $200,316 million in 2019, a decrease of 30% reflecting the decreased hydrocarbon prices and the decrease in global energy demand due to the COVID-19 pandemic. In 2020, Non-Group sales decreased by 32% for the Exploration & Production segment, 14% for the Integrated Gas, Renewables & Power segment, 35% for Refining & Chemicals segment and 27% for the Marketing & Services segment.
Net income (Group share) decreased to $(7,242) million in 2020 compared to $11,267 million in 2019, due to exceptional asset impairments, notably on Canadian oil sands assets. In 2020, total adjustments to net income (Group share), which include the after-tax inventory effect, special items and the impact of changes in fair value, had a negative impact of $11,301 million, including $8.5 billion of impairments, related mainly to oil sands assets in Canada. For a detailed overview of adjustment items for 2020, refer to Note 3 to the Consolidated Financial Statements (starting on page F-19). In 2019, adjustments to net income (Group share), which include the after-tax inventory effect, special items and the impact of changes in fair value, had a negative impact of $561 million mainly due to impairments of assets mainly located in the United States (Utica, Chinook).
Total income taxes in 2020 amounted to $(318) million, a decrease of 95% compared to $(5,872) million in 2019, due to the relative weight and lower tax rates in the Upstream segment and a lower hydrocarbon price environment.
In 2020, TOTAL SE bought back 13,236,044 TOTAL SE shares on the market, i.e., 0.50% of the share capital as of December 31, 2020. In 2019, the Company bought back 52,389,336 TOTAL shares on the market, i.e., 2.01% of the Company’s outstanding share capital as of December 31, 2019. See also “- 5.4.4 Shareholders’ equity”, below.
Fully-diluted earnings per share was $(2.90) in 2020 compared to $4.17 in 2019.
Finalized asset sales amounted to $1.5 billion in 2020, comprised notably of the sale of Enphase shares by SunPower(8), the sale of the Group's corporate offices in Brussels, the sale of non-strategic assets in the UK North Sea, the completion of the sale of Block CA1 in Brunei, the sale of the Group’s interest in the Fos Cavaou regasification terminal in France, and the sale of 50% of a portfolio of solar and wind assets from Total Quadran in France. Finalized asset sales amounted to $1,939 million for the full-year 2019, comprised notably of the payment received upon the take-over of the Toshiba LNG portfolio in the United States, the sale of the interest in the Wepec refinery in China and the sale of the Group’s interest in the Hazira terminal in India and polystyrene activities in China.
Finalized acquisitions(9) amounted to $4.2 billion for the full-year 2020, comprised notably of the acquisition of Tullow’s entire interest in the Lake Albert project in Uganda, the acquisition of CCGT assets and of a portfolio of customers from Energías de Portugal in Spain, the acquisition in India of 50% of a portfolio of installed solar activities from Adani Green Energy Limited, the finalization of the acquisition of 37.4% stake in Adani Gas Ltd, the acquisition of interests in Blocks 20 and 21 in Angola and the payment for a second bonus tranche linked to taking the 10% stake in the Arctic LNG 2 project in Russia. Finalized acquisitions amounted to $5,991 million for the full-year 2019, comprised mainly of the acquisition of Anadarko’s interest in Mozambique LNG, the acquisition of a 10% stake in the Arctic LNG 2 project in Russia and the acquisition of Chevron’s interest in the Danish Underground Consortium in Denmark.
5
The Group’s cash flow from operating activities for the full-year 2020 was $14,803 million, a decrease of 40% compared to $24,685 million for the full-year 2019. The change in working capital as determined using the replacement cost method(10) excluding the mark-to-market effect of iGRP’s contracts and including capital gain from renewable project sale (effective first quarter 2020) and organic loan repayment from equity affiliates was $(894) million for the full-year 2020, compared to $(1,426) million for the full-year 2019. It is the (increase) decrease in working capital of $1,869 million as determined in accordance with IFRS adjusted for (i) the pre-tax inventory valuation effect of $(1,440) million, (ii) the mark-to-market effect of iGRP’s contracts of $(1,116) million, (iii) the capital gains from renewables project sale of $(96) million and (iv) the organic loan repayments from equity affiliates of $(111) million. For the full-year 2020, operating cash flow before working capital changes and without financial charges (DACF)(11) was $17,635 million, a decrease of 37% compared to $28,180 million for the full-year 2019. For the full-year 2020, operating cash flow before working capital changes(12) was $15,697 million, a decrease of 40% compared to $26,111 million for the full-year 2019.
The Group’s net cash flow(13) was $2,708 million in 2020 compared to $8,662 million in 2019, due to the decrease of $10,414 million in operating cash flow before working capital changes, partially offset by a reduction in net investments of $4,460 million.
See also “- 5.4 Liquidity and Capital Resources”, below.
2019 vs. 2018
In 2019, market conditions were less favorable than in 2018. The Brent price decreased to $64.2/b on average in 2019 from $71.3/b on average in 2018, while remaining volatile. In 2019, TOTAL’s average liquids price realization(14) decreased by 7% to $59.8/b in 2019 from $64.3/b in 2018. TOTAL’s average gas price realization(14) decreased by 20% to $3.88/Mbtu in 2019 from $4.87/Mbtu in 2018. The Group’s European refining VCM decreased by 9% to $34.9/t on average in 2019 compared to $38.2/t in 2018, mainly due to decreasing crude oil prices.
For the full-year 2019, hydrocarbon production was 3,014 kboe/d, an increase of 9% compared to 2,775 kboe/d in 2018, due to:
The euro-dollar exchange rate averaged $1.1195/€ in 2019, compared to $1.1810/€ in 2018.
Non-Group sales were $200,316 million in 2019 compared to $209,363 million in 2018, a decrease of 4% reflecting the decreased hydrocarbon prices, partially offset by the increase of the Group’s production in 2019. In 2019, Non-Group sales decreased by 27% for the Exploration & Production segment, 5% for the Refining & Chemicals segment and 3% for the Marketing & Services segment. The Integrated Gas, Renewables & Power segment’s Non-Group sales increased by 5% in 2019.
Net income (Group share) decreased by 2% to $11,267 million in 2019 compared to $11,446 million in 2018, mainly due to lower hydrocarbon prices, partially offset by growth of the Group’s hydrocarbon production. In 2019, adjustments to net income (Group share), which include the after-tax inventory valuation effect, special items and the impact of changes in fair value, had a negative impact of $561 million mainly due to impairments on assets mainly located in the United States (Utica, Chinook). For a detailed overview of adjustment items for 2019, refer to Note 3 to the Consolidated Financial Statements (starting on page F - 16). In 2018, adjustments to net income (Group share), which include the after-tax inventory valuation effect, special items and the impact of changes in fair value, had a negative impact of $2,113 million, mainly due to an inventory effect and an impairment on Ichthys related to the sale of a partial interest by the Group, as well as the impairment of production facilities by SunPower(15).
Income taxes in 2019 amounted to $(5,872) million, a decrease of 9.9% compared to $(6,516) million in 2018, due to the relative weight and lower tax rates in the Upstream segment and a lower hydrocarbon price environment.
In 2019, the Company bought back 52,389,336 TOTAL shares on the market, i.e., 2.01% of the Company’s outstanding share capital as of December 31, 2019. See also “- 5.4.4 Shareholders’ equity”, below. In 2018, the Company bought back 72,766,481 TOTAL shares on the market, i.e., 2.76% of the Company’s outstanding share capital as of December 31, 2018.
Fully-diluted earnings per share was $4.17 in 2019 compared to $4.24 in 2018, a decrease of 2%.
Finalized asset sales amounted to $1,939 million for the full-year 2019, comprised notably of the payment received upon the take-over of the Toshiba LNG portfolio in the United States, the sale of the interest in the Wepec refinery in China, the sale of the Group’s interest in the Hazira terminal in India and polystyrene activities in China. Asset sales completed were $5,172 million for the full-year 2018, comprised of the sale of a 4% interest in the Ichthys project in Australia and the sale of the Group’s share of the LNG re-gas terminal at Dunkirk, as well as the sale of Joslyn in Canada, Rabi in Gabon, the Martin Linge and Visund fields in Norway, an interest in Fort Hills in Canada, SunPower’s sale of its interest in 8point3, the marketing activities of TotalErg in Italy, the Marketing & Services network in Haiti, and the contribution of the Bayport polyethylene unit in the United States to the joint venture formed with Borealis (and Nova prior to 2020) in which TOTAL holds 50%.
6
Finalized acquisitions(16) amounted to $5,991 million for the full-year 2019, comprised mainly of the acquisition of Anadarko’s interest in Mozambique LNG, the acquisition of a 10%-stake in the Arctic LNG 2 project in Russia and the acquisition of Chevron’s interest in the Danish Underground Consortium in Denmark. Finalized acquisitions amounted to $8,314 million for the full-year 2018, including $4,493 million in resource acquisitions(17), comprised of the extension of licenses in Nigeria and the acquisition of a network of service stations in Brazil, as well as notably the acquisitions of Direct Énergie, Engie’s LNG business, the increase in the share of Novatek to 19.4%, interests in the Iara and Lapa fields in Brazil, two new 40-year offshore concessions in Abu Dhabi, which follow the previous Abu Dhabi Marine Areas Ltd (ADMA) offshore concession, and the acquisition of offshore assets from Cobalt in the Gulf of Mexico.
The Group’s cash flow from operating activities for the full-year 2019 was $24,685 million, stable compared to $24,703 million for the full-year 2018. The change in working capital as determined using the replacement cost method(18) excluding the mark-to-market effect of iGRP’s contracts and including capital gain from renewable project sale and organic loan repayment from equity affiliates was $(1,426) million for the full-year 2019, compared to $410 million for the full-year 2018. It is the (increase) decrease in working capital of $(1,718) million as determined in accordance with IFRS adjusted for (i) the pre-tax inventory valuation effect of $446 million, (ii) the mark-to-market effect of iGRP’s contracts of $321 million, (iii) the capital gains from renewables project sale of $0 million and (iv) the organic loan repayments from equity affiliates of $(475) million. Operating cash flow before working capital changes without financial charges (DACF)(19) for the full-year 2019 was $28,180 million, an increase of 9% compared to $25,831 million for the full-year 2018. Operating cash flow before working capital changes(20) for the full-year 2019 was $26,111 million, an increase of 7.5% compared to $24,293 million for the full-year 2018.
The Group’s net cash flow(21) remained stable in 2019 at $8,662 million for the full-year 2019, compared to $8,725 million for the full-year 2018. The start-up of strong cash flow generating projects such as Yamal LNG in Russia, Ichthys in Australia, Kaombo in Angola and Egina in Nigeria offset the impact of lower Brent and gas prices.
5.3 Business segment reporting
The financial information for each business segment is reported on the same basis as that used internally by the chief operating decision-maker in assessing segment performance and the allocation of segment resources. Due to their particular nature or significance, certain transactions qualifying as “special items” are excluded from the business segment figures. In general, special items relate to transactions that are significant, infrequent or unusual. However, in certain instances, certain transactions such as restructuring costs or asset disposals, which are not considered to be representative of the normal course of business, may qualify as special items although they may have occurred in prior years or are likely to recur in following years.
In accordance with IAS 2, the Group values inventories of petroleum products in its financial statements according to the First-In, First-Out (FIFO) method and other inventories using the weighted-average cost method. Under the FIFO method, the cost of inventory is based on the historic cost of acquisition or manufacture rather than the current replacement cost. In volatile energy markets, this can have a significant distorting effect on the reported income. Accordingly, the adjusted results of the Refining & Chemicals and Marketing & Services segments are presented according to the replacement cost method in order to facilitate the comparability of the Group’s results with those of its competitors and to help illustrate the operating performance of these segments excluding the impact of oil price changes on the replacement of inventories. In the replacement cost method, which approximates the Last-In, First-Out (LIFO) method, the variation of inventory values in the statement of income is, depending on the nature of the inventory, determined using either the month-end price differential between one period and another or the average prices of the period rather than the historical value. The inventory valuation effect is the difference between the results under the FIFO and replacement cost methods.
The effect of changes in fair value presented as an adjustment item reflects, for trading inventories and storage contracts, differences between internal measures of performance used by TOTAL’s executive committee and the accounting for these transactions under IFRS, which requires that trading inventories be recorded at their fair value using period-end spot prices. In order to best reflect the management of economic exposure through derivative transactions, internal indicators used to measure performance include valuations of trading inventories recorded at their fair value based on forward prices. TOTAL, in its trading activities, enters into storage contracts, the future effects of which are recorded at fair value in the Group’s internal economic performance. Furthermore, TOTAL enters into derivative instruments to risk manage certain operational contracts or assets. Under IFRS, these derivatives are recorded at fair value while the underlying operational transactions are recorded as they occur. Internal indicators defer the fair value on derivatives to match with the transaction occurrence. IFRS, by requiring accounting for storage contracts on an accrual basis, precludes recognition of this fair value effect.
The adjusted business segment results (adjusted operating income and adjusted net operating income) are defined as replacement cost results, adjusted for special items, and the effect of changes in fair value. For further information on the adjustments affecting operating income on a segment-by-segment basis, and for a reconciliation of segment figures to figures reported in the Company’s audited Consolidated Financial Statements, see Note 3 to the Consolidated Financial Statements (starting on page F-19).
7
The Group measures performance at the segment level on the basis of adjusted net operating income. Net operating income comprises operating income of the relevant segment after deducting the amortization and the depreciation of intangible assets other than leasehold rights, translation adjustments and gains or losses on the sale of assets, as well as all other income and expenses related to capital employed (dividends from non-consolidated companies, income from equity affiliates and capitalized interest expenses) and after income taxes applicable to the above. The income and expenses not included in net operating income that are included in net income are interest expenses related to long-term liabilities net of interest earned on cash and cash equivalents, after applicable income taxes (net cost of net debt and non-controlling interests). Adjusted net operating income excludes the effect of the adjustments (special items and the inventory valuation effect) described above. For further discussion of the calculation of net operating income and the calculation of return on average capital employed (ROACE(22)), see Note 3 to the Consolidated Financial Statements (starting on page F-19).
The profitable growth in the gas and low carbon electricity integrated value chains is one of the key axes of TOTAL’s strategy. In order to give more visibility to these businesses, a new reporting structure for the business segments’ financial information was implemented effective January 1, 2019. The organization of the Group’s activities is structured around the following four segments: Exploration & Production (EP), Integrated Gas, Renewables & Power (iGRP - comprising TOTAL’s integrated gas (including LNG) and low carbon electricity businesses and the upstream and midstream LNG activity that was previously reported in the EP segment), Refining & Chemicals and Marketing & Services. Certain figures for the year 2018 were previously restated in order to reflect the new reporting structure for the business segments’ financial information.
5.3.1 Integrated Gas, Renewables & Power segment
Hydrocarbon production for LNG and LNG sales
Hydrocarbon production for LNG
iGRP (kboe/d)
530
560
381
· Liquids (kb/d)*
69
71
39
· Gas (Mcf/d)**
2,519
2,656
1,875
*Including condensates and NGLs, associated to the gas production.
Liquefied Natural Gas
Overall LNG sales (Mt)
38.3
34.3
21.8
· including sales from equity production*
17.6
16.3
11.1
· including sales by TOTAL from equity production and third-party purchases
31.1
27.9
17.1
*The Group’s equity production may be sold by TOTAL or by joint ventures.
Renewables & Electricity
Gross renewables installed capacity (GW)*
7.0
3.0
1.7
Gross renewables installed or in development capacity with PPA (GW)*
17.5
Net power production (TWh)**
14.1
11.4
6.4
· including power production from renewables
4.0
2.0
1.0
Clients power – BtB and BtC (Million)*
5.6
4.1
3.6
Clients gas – BtB and BtC (Million)*
2.7
1.5
Sales power – BtB and BtC (TWh)
47.3
46.0
31.0
Sales gas – BtB and BtC (TWh)
95.8
95.0
88.4
*Capacity at end of period.
**Solar, wind, biogas, hydroelectric and combined-cycle gas turbine (CCGT) plants.
Results (in millions of dollars except ROACE)
15,629
18,167
17,236
Operating income(a)
(527)
1,184
(72)
Net income (loss) from equity affiliates and other items
794
2,330
1,639
Tax on net operating income
(741)
(471)
Net operating income(a)
338
2,773
1,096
Adjustments affecting net operating income
1,440
(384)
1,323
Adjusted net operating income(b)
· including income from equity affiliates
375
1,009
1,249
Organic investments(c)
2,720
2,259
1,745
Net acquisitions(d)
2,183
3,921
1,701
Net investments(e)
4,903
6,180
3,445
ROACE
4.1%
6.3%
7.5%
8
Hydrocarbon production for LNG in 2020 decreased by 5% compared to a year ago, notably due to the shutdown of Snøhvit LNG following a fire at the end of September 2020. Total LNG sales increased by 12% in volume in 2020 compared to 2019 due to the start-up of three trains at Cameron LNG in the United States, the ramp-up of Yamal LNG in Russia and Ichthys LNG in Australia and the increase in trading activities.
The Group's gross installed renewable power generation capacity more than doubled during 2020 to reach 7 GW at the end of the fourth quarter 2020, notably thanks to the acquisition in India of 50% of a 3 GWp portfolio from the Adani Group.
The Group continues to implement its strategy to integrate along the electricity and gas chain in Europe and has increased the number of its electricity and gas customers by 1.5 million and 1 million since 2019, respectively, notably thanks to the finalization of the acquisition in the fourth quarter 2020 of a portfolio of customers from Energías de Portugal in Spain.
Non-Group sales for the Integrated Gas, Renewables & Power segment in 2019 were $15,629 million compared $18,167 million in 2019, a decrease of 14%.
The iGRP segment's adjusted net operating income was $1,778 million in 2020, a decrease of 26% compared to $2,389 million in 2019, mainly due to a decrease in the LNG price.
Adjusted net operating income for the iGRP segment excludes special items. In 2020, the exclusion of special items had a positive impact of $1,440 million on the iGRP segment's adjusted net operating income. Special items included impairments of LNG assets located in Australia. For further information on the recognition of impairment of assets for the iGRP segment, refer to Note 3.D to the Consolidated Financial Statements (starting on page F-25). In 2019, the exclusion of special items had a negative impact of $384 million on the iGRP segment's adjusted net operating income.
For the full-year 2020, the iGRP segment's operating cash flow before working capital changes without financial charges (DACF)(23) was $3,418 million, stable compared to $3,409 million for the full-year 2019. For the full-year 2020, the iGRP segment's cash flow from operating activities excluding financial charges, except those related to leases was $2,129 million, a decrease of 38% compared to $3,461 million for the full-year 2019.
For information on the segment's investments, refer to point 1.4 of chapter 1 of the Universal Registration Document 2020 (starting on page 18), which is incorporated herein by reference. See also "- 5.4 Liquidity and Capital Resources", below.
In this context, the iGRP segment's ROACE for the full-year 2020 was 4.1% compared to 6.3% for the full-year 2019.
Production growth in 2019 was essentially related to the start-up of Ichthys in Australia in the third quarter of 2018 and the successive start-ups of Yamal LNG trains in Russia and the start-up of the first Cameron LNG train in the United States in the second quarter of 2019.
In 2019, LNG sales increased by 57% compared to 2018 for the same reasons and the acquisition of the Engie portfolio of LNG contracts in the third quarter of 2018.
Non-Group sales for the Integrated Gas, Renewables & Power segment in 2019 were $18,167 million compared to $17,236 million in 2018, an increase of 5%.
The iGRP segment’s adjusted net operating income was $2,389 million in 2019, a decrease of 1% compared to $2,419 million in 2018, impacted by lower gas prices in Europe and Asia as well as higher depreciation, depletion and amortization expenses on new projects such as Ichthys in Australia and Yamal LNG in Russia.
Adjusted net operating income for the iGRP segment excludes special items. In 2019, the exclusion of special items had a negative impact of $384 million on the iGRP segment’s adjusted net operating income. In 2018, the exclusion of special items had a positive impact on the segment’s adjusted net operating income of $1,323 million. Special items in 2018 included impairments on Ichthys related to the sale of a partial interest by the Group and the impairment of production facilities by SunPower.
For the full-year 2019, the iGRP segment’s operating cash flow before working capital changes without financial charges (DACF)(23) was $3,409 million, an increase of 87% compared to $1,819 million for the full-year 2018 due to strong increases in production and LNG sales. For the full-year 2019, the iGRP segment’s cash flow from operating activities excluding financial charges, except those related to leases was $3,461 million, compared to $596 million for the full-year 2018 due to strong increases in production and LNG sales.
For information on the segment’s investments, refer to point 1.4 of chapter 1 of the Universal Registration Document 2020 (starting on page 18), which is incorporated herein by reference. See also “- 5.4 Liquidity and Capital Resources”, below.
In this context, the iGRP segment’s ROACE for the full-year 2019 was 6.3% compared to 7.5% for the full-year 2018.
9
5.3.2 Exploration & Production segment
EP (kboe/d)
2,341
2,454
2,394
1,474
1,601
1,527
· Gas (Mcf/d)
4,727
4,653
4,724
* Including condensates and NGLs, associated to the gas production.
Results (in millions of dollars except effective tax rate and ROACE)
4,973
7,261
9,889
(5,514)
10,542
12,502
697
610
1,365
Effective tax rate(b)
29.4%
41.5%
46.2%
(208)
(4,572)
(5,770)
(5,025)
6,580
8,097
7,388
929
450
Adjusted net operating income(c)
· of which income from equity affiliates
928
996
1,140
5,519
8,635
7,953
544
14
2,162
6,063
8,649
10,115
2.8%
8.4%
9.9%
Non-Group sales for the EP segment in 2020 were $4,973 million compared to $7,261 million in 2019, a decrease of 32%.
The EP segment’s adjusted net operating income was $2,363 million in 2020, a decrease of 69% compared to $7,509 million in 2019, due to the sharp drop in oil and gas prices and lower production. The effective tax rate decreased from 41.5% in 2019 to 29.4% in 2020, in line with this sharp drop.
Adjusted net operating income for the EP segment excludes special items. In 2020, the exclusion of special items had a positive impact of $7,388 million on the EP segment’s adjusted net operating income. Special items included impairments of the Group’s oil sands assets in Canada. For further information on the recognition of impairment of assets for the EP segment, refer to Note 3.D to the Consolidated Financial Statements (starting on page F-25). In 2019, the exclusion of special items had a positive impact of $929 million on the EP segment’s adjusted net operating income.
For the full-year 2020, the EP segment’s operating cash flow before working capital changes without financial charges (DACF)(24) was $9,684 million, a decrease of 46% compared to $18,030 million for the full-year 2019. For the full-year 2020, the segment’s cash flow from operating activities excluding financial charges, except those related to leases was $9,922 million, a decrease of 41% compared to $16,917 million for the full-year 2019.
For additional information on the EP segment’s capital expenditures, refer to point 1.4 (starting on page 18) of chapter 1 and point 2.3.2 (on page 66) of chapter 2 of the Universal Registration Document 2020, which are incorporated herein by reference. See also “- 5.4 Liquidity and Capital Resources”, below.
In this context, the EP segment’s ROACE for the full-year 2020 was 2.8% compared to 8.4% for the full-year 2019.
Non-Group sales for the EP segment in 2019 were $7,261 million compared to $9,889 million in 2018, a decrease of 27%.
The EP segment’s adjusted net operating income was $7,509 million in 2019, a decrease of 12% compared to $8,547 million in 2018, due to the decrease in hydrocarbon prices, despite strong production growth.
The effective tax rate decreased from 46.2% in 2018 to 41.5% in 2019, in line with the decrease in oil prices.
Adjusted net operating income for the EP segment excludes special items. In 2019, the exclusion of special items had a positive impact of $929 million on the EP segment’s adjusted net operating income. In 2018, the exclusion of special items had a positive impact on the EP segment’s adjusted net operating income of $450 million due to impairments of assets located mainly in Algeria, Colombia and Congo.
10
In 2019, the EP segment’s operating cash flow before working capital changes without financial charges (DACF)(24) was $18,030 million, an increase of 1% compared to $17,832 million for the full-year 2018. The start-up of strong cash flow generating projects offset the impact of lower Brent and gas prices. In 2019, the EP segment’s cash flow from operating activities excluding financial charges, except those related to leases was $16,917 million, a decrease of 9% compared to $18,537 million for the full-year 2018.
In this context, the EP segment’s ROACE for the full-year 2019 was 8.4% compared to 9.9% for the full-year 2018.
5.3.3 Downstream (Refining & Chemicals and Marketing & Services segments)
Results (in millions of dollars)
120,066
174,878
182,231
627
5,394
4,354
(356)
423
1,089
(456)
(1,068)
(977)
(185)
4,749
4,466
2,448
(93)
565
2,263
4,656
5,031
2,023
2,395
2,614
32
118
(722)
2,055
2,513
1,892
For the full-year 2020, the Downstream segment’s operating cash flow excluding the change in working capital at replacement cost and financial charges, except those related to leases, and including organic loan repayment from equity affiliates was $4,652 million, a decrease of 30% compared to $6,617 million for the full-year 2019. For the full-year 2020, the Downstream segment’s cash flow from operating activities excluding financial charges, except those related to leases was $4,539 million, a decrease of 30% compared to $6,441 million for the full-year 2019.
A. Refining & Chemicals segment
Refinery throughput and utilization rates(a)
Total refinery throughput (kb/d)
1,292
1,671
1,852
· France
244
456
· Rest of Europe
618
754
755
· Rest of World
430
462
487
Utilization rates based on crude only(b)
61%
80%
88%
11
56,615
87,598
92,025
(814)
3,342
(393)
322
782
59
(470)
(445)
(1,148)
3,194
2,850
2,187
(191)
529
1,209
1,426
1,604
(54)
(44)
(742)
1,155
1,382
862
8.8%
26.3%
31%
Refinery throughput volumes decreased by 23% in 2020 year-on-year mainly due to high inventories of refined products and the drop in demand which notably led to the economic shutdown of the Donges refinery as well as the prolonged shutdown of the distillation unit at the Normandy platform following a fire that affected the distillation unit at the end of 2019.
Monomer production increased 6% in 2020 year-on-year, supported by demand, and notably as a result of the 2019 planned maintenance on the steamcracker at Daesan in South Korea. Polymer production was stable for full-year 2020 compared to full-year 2019.
Non-Group sales for the Refining & Chemicals segment in 2020 were $56,615 million compared to $87,598 million in 2019, a decrease of 35%.
The Refining & Chemicals segment’s adjusted net operating income was $1,039 million for the full-year 2020, a decrease of 65% compared to $3,003 million for the full-year 2019, due to refining margin deterioration, partially offset by resilient petrochemical margins and outperformance of the trading activities. Adjusted net operating income for the Refining & Chemicals segment excludes any after-tax inventory valuation effect and special items. For the full-year 2020, the exclusion of the inventory valuation effect had a positive impact of $1,165 million on the segment’s adjusted net operating income, compared to a negative impact of $371 million for the full-year 2019. For the full-year 2020, the exclusion of special items had a positive impact of $1,022 million on the segment’s adjusted net operating income, compared to a positive impact of $180 million for the full-year 2019. Special items in 2020 included impairments of refining cash-generating units located in France and the United Kingdom. For further information on the recognition of impairment of assets for the Refining & Chemicals segment, refer to Note 3.D to the Consolidated Financial Statements (starting on page F-19).
For the full-year 2020, the Refining & Chemicals segment’s operating cash flow before working capital changes without financial charges (DACF)(25) was $2,472 million, a decrease of 39% compared to $4,072 million for the full-year 2019. For the full-year 2020, the segment’s cash flow from operating activities excluding financial charges, except those related to leases was $2,438 million, a decrease of 36% compared to $3,837 million for the full-year 2019.
For information on the Refining & Chemicals segment’s investments, refer to point 1.4 of chapter 1 of the Universal Registration Document 2020 (starting on page 18), which is incorporated herein by reference. See also “- 5.4 Liquidity and Capital Resources”, below.
In this context, the Refining & Chemicals segment’s ROACE for the full-year 2020 was 8.8% compared to 26.3% for the full-year 2019.
12
Refinery throughput volumes decreased by 10% in 2019 notably due to the shutdown for nearly six months of Grandpuits in France.
Non-Group sales for the Refining & Chemicals segment in 2019 were $87,598 million compared to $92,025 million in 2018, a decrease of 5%.
The Refining & Chemicals segment’s adjusted net operating income was $3,003 million for the full-year 2019, a decrease of 11% compared to $3,379 million in 2018 notably due to a decrease of around 10% in refining and petrochemical margins as well as lower throughput.
Adjusted net operating income for the Refining & Chemicals segment excludes any after-tax inventory valuation effect and special items. In 2019, the exclusion of the inventory valuation effect had a negative impact of $371 million on the Refining & Chemicals segment’s adjusted net operating income, compared to a positive impact of $413 million for the full-year 2018. In 2019, the exclusion of special items had a positive impact of $180 million on the Refining & Chemicals segment’s adjusted net operating income, compared to a positive impact of $116 million for the full-year 2018.
In 2019, the Refining & Chemicals segment’s operating cash flow before working capital changes without financial charges (DACF)(25) decreased by 7% compared to the full-year 2018, from $4,388 million to $4,072 million due to a decrease of approximately 10% in refining and petrochemical margins as well as lower throughput. In 2019, the Refining & Chemicals segment’s cash flow from operating activities excluding financial charges, except those related to leases was $3,837 million compared to $4,308 million for the full-year 2018 due to a decrease of approximately 10% in refining and petrochemical margins as well as lower throughput.
In this context, the Refining & Chemicals segment’s ROACE for the full-year 2019 was 26.3% compared to 31% for the full-year 2018.
B. Marketing & Services segment
Petroleum product sales(a) (kb/d)
Total Marketing & Services sales
1,477
1,845
1,801
· Europe
823
1,021
1,001
· Rest of world
654
824
800
63,451
87,280
90,206
1,441
2,052
1,841
37
101
307
(515)
(598)
(532)
963
1,555
1,616
261
98
36
814
969
1,010
86
162
20
900
1,131
1,030
14.3%
22.3%
25%
Petroleum product sales volumes decreased by 20% in 2020 compared to 2019, in response to the significant slowdown in global activity related to the COVID-19 pandemic. Aviation and marine activities remain severely affected in this context; however, the decline in retail sales was mitigated by network growth in Angola, Saudi Arabia, Brazil and Mexico.
Non-Group sales for the Marketing & Services segment in 2020 were $63,451 million compared to $87,280 million in 2019, a decrease of 27%.
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The Marketing & Services segment’s adjusted net operating income decreased by 26% in 2020 to $1,224 million compared to $1,653 million in 2019. Adjusted net operating income for the Marketing & Services segment excludes any after-tax inventory valuation effect and special items. For the full-year 2020, the exclusion of the inventory valuation effect had a positive impact of $137 million on the segment’s adjusted net operating income, compared to a positive impact of $14 million for the full-year 2019. For the full-year 2020, the exclusion of special items had a positive impact of $124 million on the segment’s adjusted net operating income, compared to a positive impact of $84 million for the full-year 2019.
For the full-year 2020, the Marketing & Services segment’s operating cash flow before working capital changes without financial charges (DACF)(26) $2,180 million, a decrease of 14% compared to $2,546 million for the full-year 2019. For the full-year 2020, the segment’s cash flow from operating activities excluding financial charges, except those related to leases was $2,101 million, a decrease of 19% compared to $2,604 million for the full-year 2019.
For information on the Marketing & Services segment’s investments, refer to point 1.4 of chapter 1 of the Universal Registration Document 2020 (starting on page 18), which is incorporated herein by reference. See also “- 5.4 Liquidity and Capital Resources”, below.
In this context, the Marketing & Services segment’s ROACE for the full-year 2020 was 14.3% compared to 22.3% for the full-year 2018.
In 2019, petroleum product sales increased by 2% compared to 2018, notably due to business developments in the African and American regions, notably Mexico and Brazil.
Non-Group sales for the Marketing & Services segment in 2019 were $87,280 million compared to $90,206 million in 2018, a decrease of 3%.
The Marketing & Services segment’s adjusted net operating income remained stable in 2019 at $1,653 million compared to $1,652 million in 2018. Adjusted net operating income for the Marketing & Services segment excludes any after-tax inventory valuation effect and special items. In 2019, the exclusion of the inventory valuation effect had a positive impact of $14 million on the Marketing & Services segment’s adjusted net operating income, compared to a positive impact of $5 million for the full-year 2018. In 2019, the exclusion of special items had a positive impact of $84 million on the Marketing & Services segment’s adjusted net operating income, compared to a positive impact of $31 million for the full-year 2018.
In 2019, the Marketing & Services segment’s operating cash flow before working capital changes without financial charges (DACF)(26) was $2,546 million, an increase of 18% compared to $2,156 million for the full-year 2018. In 2019, the Marketing & Services segment’s cash flow from operating activities excluding financial charges, except those related to leases decreased by 6% compared to the full-year 2018, from $2,759 million to $2,604 million.
In this context, the Marketing & Services segment’s ROACE for the full-year 2019 was 22.3% compared to 25% for the full-year 2018.
5.4 Liquidity and capital resources
(M$)
Including (increase) decrease in working capital
Cash flow used in investing activities
(13,079)
(17,177)
(14,946)
(15,534)
(19,237)
(22,185)
Total divestments
2,455
2,060
7,239
Cash flow used in financing activities
1,398
(7,709)
(13,925)
Net increase (decrease) in cash and cash equivalents
3,122
(201)
(4,168)
Effect of exchange rates
(354)
(1,110)
Cash and cash equivalents at the beginning of the period
27,352
27,907
33,185
Cash and cash equivalents at the end of the period
31,268
TOTAL’s cash requirements for working capital, capital expenditures, acquisitions and dividend payments over the past three years were financed primarily by a combination of funds generated from operations, net borrowings and divestments of assets. In the current environment, TOTAL expects its external debt to be principally financed from the international debt capital markets. The Group continually monitors the balance between cash flow from operating activities and net expenditures. In the Company’s opinion, its working capital is sufficient for its present requirements.
5.4.1 Capital expenditures
The largest part of TOTAL’s capital expenditures in 2020 of $15,534 million was made up of additions to intangible assets and property, plant and equipment (approximately 75%), with the remainder attributable to equity-method affiliates and to acquisitions of subsidiaries. In the Exploration & Production segment, as described in more detail under point 9.1.6 of chapter 9 of the Universal Registration Document 2020 (on page 438), which is incorporated herein by reference, capital expenditures in 2020 were principally development costs (approximately 75%, mainly for construction of new production facilities), exploration expenditures (successful or unsuccessful, approximately 10%) and acquisitions of proved and unproved properties (approximately 15%). In the Integrated Gas, Renewables & Power segment, approximately 52% of capital expenditures were related mainly to facilities investments with the balance being related mainly to acquisitions. In the Refining & Chemicals segment, approximately 83% of capital expenditures in 2020 were related to refining and petrochemical activities (essentially 74% for existing units including maintenance and major turnarounds and 26% for new constructions), the balance being related mainly to Hutchinson. In the Marketing & Services segment, approximately 88% of capital expenditures in 2020 were development expenditures, mainly in Europe and Africa, with the balance being mainly attributable to acquisitions.
For additional information on capital expenditures, refer to the discussion above in “- 5.1 Overview”, “- 5.2 Group results 2018-2020” and “- 5.3 Business segment reporting”, above, as well as point 1.4.3 of chapter 1 (on page 20) of the Universal Registration Document 2020, which is incorporated herein by reference.
5.4.2 Cash flow
Cash flow from operating activities in 2020 was $14,803 million compared to $24,685 million in 2019 and $24,703 million in 2018. The decrease of $9,882 million from 2019 to 2020 was mainly due to the decrease in net income.
Cash flow used in investing activities in 2020 was $13,079 million compared to $17,177 million in 2019 and $14,946 million in 2018. The decrease of $4,098 million from 2019 to 2020 was mainly due to lower expenditures in the Exploration & Production segment and the Integrated Gas, Power & Renewables segment. The increase of $2,231 million from 2018 to 2019 was mainly due to lower divestments in the Exploration & Production segment. Total expenditures in 2020 were $15,534 million compared to $19,237 million in 2019 and $22,185 million in 2018. During 2020, 44% of the expenditures were made by the Exploration & Production segment (as compared to 47% in 2019 and 62% in 2018), 40% by the Integrated Gas, Power & Renewables segment (as compared to 37% in 2019 and 23% in 2018), 9% by the Refining & Chemicals segment (compared to 9% in 2019 and 8% in 2018) and 7% by the Marketing & Services segment (compared to 7% in 2019 and 7% in 2018). The main source of funding for these expenditures was cash from operating activities and issuances of non-current debt.
For additional information on expenditures, please refer to the discussions in “- 5.1 Overview”, “- 5.2 Group results 2018-2020” and “- 5.3 Business segment reporting”, above, and point 1.4 of chapter 1 and point 6.2.2 of chapter 6 of the Universal Registration Document 2020 (starting on pages 18 and 285 respectively), which are incorporated herein by reference and Note 15.1.D to the Consolidated Financial Statements on page F-76.
Divestments, based on selling price and net of cash sold, in 2020 were $2,455 million compared to $2,060 million in 2019 and $7,239 million in 2018. In 2020, the Group’s principal divestments were assets sales of $1,539 million compared to $1,939 million in 2019, consisting mainly of the sales described in “- 5.2 Group results 2018-2020” above. In 2018, the Group’s principal divestments were assets sales of $5,172 million, consisting mainly of sales of a 4% interest in the Ichthys project in Australia, the Group’s share of the LNG re-gas terminal at Dunkirk, Joslyn in Canada, Rabi in Gabon, the Martin Linge and Visund fields in Norway, an interest in Fort Hills in Canada, SunPower’s sale of its interest in 8point3, the marketing activities of TotalErg in Italy, the sale of the Marketing & Services network in Haiti and the contribution of the Bayport polyethylene unit in the United States to the joint venture formed with Borealis (and Nova prior to 2020) in which TOTAL holds 50%.
Cash flow from/(used in) financing activities in 2020 was $1,398 million compared to $(7,709) million in 2019 and $(13,925) million in 2018. The increase in cash flow from financing activities in 2020 compared to 2019 was primarily due to the increase in the net issuance of non-current debt ($15,800 million in 2020 compared to $8,131 million in 2019) and the decrease in buyback of shares ($611 million in 2020 compared to $2,810 million in 2019). The decrease in cash flow used in financing activities in 2019 compared to 2018 was primarily due to the decrease in buyback of shares ($2,810 million in 2019 compared to $4,328 million in 2018), the increase in the net issuance of non-current debt ($8,131 million in 2019 compared to $649 million in 2018) and the decrease in current financial assets and liabilities ($536 million in 2019 compared to $797 million in 2018).
5.4.3 Indebtedness
The Company’s non-current financial debt at year-end 2020 was $60,203 million(27) compared to $47,773 million at year-end 2019 and $40,129 million at year-end 2018. For further information on the Company’s level of borrowing and the type of financial instruments, including maturity profile of debt and currency and interest rate structure, see point 1.8.1.2 of chapter 1 in the Universal Registration Document 2020 (starting on page 37), which is incorporated herein by reference and Note 15 (“Financial structure and financial costs”) to the Consolidated Financial Statements starting on page F - 70. For further information on the Company’s treasury policies, including the use of instruments for hedging purposes and the currencies in which cash and cash equivalents are held, see “Item 11. Quantitative and Qualitative Disclosures About Market Risk”.
Cash and cash equivalents at year-end 2020 were $31,268 million compared to $27,352 million at year-end 2019 and $27,907 million at year-end 2018.
On March 24, 2021, Moody’s revised TOTAL’s outlook from negative to stable, with its long-term credit rating revised from Aa3 to A1. On February 18, 2021, Standard and Poor’s revised TOTAL’s outlook from credit watch negative to stable and its long-term credit rating from A+ to A.
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5.4.4 Shareholders’ equity
Shareholders’ equity at year-end 2020 was $106,085 million compared to $119,305 million at year-end 2019 and $118,114 million at year-end 2018. Changes in shareholders’ equity in 2020 were primarily due to the impacts of comprehensive income, dividend payments, the issuance of common shares of TOTAL SE and perpetual subordinated notes issued by TOTAL SE in September 2020 (callable in 2030) recorded as equity for €1 billion (or approximately $1.2 billion using the €/$ exchange rate on September 4, 2020 of €1 = $1.1820 as released by the Board of Governors of the Federal Reserve System on September 7, 2020) proceeds of which were used to repurchase part of the €2.5 billion notional amount of existing perpetual subordinated notes issued by TOTAL SE in February 2015, of which €1 billion were then outstanding, and the buy-back of TOTAL SE shares. Changes in shareholders’ equity in 2019 were primarily due to the impacts of comprehensive income, dividend payments, the issuance of common shares of TOTAL SE and perpetual subordinated notes in April 2019 (callable in 2021) recorded as equity for €1.5 billion (or approximately $1.7 billion using the €/$ exchange rate on April 19, 2019 of €1 = $1.1246 as released by the Board of Governors of the Federal Reserve System on April 22, 2019) proceeds of which were used to repurchase €1.5 billion notional amount of existing perpetual subordinated notes issued by TOTAL SE in 2015, and the buy-back of TOTAL SE shares. Changes in shareholders’ equity in 2018 were primarily due to the impacts of comprehensive income, dividend payments, the issuance of common shares of TOTAL SE and the buy-back of TOTAL SE shares in the context of the shareholder return policy announced in February 2018.
In 2020, TOTAL SE bought back 13,236,044 TOTAL SE shares on the market, i.e., 0.50% of the share capital as of December 31, 2020: 12,233,265 TOTAL SE shares for an amount of $0.55 billion(28), within the framework of the $5 billion share buyback program over the 2018-2020 period and 1,002,779 TOTAL SE shares were bought back in order to cover the performance share plans approved by the Board of Directors.
In 2019, TOTAL SE bought back 52,389,336 TOTAL SE shares on the market, i.e., 2.01% of the share capital as of December 31, 2019: 3,589,035 TOTAL SE shares were bought back in order to cover the performance share plans approved by the Board of Directors and 48,800,301 TOTAL SE shares were bought back for cancellation, including:
Additionally, the Board of Directors, at a meeting held on December 11, 2019, decided, following the authorization of the Extraordinary Shareholders’ Meeting on May 26, 2017, to cancel 65,109,435 treasury shares of TOTAL SE including: 34,860,133 TOTAL SE shares issued, with no discount, in 2019 for payment of the first, second and third interim dividends for the fiscal year ended December 31, 2018 and 30,249,302 TOTAL SE shares repurchased within the framework of the $5 billion share buyback program over the 2018-2020 period. This transaction had no impact on the consolidated financial statements of TOTAL SE, the number of fully-diluted weighted-average shares or on the earnings per share.
In 2018, the Company bought back 72,766,481 TOTAL SE shares on the market, i.e., 2.76% of the share capital as of December 31, 2018. Of these, 71,950,977 TOTAL SE shares were bought back for cancellation, including:
The remaining 815,504 TOTAL SE shares were bought back in order to cover the performance share plans approved by the Board of Directors on July 27, 2016, and July 26, 2017.
Additionally, the Board of Directors of the Company, at a meeting held on December 12, 2018, decided, following the authorization of the Extraordinary Shareholders’ Meeting on May 26, 2017, to cancel 44,590,699 treasury shares of TOTAL SE, including 28,445,840 TOTAL SE shares issued, with no discount, in 2018 for payment of the second and third interim dividends, as well as the final dividend, for fiscal year 2017 and 16,144,859 TOTAL SE shares bought back pursuant to the shareholder return policy, up to an amount of $5 billion over the 2018-2020 period. This cancellation of shares had no impact on the consolidated financial statements of TOTAL SE, the number of fully-diluted weighted-average shares or on the earnings per share.
5.4.5 Net-debt-to-capital ratio
As of December 31, 2020, TOTAL’s net-debt-to-capital ratio excluding leases(31) was 21.7% compared to 16.7% and 14.3% at year-ends 2019 and 2018 respectively. The increase from 2019 to 2020 and from 2018 to 2019 was mostly due to the increase of net debt. For additional information, please refer to the Notes to the Consolidated Financial Statements (starting on page F-14).
As of December 31, 2020, TOTAL SE had $14,902 million of long-term confirmed lines of credit, of which $11,256 million were unused.
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5.5 Guarantees and other off-balance sheet arrangements
As of December 31, 2020, the guarantees provided by TOTAL SE in connection with the financing of the Ichthys LNG project amounted to $4,912 million. As of December 31, 2019, the guarantees amounted to $4,937 million. As of December 31, 2018, the guarantees amounted to $9,425 million.
As of December 31, 2020, the guarantees provided by TOTAL SE in connection with the financing of the Yamal LNG project amounted to $3,250 million by TOTAL SE. As of December 31, 2019, the guarantees amounted to $3,688 million. As of December 31, 2018, the guarantees amounted to $3,875 million.
As of December 31, 2020, TOTAL SE has confirmed guarantees for TOTAL Refining SAUDI ARABIA SAS shareholders' advances for an amount of $1,164 million. As of December 31, 2019, the guarantees amounted to $1,184 million. As of December 31, 2018, the guarantees amounted to $1,462 million.
As of December 31, 2020, the guarantee given in 2008 by TOTAL SE in connection with the financing of the Yemen LNG project amounted to $509 million, the same amount as in 2019. As of December 31, 2018, the guarantee given in 2008 by TOTAL SE in connection with the financing of the Yemen LNG project amounted to $551 million.
As of December 31, 2020, guarantees provided by TOTAL SE in connection with the financing of the Bayport Polymers LLC project, amounted to $1,820 million, the same amount as in 2019 and 2018.
These guarantees and other information on the Company’s commitments and contingencies are presented in Note 13 (“Off balance sheet commitments and contractual obligations”) to the Consolidated Financial Statements (starting on page F-64).
The Group does not currently consider that these guarantees, or any other off-balance sheet arrangements of the Company or any other members of the Group, have or are reasonably likely to have, currently or in the future, a material effect on the Group’s financial condition, changes in financial condition, revenues or expenses, results of operation, liquidity, capital expenditures or capital resources.
5.6 Contractual obligations
Less than
More than
Payment due by period (M$)
1 year
1-3 years
3-5 years
5 years
Total
Non-current debt obligations net of hedging instruments(a)
13,755
8,990
25,960
48,705
Current portion of non-current debt obligations net of hedging instruments(b)
4,674
Lease obligations recorded in the balance sheet(c)
1,207
1,858
1,320
4,558
8,943
Asset retirement obligations(d)
463
1,067
773
13,065
15,368
Lease obligations not recorded in the balance sheet(c)
704
411
215
415
Purchase obligations(e)
11,719
21,210
17,916
92,332
143,177
TOTAL
18,767
38,301
29,214
136,330
222,612
For additional information on the Group’s contractual obligations, refer to Note 13 to the Consolidated Financial Statements (starting on page F-64). The Group has other obligations in connection with pension plans that are described in Note 10 (“Payroll, staff and employee benefits obligations”) to the Consolidated Financial Statements (starting on page F-57). As these obligations are not contractually fixed as to timing and amount, they have not been included in this disclosure. Other non-current liabilities, detailed in Note 12 (“Provisions and other non-current liabilities”) to the Consolidated Financial Statements (starting on page F-62), are liabilities related to risks that are probable and amounts that can be reasonably estimated. However, no contractual agreements exist related to the settlement of such liabilities, and the timing of the settlement is not known.
5.7 Research and development
For a discussion of the Group’s R&D policies and activities, refer to points 1.4.2 and 1.5 of chapter 1 (starting on pages 19 and 20 respectively) of the Universal Registration Document 2020, which are incorporated herein by reference.
17
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
The following information concerning directors and senior management from the Universal Registration Document 2020 is incorporated herein by reference:
The following information concerning compensation from the Universal Registration Document 2020 is incorporated herein by reference:
The following information concerning Board practices and corporate governance from the Universal Registration Document 2020 is incorporated herein by reference:
The following information concerning employees and share ownership from the Universal Registration Document 2020 is incorporated herein by reference:
TOTAL believes that the relationship between its management and labor unions is, in general, satisfactory.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
The following information concerning shareholders from the Universal Registration Document 2020 is incorporated herein by reference:
The Group’s main transactions with related parties (principally all the investments carried under the equity method) and the balances receivable from and payable to them are shown in point 8.3 of Note 8 (“Equity affiliates, other investments and related parties”) to the Consolidated Financial Statements (on page F-46). In the ordinary course of its business, TOTAL enters into transactions with various organizations with which certain of its directors or executive officers may be associated, but no such transactions of a material or unusual nature have been entered into during the period commencing on January 1, 2020 and ending on the date of this document. For further information on regulated agreement and undertakings and related-party transactions, refer to point 4.4.1 of chapter 4 of the Universal Registration Document 2020 (on page 209), which is incorporated herein by reference.
ITEM 8. FINANCIAL INFORMATION
The following information from the Universal Registration Document 2020 is incorporated herein by reference:
The Consolidated Financial Statements and Notes thereto are included in pages F-9 to F-109 attached hereto.
Except for certain events mentioned in “Item 5. Operating and financial review and prospects ” and, point 3.5 of chapter 3 (on page 108) of the Universal Registration Document 2020, which is incorporated herein by reference and Note 17 to the Consolidated Financial Statements (on page F-91), no significant changes to the Group’s financial or commercial situation have occurred since the date of the Company’s Consolidated Financial Statements.
Refer to “Item 18. Financial statements” for the reports of the statutory auditors.
Our independent registered public accounting firms, as auditors of companies that are traded publicly in the United States and firms registered with the Public Company Accounting Oversight Board (United States), or the PCAOB, are required by the laws of the United States to undergo regular inspections by the PCAOB. Since the expiration of the cooperative arrangement between the PCAOB and the High council for statutory auditors (Haut conseil du commissariat aux comptes) in December 2019, the PCAOB is unable to conduct inspections on PCAOB registered audit firms located in France until such time as a new cooperative arrangement is entered into. Discussions between the PCAOB and the High council for statutory auditors (Haut conseil du commissariat aux comptes) are still ongoing.
ITEM 9. THE OFFER AND LISTING
9.1 Markets
The principal trading markets for the Company shares are the following: Euronext Paris (France) and the New York Stock Exchange (“NYSE”, United States). The shares are also listed on Euronext Brussels (Belgium) and the London Stock Exchange (United Kingdom).
9.2 Offer and listing details
Provided below is certain information on trading on Euronext Paris and the New York Stock Exchange. For additional information on listing details and share performance, refer to point 6.1 in chapter 6 of the Universal Registration Document 2020 (starting on page 282), which is incorporated herein by reference.
9.2.1 Trading on Euronext Paris
Official trading of listed securities on Euronext Paris, including the Company shares, is transacted through French investment service providers that are members of Euronext Paris and takes place continuously on each business day in Paris from 9:00 a.m. to 5:30 p.m. (Paris time), with a fixing of the closing price at 5:35 p.m. (Paris time). Euronext Paris may suspend or resume trading in a security listed on Euronext Paris if the quoted price of the security exceeds certain price limits defined by the regulations of Euronext Paris. The Euronext Paris ticker symbol for TOTAL SE is FP.
The markets of Euronext Paris settle and transfer ownership two trading days after a transaction (T+2). Highly liquid shares, including those of the Company, are eligible for deferred settlement (Service de Règlement Différé - SRD). Payment and delivery for shares under the SRD occurs on the last trading day of each month. Use of the SRD service requires payment of a commission.
In France, the Company shares are included in the principal index published by Euronext Paris (the “CAC 40 Index”). The CAC 40 Index is derived daily by comparing the total market capitalization of forty stocks traded on Euronext Paris to the total market capitalization of the stocks that made up the CAC 40 Index on December 31, 1987. Adjustments are made to allow for expansion of the sample due to new issues. The CAC 40 Index indicates trends in the French stock market as a whole and is one of the most widely followed stock price indices in France. In the UK, the shares are included in both FTSE Eurotop 100 and FTSEurofirst 100 indices. As a result of the creation of Euronext, the Company shares are included in Euronext 100, the index representing Euronext’s blue chip companies based on market capitalization. The Company shares are also included in the Stoxx Europe 50 and Euro Stoxx 50, blue chip indices comprised of the fifty most highly capitalized and most actively traded equities throughout Europe and within the European Monetary Union, respectively.
9.2.2 Trading on the New York Stock Exchange
ADSs evidenced by ADRs have been listed on the NYSE since October 25, 1991. JPMORGAN CHASE BANK, N.A. serves as depositary with respect to the ADSs evidenced by ADRs traded on the NYSE. One ADS corresponds to one TOTAL SE share.
The NYSE ticker symbol for TOTAL SE is TOT.
ITEM 10. ADDITIONAL INFORMATION
10.1 Share capital
10.2 Memorandum and articles of association
10.3 Material contracts
There have been no material contracts (not entered into in the ordinary course of business) entered into by members of the Group since March 30, 2019.
10.4 Exchange controls
Under current French exchange control regulations, no limits exist on the amount of payments that TOTAL may remit to residents of the United States. Laws and regulations concerning foreign exchange controls do require, however, that an accredited intermediary must handle all payments or transfer of funds made by a French resident to a non-resident.
10.5 Taxation
10.5.1 General
This section generally summarizes the material U.S. federal income tax and French tax consequences of owning and disposing of shares or ADSs of TOTAL SE to U.S. Holders that hold their shares or ADSs as capital assets for tax purposes. A U.S. Holder is a beneficial owner of shares or ADSs that is (i) a citizen or resident of the United States for U.S. federal income tax purposes, (ii) a domestic corporation or other domestic entity treated as a corporation for U.S. federal income tax purposes, (iii) an estate whose income is subject to U.S. federal income tax regardless of its source, or (iv) a trust if (1) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S. persons are authorized to control all substantial decisions of the trust or (2) it has a valid election in effect under applicable U.S. Treasury regulations to be treated as a United States person.
This section does not address the Medicare tax on net investment income, U.S. federal estate or gift taxes or any taxes from jurisdictions other than the United States and France. This section does not apply to members of special classes of holders subject to special rules, including without limitation:
If a partnership or other entity or arrangement treated as a partnership for U.S. federal income tax purposes holds shares or ADSs, the tax treatment of a partner will generally depend upon the status of the partner and upon the activities of the partnership. Partners of a partnership holding these shares or ADSs should consult their tax advisors as to the tax consequences of owning or disposing of shares or ADSs, as applicable.
Under French law, specific rules apply to trusts, in particular specific tax and filing requirements; additionally, specific rules apply to wealth, estate and gift taxes as they apply to trusts. Given the complex nature of these rules and the fact that their application varies depending on the status of the trust, the grantor, the beneficiary and the assets held in the trust, the following summary does not address the tax treatment of shares or ADSs held in a trust. If shares or ADSs are held in trust, the grantor, trustee and beneficiary are urged to consult their own tax advisor regarding the specific tax consequences of acquiring, owning and disposing of shares or ADSs.
In addition, the discussion below is limited to U.S. Holders that (i) are residents of the United States for purposes of the Treaty (as defined below), (ii) do not maintain a permanent establishment or fixed base in France to which the shares or ADSs are attributable and through which the respective U.S. Holders carry on, or have carried on, a business (or, if the holder is an individual, performs or has performed independent personal services), and (iii) are otherwise eligible for the benefits of the Treaty in respect of income and gain from the shares or ADSs (in particular, under the “Limitation on Benefits” provision of the Treaty). In addition, this section is based in part upon the representations of the Depositary and the assumption that each obligation in the Deposit Agreement and any related agreement will be performed in accordance with its terms.
The discussions below of the material U.S. federal income tax consequences to U.S. Holders of owning and disposing of shares or ADSs of TOTAL SE are based on the Internal Revenue Code of 1986, as amended (IRC), Treasury regulations promulgated thereunder and judicial and administrative interpretations thereof, as well as on the Convention Between the Government of the United States of America and the Government of the French Republic for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and Capital dated August 31, 1994, as amended (the “Treaty”), all as in effect on the date hereof and all of which are subject to change, which change could apply retroactively and could affect the tax consequences described below. The description of the material French tax consequences is based on the laws of the Republic of France and French tax regulations, all as currently in effect, as well as the Treaty, as currently in effect. These laws, regulations and the Treaty are subject to change, possibly on a retroactive basis.
In general, and taking into account the earlier assumptions, for U.S. federal income tax purposes, a U.S. Holder of ADRs evidencing ADSs will be treated as the owner of the shares represented by those ADRs. Exchanges of shares for ADRs, and ADRs for shares, generally will not be subject to U.S. federal income tax. The U.S. Treasury has expressed concerns that intermediaries in the chain of ownership between the holder of an ADS and the issuer of the security underlying the ADS may be taking actions that are inconsistent with the beneficial ownership of the underlying security. Accordingly, the creditability of any French taxes and the availability of the reduced tax rate for any dividends received by certain non-corporate U.S. Holders (as discussed below), could be affected by actions taken by intermediaries in the chain of ownership between the holders of the ADSs and TOTAL if as a result of such actions the U.S. Holders of the ADSs are not properly treated as beneficial owners of underlying shares.
This discussion is intended only as a descriptive summary and does not purport to be a complete analysis or listing of all potential tax effects of the ownership or disposition of the shares and ADSs and is not intended to substitute competent professional advice. Individual situations of holders of shares and ADSs may vary from the description made below. The following summary does not address the French tax treatment applicable to dividends paid in so-called “Non Cooperative Countries and Territories” (“NCCT”) within the meaning of Article 238-0 A of the French Code général des impôts (“French Tax Code”) as such provision or list may be amended from time to time or replaced by any other provision or list having a similar purpose. It does not apply to dividends paid to persons established or domiciled in such a NCCT, or paid to a bank account opened in a financial institution located in such a NCCT, nor does it apply to capital gains realized by persons established or domiciled in such a NCCT. Furthermore, the following summary does not address the tax treatment applicable to temporary transfers and other similar transactions which could, under certain conditions, fall within the scope of the new anti-abuse measure set forth in Article 119 bis A of the French Tax Code.
Holders are urged to consult their own tax advisors regarding the U.S. federal, state and local, and the French and other tax consequences of owning and disposing shares or ADSs of TOTAL in their respective circumstances. In particular, a holder is encouraged to confirm with its advisor whether the holder is a U.S. Holder eligible for the benefits of the Treaty.
10.5.2 Taxation of dividends
French taxation
The term “dividends” used in the following discussion means dividends within the meaning of the Treaty.
Dividends paid to non-residents of France who are U.S. Holders are in principle subject to a French withholding tax regardless of whether they are paid in cash, in shares or a mix of both. The French withholding tax is levied (i) at a rate of 12.8% for dividends paid to U.S. Holders who are individuals and (ii) at a rate of 28% in 2020 (to be reduced and aligned on the standard corporate income tax rate set forth in the first sentence of the second paragraph of Article 219-I of the French Tax Code which is anticipated to decrease to 25% over the next fiscal years) for dividends paid to U.S. Holders that are legal entities (the “Legal Entities U.S. Holders”) subject to more favorable provisions of the Treaty as described below and certain more favorable French domestic law provisions.
However, under the Treaty, a U.S. Holder is generally entitled to a reduced rate of French withholding tax of 15% with respect to dividends, provided that certain requirements are satisfied. This reduced rate is, in practice, only of interest to Legal Entities U.S. Holders subject to the withholding tax at a rate of 28% in 2020.
Administrative guidelines (Bulletin Officiel des Finances Publiques, BOI-INT-DG-20-20-20-20-12/09/2012) (the “Administrative Guidelines”) set forth the conditions under which the reduced French withholding tax at the rate of 15% may be available. The immediate application of the reduced 15% rate is available to those U.S. Holders that may benefit from the so-called “simplified procedure” (within the meaning of the Administrative Guidelines).
Under the “simplified procedure”, U.S. Holders may claim the immediate application of withholding tax at the rate of 15% on the dividends to be received by them, provided that:
Where the U.S. Holder’s identity and tax residence are known by the French paying agent, the latter may release such U.S. Holder from furnishing to (i) the financial institution managing its securities account, or (ii) as the case may be, the U.S. Internal Revenue Service (“IRS”), the abovementioned certificate of residence, and apply the 15% withholding tax rate to dividends it pays to such U.S. Holder.
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For a U.S. Holder that is not entitled to the “simplified procedure” and whose identity and tax residence are not known by the paying agent at the time of the payment, the French withholding tax at the domestic rate will be levied at the time the dividends are paid. Such U.S. Holder, however, may be entitled to a refund of the withholding tax in excess of the 15% rate under the “standard procedure”, as opposed to the “simplified procedure”, provided that the U.S. Holder furnishes to the French paying agent an application for refund on forms No. 5000-FR and 5001-FR (or any other relevant form to be issued by the French tax authorities) certified by the U.S. financial institution managing the U.S. Holder’s securities account (or, if not, by the competent U.S. tax authorities) before December 31 of the second year following the date of payment of the withholding tax at the domestic rate to the French tax authorities, according to the requirements provided by the Administrative Guidelines.
Copies of forms No. 5000-FR and 5001-FR (or any other relevant form to be issued by the French tax authorities) as well as the form of the certificate of residence and the U.S. financial institution certification, together with instructions, are available from the IRS and the French tax authorities.
These forms, together with instructions, are to be provided by the Depositary to all U.S. Holders of ADRs registered with the Depositary. The Depositary is to use reasonable efforts to follow the procedures established by the French tax authorities for U.S. Holders to benefit from the immediate application of the 15% French withholding tax rate or, as the case may be, to recover the excess 15% French withholding tax initially withheld and deducted in respect of dividends distributed to them by TOTAL. To effect such benefit or recovery, the Depositary shall advise such U.S. Holder to return the relevant forms to it, properly completed and executed. Upon receipt of the relevant forms properly completed and executed by such U.S. Holder, the Depositary shall cause them to be filed with the appropriate French tax authorities, and upon receipt of any resulting remittance, the Depositary shall distribute to the U.S. Holder entitled thereto, as soon as practicable, the proceeds thereof in U.S. dollars.
The identity and address of the French paying agent are available from TOTAL.
In addition, subject to certain specific filing obligations, there is no withholding tax on dividend payments made by French companies to:
Collective investment funds and companies mentioned in (ii) above are urged to consult their own tax advisors to confirm whether they are eligible to such provisions and under which conditions.
Finally, companies having their seat in a Member State of the European Union or in another Member State of the European Economic Area Agreement or any third country that has concluded with France a tax treaty including an administrative assistance provision to tackle tax evasion and avoidance and which is not a “non-cooperative State or territory”, as defined by Article 238-0 A of the French Tax Code, such as the United States, and being in a tax loss position might, provided that the conditions set forth in Article 235 quater of the French Tax Code are met, benefit from a temporary reimbursement of the withholding tax applicable on dividend payments, the corresponding amount having to be refunded to the French treasury, in particular, at the time they become in a profitable tax position.
U.S. taxation
For U.S. federal income tax purposes and subject to the passive foreign investment company rules discussed below, the gross amount of any dividend that a U.S. Holder must include in gross income equals the amount paid by TOTAL (i.e., the net distribution received plus any tax withheld therefrom) from its current or accumulated earnings and profits (as determined for U.S. federal income tax purposes). Dividends will not be eligible for the dividends-received deduction allowed to a U.S. corporation under IRC section 243. Distributions, if any, in excess of such current and accumulated earnings and profits (as determined for U.S. federal income tax purposes) will constitute a non-taxable return of capital to a U.S. Holder and will be applied against and reduce such U.S. Holder’s tax basis in such shares or ADSs, but not below zero. To the extent that such distributions are in excess of such basis, the distributions will constitute capital gain. Because TOTAL does not currently maintain calculations of earnings and profits for U.S. federal income tax purposes, a U.S. Holder of shares or ADSs of TOTAL should expect to treat the entire amount of distributions paid with respect to the shares or ADSs as dividends.
Dividends paid to a non-corporate U.S. Holder that constitute “qualified dividend income” will be taxable to the holder at the preferential rates applicable to long-term capital gains provided (1) the Company is neither a passive foreign investment company nor treated as such with respect to the U.S. Holder for the taxable year in which the dividend was paid and the preceding taxable year and (2) certain holding period requirements are met. TOTAL believes that dividends paid by TOTAL with respect to its shares or ADSs will be qualified dividend income. The dividend is taxable to the U.S. Holder when the holder, in the case of shares, or the Depositary, in the case of ADSs, receives the dividend, actually or constructively.
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The amount of any dividend distribution includible in the income of a U.S. Holder equals the U.S. dollar value of the euro payment made, determined at the spot euro/dollar exchange rate on the date the dividend distribution is includible in the U.S. Holder’s income, regardless of whether the payment is in fact converted into U.S. dollars. Any gain or loss resulting from currency exchange fluctuations during the period from the date the dividend payment is includible in the U.S. Holder’s income to the date the payment is converted into U.S. dollars will generally be treated as ordinary income or loss and, for foreign tax credit limitation purposes, from sources within the United States and will not be eligible for the special tax rate applicable to qualified dividend income. The U.S. federal income tax rules governing the availability and computation of foreign tax credits are complex. U.S. Holders should consult their own tax advisors concerning the implications of these rules in light of their particular circumstances.
Subject to certain conditions and limitations, U.S. Holders may elect to claim a credit against their U.S. federal income tax liability for the net amount of French taxes withheld in accordance with the Treaty and paid over to the French tax authorities. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. In addition, special rules apply in determining the foreign tax credit limitation with respect to dividends that are subject to the preferential tax rates. To the extent a refund of the tax withheld is available to a U.S. Holder under French law or under the Treaty, the amount of tax withheld that is refundable will not be eligible for credit against such holder’s U.S. federal income tax liability. For this purpose, dividends distributed by TOTAL will generally constitute “passive income” for purposes of computing the foreign tax credit allowable to the U.S. Holder.
If a U.S. Holder has the option to receive a distribution in shares (or ADSs) instead of cash, the distribution of shares (or ADSs) will be taxable as if the holder had received an amount equal to the fair market value of the distributed shares (or ADSs), and such holder’s tax basis in the distributed shares (or ADSs) will be equal to such amount.
10.5.3 Taxation of disposition of shares
A U.S. Holder will not be subject to French tax on any capital gain from the sale or exchange of the shares or ADSs or redemption of the underlying shares that the ADSs represent.
Pursuant to Article 235 ter ZD of the French tax code, a financial transaction tax applies, under certain conditions, to the acquisition of shares of publicly traded companies registered in France having a market capitalization over €1 billion on December 1 of the year preceding the acquisition. A list of the companies within the scope of the financial transaction tax for 2020 is published in the Administrative guidelines Bulletin Officiel des Finances Publiques, BOI-ANNX-000467-23/12/2020. TOTAL is included in this list, although it cannot be excluded that this list might be amended in the future. The tax also applies to the acquisition of ADRs evidencing ADSs. The financial transaction tax is due at a rate of 0.3% on the price paid to acquire the shares. The person or entity liable for the tax is generally the provider of investment services defined in Article L. 321-1 of the French Monetary and Financial Code (prestataire de services d’investissement). Investment service providers providing equivalent services outside France are subject to the tax under the same terms and conditions. Taxable transactions are broadly construed but several exceptions may apply. In general, non-income taxes, such as this financial transaction tax, paid by a U.S. Holder are not eligible for a foreign tax credit for U.S. federal income tax purposes. U.S. Holders should consult their own tax advisors as to the tax consequences and creditability of such financial transaction tax.
For U.S. federal income tax purposes and subject to the passive foreign investment company rules discussed below, a U.S. Holder will generally recognize capital gain or loss upon the sale or other disposition of shares or ADSs equal to the difference between the U.S. dollar value of the amount realized on the sale or other disposition and the holder’s tax basis, determined in U.S. dollars, in the shares or ADSs. The gain or loss will generally be U.S. source gain or loss and will be long-term capital gain or loss if the U.S. Holder’s holding period of the shares or ADSs is more than one year at the time of the disposition. Long-term capital gain of a non-corporate U.S. Holder is generally taxed at preferential rates if specified minimum holding periods are met. The deductibility of capital losses is subject to limitation.
10.5.4 Passive foreign investment company status
TOTAL believes that the shares and ADSs are not treated as stock of a passive foreign investment company (PFIC) for U.S. federal income tax purposes, and TOTAL does not expect that it will be treated as a PFIC in the current or future taxable years. This conclusion is a factual determination that is made annually and thus is subject to uncertainty and change. In general, a non-U.S. corporation will be a PFIC for any taxable year if either (i) at least 75% of its gross income for such year is passive income or (ii) at least 50% of the value of its assets (based on an average of the quarterly values of the assets) during such year is attributable to assets that produce passive income or are held for the production of passive income. If TOTAL were treated as a PFIC with respect to a U.S. Holder for any taxable year, the U.S. Holder generally would suffer adverse tax consequences, that may include having gains realized on the disposition of the shares or ADSs treated as ordinary income rather than capital gain and being subject to punitive interest charges on the receipt of certain distributions and on the proceeds of the sale or other disposition of the shares or ADSs. U.S. Holders would also be subject to information reporting requirements on an annual basis. U.S. Holders should consult their tax advisors about the potential application of the PFIC rules to shares or ADSs.
10.5.5 French estate and gift taxes
In general, a transfer of shares or ADSs by gift or by reason of the death of a U.S. Holder that would otherwise be subject to French gift or inheritance tax, respectively, will not be subject to such French tax by reason of the Convention between the United States of America and the French Republic for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Estates, Inheritances and Gifts, dated November 24, 1978, as amended, unless the donor or the transferor is domiciled in France at the time of the gift, or at the time of the transferor’s death, or if the shares or ADSs were used in, or held for use in, the conduct of a business through a permanent establishment or a fixed base in France.
10.5.6 U.S. state and local taxes
In addition to U.S. federal income tax, U.S. Holders of shares or ADSs may be subject to U.S. state and local taxes with respect to their shares or ADSs. U.S. Holders should consult their own tax advisors.
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10.6 Dividends and paying agents
The information set forth in point 6.2.2 of chapter 6 of the Universal Registration Document 2020 (on page 285) is incorporated herein by reference.
10.7 Statements by experts
The independent third-party report of DeGolyer and MacNaughton, a petroleum engineering consulting firm with address at 5001 Spring Valley Road, Suite 800 East, Dallas, Texas 75244, is attached as Exhibit 15.3 to this Form 20-F. This report provides TOTAL estimates of proved oil, condensate and gas reserves, as of December 31, 2020, of certain properties attributable to or controlled by PAO NOVATEK. As evidenced by Exhibit 15.4 to this Form 20-F, DeGolyer and MacNaughton has consented to the inclusion of their report in this Form 20-F.
10.8 Documents on display
TOTAL files annual, periodic and other reports and information with the Securities and Exchange Commission. All of TOTAL’s SEC filings made after December 31, 2001 are available to the public at the SEC website at www.sec.gov and from certain commercial document retrieval services.
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Please refer to Notes 15.3 (“Financial risks management”) (starting on page F-83) and 16.2 (“Oil, Gas and Power markets related risks management”) (on page F-91) to the Consolidated Financial Statements, for a qualitative and quantitative discussion of the Group’s exposure to market risks. Please also refer to Notes 15.2 (“Fair value of financial instruments (excluding commodity contracts)”) (starting on page F-77) and 16 (“Financial instruments related to commodity contracts”) (starting on page F-88) to the Consolidated Financial Statements, for details of the different derivatives owned by the Group in these markets.
As part of its financing and cash management activities, the Group uses derivative instruments to manage its exposure to changes in interest rates and foreign exchange rates. These instruments are mainly interest rate and currency swaps. The Group may also occasionally use futures contracts and options. These operations and their accounting treatment are detailed in Notes 15.2 and 16 to the Consolidated Financial Statements.
The financial performance of TOTAL is sensitive to a number of factors; the most significant being oil and gas prices, generally expressed in dollars, and exchange rates, in particular that of the dollar versus the euro. Generally, a rise in the price of crude oil has a positive effect on earnings as a result of an increase in revenues from oil and gas production. Conversely, a decline in crude oil prices reduces revenues. The impact of changes in crude oil prices on the activities of the Refining & Chemicals and Marketing & Services segments depends upon the speed at which the prices of finished products adjust to reflect these changes. All of the Group’s activities are, to various degrees, sensitive to fluctuations in the dollar/euro exchange rate.
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
12.1 American depositary receipts fees and charges
JPMORGAN CHASE BANK, N.A., as depositary for the TOTAL SE ADR program, collects its fees for delivery and surrender of ADRs directly from investors depositing shares or surrendering ADRs for the purpose of withdrawal or from intermediaries acting for them. The depositary collects fees for making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of distributable property to pay the fees. The depositary may generally refuse to provide fee-attracting services until its fees for those services are paid. A copy of the depositary agreement is attached as Exhibit (a) to the registration statement on Form F-6 (Reg. No. 333-199737) filed by the Company with the SEC on October 31, 2014.
Investors must pay:
For:
$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)
-
Issuance of ADRs, including issuances resulting from a distribution of shares or rights or other property, stocks splits or mergers
Cancellation of ADRs for the purpose of withdrawal, including if the deposit agreement terminates
A fee equivalent to the fee that would be payable if securities distributed to the investor had been shares and the shares had been deposited for issuance of ADSs
Distribution, by the depositary, of deposited securities to ADS registered holders
Registration or transfer fees
Transfer and registration of shares on the Company’s share register to or from the name of the depositary or its agent when the investor deposits or withdraws shares
Expenses of the depositary
Cable, telex and facsimile transmissions (when expressly provided in the deposit agreement)
Converting foreign currency to U.S. dollars
Taxes and other governmental charges the depositary or the custodian have to pay on any ADS or share underlying an ADS, for example, stock transfer taxes, stamp duty or withholding taxes
As necessary
Any charges incurred by the depositary or its agents for servicing the deposited securities
Fees paid to TOTAL SE by the depositary
In consideration for acting as depositary, JPMORGAN CHASE BANK, N.A., has agreed to share, on an annual basis, with TOTAL SE portions of certain fees collected, less ADS program expenses paid by the Depositary. For example, these expenses include the Depositary’s annual program fees, transfer agency fees, custody fees, legal expenses, postage and envelopes for mailing annual and interim financial reports, printing and distributing dividend checks, electronic filing of U.S. federal tax information, mailing required tax forms, stationery, postage, facsimile and telephone calls and the standard out-of-pocket maintenance costs for the ADSs.
In the year ended December 31, 2020, the ADR depositary paid aggregate fees and made other direct and indirect payments to TOTAL SE in an amount of USD $11.6 million.
For additional information on TOTAL SE shares and the American depositary shares, please refer to Exhibit 2.2 “Description of securities registered under Section 12 of the Exchange Act”.
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
ITEM 15. CONTROLS AND PROCEDURES
15.1 Disclosure controls and procedures
An evaluation was carried out under the supervision and with the participation of the Group’s management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness, as of the end of the period covered by this report, of the design and operation of the Group’s disclosure controls and procedures, which are defined as those controls and procedures designed to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, summarized and reported within specified time periods. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can provide only reasonable assurance of achieving their control objectives. Based on this evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the design and operation of these disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in the reports that the Company files under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the applicable rules and forms, and that it is accumulated and communicated to management, including themselves, as appropriate to allow timely decisions regarding required disclosure.
15.2 Management’s annual report on internal control over financial reporting
The Group’s management is responsible for establishing and maintaining adequate internal control over financial reporting. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements and even when determined to be effective, can only provide reasonable assurance with respect to financial statement preparation and presentation. Also, the effectiveness of an internal control system may change over time.
The Group’s management, including the Chief Executive Officer and the Chief Financial Officer, conducted an evaluation of the effectiveness of internal control over financial reporting using the criteria set forth in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on the results of this evaluation, the Group’s management concluded that its internal control over financial reporting was effective as of December 31, 2020.
The effectiveness of internal control over financial reporting as of December 31, 2020, was audited by ERNST & YOUNG Audit and KPMG Audit, a division of KPMG S.A., independent registered public accounting firms, as stated in their report included starting on page F-2 attached hereto.
15.3 Changes in internal control over financial reporting
There were no changes in the Group’s internal control over financial reporting that occurred during the period covered by this report that have materially affected, or that were reasonably likely to materially affect, the Group’s internal control over financial reporting.
15.4 Internal control and risk management procedures
For additional information, refer to points 3.3 and 3.6 of chapter 3 of the Universal Registration Document 2020 (starting on pages 101 and 109, respectively), which are incorporated herein by reference.
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
Mr. Patrick Artus is the Audit Committee financial expert. He is an independent member of the Board of Directors in accordance with the NYSE listing standards applicable to TOTAL.
ITEM 16B. CODE OF ETHICS
At its meeting on October 27, 2016, the Board of Directors adopted a revised code of ethics that applies to its Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer and the financial and accounting officers for its principal activities. A copy of this code of ethics is included as an exhibit to this Annual Report.
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
16C.1 Fees for accountants’ services
The information set forth in point 4.4.5.2 of chapter 4 of the Universal Registration Document 2020 (on page 213) is incorporated herein by reference.
16C.2 Audit Committee pre-approval policy
The Audit Committee has adopted an Audit and Non-Audit Services Pre-Approval Policy that sets forth the procedures and the conditions pursuant to which services proposed to be performed by the statutory auditors may be pre-approved and that are not prohibited by regulatory or other professional requirements. This policy provides for both pre-approval of certain types of services through the use of an annual budget approved by the Audit Committee for these types of services and special pre-approval of services by the Audit Committee on a case-by-case basis. The Audit Committee reviews on an annual basis the services provided by the statutory auditors. During 2019, no audit-related fees, tax fees or other non-audit fees were approved by the Audit Committee pursuant to the de minimis exception to the pre-approval requirement provided by paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
16C.3 Auditor’s term of office
French law provides that the statutory and alternate auditors are appointed for renewable 6 fiscal-year terms. The terms of office of the current statutory auditors and the alternate auditors will expire at the end of the Annual Shareholders’ Meeting called in 2022 to approve the financial statements for fiscal year 2021.
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
Total Number of Shares
Maximum Number of
(or Units) Purchased,
Shares (or Units) that
Total Number of
Average Price Paid
as part of Publicly
may yet be purchased
Shares (or Units)
Per Share (or Units)
Announced Plans or
under the Plans or
Period (in 2020)
Purchased
($)(a)
Programs(b)
Programs(c)
January
1,002,779
54.58
243,711,274
February
5,667,871
48.34
238,046,253
March
6,565,394
42.85
231,480,859
April
0
n.a.
231,482,747
May
June
232,799,435
July
240,898,441
August
240,898,821
September
240,899,626
October
240,914,296
November
240,914,646
December
240,919,699
ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
ITEM 16G. CORPORATE GOVERNANCE
This section presents a summary of significant differences between French corporate governance practices and the NYSE’s corporate governance standards, as required by section 303A.11 of the NYSE Listed Company Manual.
16G.1 Overview
The following paragraphs provide a brief, general summary of significant ways in which our corporate governance practices differ from those required by the listing standards of the New York Stock Exchange (“NYSE”) for U.S. companies that have common stock listed on the NYSE. While our management believes that our corporate governance practices are similar in many respects to those of U.S. domestic NYSE listed companies and provide investors with protections that are comparable in many respects to those established by the NYSE Listed Company Manual, certain significant differences are described below.
The principal sources of corporate governance standards in France are the French Commercial Code (Code de commerce), the French Financial and Monetary Code (Code monétaire et financier) and the regulations and recommendations provided by the French Financial Markets Authority (Autorité des marchés financiers, AMF), as well as a number of general recommendations and guidelines on corporate governance, most notably the Corporate Governance Code of Listed Corporations (the “AFEP-MEDEF Code”) published by the two main French business confederations, the Association Française des Entreprises Privées (AFEP) and the Mouvement des Entreprises de France (MEDEF), the latest version of which was published in January 2020.
The AFEP-MEDEF Code includes, among other things, recommendations relating to the role and operation of the board of directors (creation, composition and evaluation of the board of directors and the audit, compensation and nominations committees) and the independence criteria for board members. Articles L. 820-1 et seq. of the French Commercial Code authorizes statutory auditors to provide certain non-audit services if in compliance with provisions of the French Commercial Code, the European legislation and the Code of ethics of the auditors. It also defines certain criteria for the independence of statutory auditors. In France, the independence of statutory auditors is also monitored by an independent body, the High Council for statutory auditors (Haut Conseil du Commissariat aux Comptes).
For an overview of certain of our corporate governance policies, refer to points 4.1 and 4.2 of chapter 4 of the Universal Registration Document 2020 (starting on page 136), which are incorporated herein by reference.
16G.2 Composition of Board of Directors; Independence
The NYSE listing standards provide that the board of directors of a U.S.-listed company must include a majority of independent directors and that the audit committee, the nominating/corporate governance committee and the compensation committee must be composed entirely of independent directors. A director qualifies as independent only if the board affirmatively determines that the director has no material relationship with the company, either directly or as a partner, shareholder or officer of an organization that has a relationship with the company. Furthermore, as discussed below, the listing standards require additional procedures in regards to the independence of directors who sit on the audit committee and the compensation committee. In addition, the listing standards enumerate a number of relationships that preclude independence.
French law does not contain any independence requirement for the members of the board of directors of a French company, except for the audit committee, as described below. The AFEP-MEDEF Code recommends, however, that (i) the independent directors should account for half of the members of the board of directors of widely-held corporations without controlling shareholders, and (ii) independent directors should account for at least one-third of board members in controlled companies. Members of the board representing employees and employee shareholders are not taken into account in calculating these percentages. The AFEP-MEDEF Code states that a director is independent when “he or she has no relationship of any kind whatsoever with the corporation, its group or the management that may interfere with his or her freedom of judgment. Accordingly, an independent director is understood to be any non-executive director of the corporation or the group who has no particular bonds of interest (significant shareholder, employee, other) with them.” The AFEP-MEDEF Code also enumerates specific criteria for determining independence, which are on the whole consistent with the goals of the NYSE listing standards, although the specific tests under the two standards may vary on some points.
As noted in the AFEP-MEDEF Code, “qualification as an independent director should be discussed by the appointments committee […] and decided on by the board on the occasion of the appointment of a director, and annually for all directors.”
For an overview of the Company’s Board of Directors’ assessment of the independence of the Company’s Directors, including a description of the Board’s independence criteria, refer to point 4.1.1.4 of chapter 4 of the Universal Registration Document 2020 (starting on page 153), which is incorporated herein by reference.
16G.3 Representation of women on corporate boards
The French Commercial Code provides for legally binding quotas to balance gender representation on boards of directors of French listed companies, requiring that each gender represent at least 40%. Directors representing the employees and directors representing the employee shareholders are not taken into account in calculating this percentage. When the board of directors consists of a maximum of eight members, the difference between the number of directors of each gender should not be higher than two. Any appointment of a director made in violation of these rules will be declared null and void and payment of the directors’ compensation will be suspended until the board composition is compliant with the required quota (the suspension of the directors’ compensation will also be disclosed in the management report). However, if a director whose appointment is null and void takes part in decisions of the board of directors, such decisions are not declared automatically null and void by virtue thereof. As of March 17, 2021, the Company’s Board of Directors consisted of seven male members and six female members. Excluding the directors representing employees and the director representing employee shareholders in accordance with French law, the proportion of women on the Board was 50%.
16G.4 Board committees
16G.4.1 Overview
The NYSE listing standards require that a U.S.-listed company have an audit committee, a nominating/corporate governance committee and a compensation committee. Each of these committees must consist solely of independent directors and must have a written charter that addresses certain matters specified in the listing standards. Furthermore, the listing standards require that, in addition to the independence criteria referenced above under “Composition of Board of Directors; Independence”, certain enumerated factors be taken into consideration when making a determination on the independence of directors on the compensation committee or when engaging advisors to the compensation committee.
With the exception of an audit committee, as described below, French law currently requires neither the establishment of board committees nor the adoption of written charters.
The AFEP-MEDEF Code recommends, however, that the board of directors sets up, in addition to the audit committee required by French law, a nominations committee and a compensation committee. The AFEP-MEDEF Code also recommends that at least two-thirds of the audit committee members and a majority of the members of each of the compensation committee and the nominations committee be independent directors. It is recommended that the chairman of the compensation committee be independent and that one of its members be an employee director. None of those three committees should include any Executive Officer(32).
TOTAL has established an Audit Committee, a Governance and Ethics Committee, a Compensation Committee and a Strategy & CSR Committee. As of March 17, 2021, the composition of these Committees was as follows:
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For a description of the independence assessment of each member of the Board of Directors, see point 4.1.1.4 of chapter 4 of the Universal Registration Document 2020 (starting on page 153), which is incorporated herein by reference. For a description of the scope of each Committee’s activity, see point 4.1.2.3 of chapter 4 of the Universal Registration Document 2020 (starting on page 165), which is incorporated herein by reference.
The NYSE listing standards also require that the audit, nominating/corporate governance and compensation committees of a U.S.-listed company be vested with decision-making powers on certain matters. Under French law, however, those committees are advisory in nature and have no decision-making authority. Board committees are responsible for examining matters within the scope of their charter and making recommendations thereon to the board of directors. Under French law, the board of directors has the final decision-making authority.
16G.4.2 Audit Committee
The NYSE listing standards contain detailed requirements for the audit committees of U.S.-listed companies. Some, but not all, of these requirements also apply to non U.S.-listed companies, such as TOTAL. French law and the AFEP-MEDEF Code share the NYSE listing standards’ goal of establishing a system for overseeing the company’s accounting process that is independent from management and that ensures auditor independence. As a result, they address similar topics, with some overlap.
Article L. 823-19 of the French Commercial Code requires the board of directors of companies listed in France to establish an audit committee, at least one member of which must be an independent director and must be competent in finance, accounting or statutory audit procedures. The AFEP-MEDEF Code provides that at least two-thirds of the directors on the audit committee be independent and that the audit committee should not include any Executive Officer. Under NYSE rules, in the absence of an applicable exemption, audit committees are required to satisfy the independence requirements under Rule 10A-3 of the Exchange Act. TOTAL’s Audit Committee consists of four directors, all of whom meet the independence requirements under Rule 10A-3.
The duties of the Company’s Audit Committee, in line with French law and the AFEP-MEDEF Code, are described in point 4.1.2.3 of chapter 4 of the Universal Registration Document 2020 (starting on page 165), which is incorporated herein by reference. The Audit Committee regularly reports to the Board of Directors on the fulfillment of its tasks, the results of the financial statements certification process and the contribution of such process to guaranteeing the financial information’s integrity.
One structural difference between the legal status of the audit committee of a U.S.-listed company and that of a French-listed company concerns the degree of the committee’s involvement in managing the relationship between the company and the auditors. French law requires French companies that publish consolidated financial statements, such as TOTAL SE, to have two co-statutory auditors, while the NYSE listing standards require that the audit committee of a U.S.-listed have direct responsibility for the appointment, compensation, retention and oversight of the work of the auditor. French law provides that the election of the co-statutory auditors is the sole responsibility of the shareholders duly convened at a shareholders’ meeting. In making their decision, the shareholders may rely on proposals submitted to them by the board of directors based on recommendations from the audit committee. The shareholders elect the statutory auditors for an audit period of six financial years. The statutory auditors may only be revoked by a court order and only on grounds of professional negligence or incapacity to perform their mission.
16G.5 Meetings of non-management directors
The NYSE listing standards require that the non-management directors of a U.S.-listed company meet at regularly scheduled executive sessions without management. French law does not contain such a requirement. The AFEP-MEDEF Code recommends, however, that a meeting not attended by the Executive Officers be organized at least once a year.
Since December 16, 2015, the rules of procedure of the board of directors provide that, with the agreement of the Governance and Ethics Committee, the Lead Independent Director may hold meetings of the directors who do not hold executive or salaried positions on the Board of Directors. He or she reports to the Board of Directors on the conclusions of such meetings.
In December 2020, the Lead Independent Director held a meeting of the independent directors. She subsequently presented a summary of this meeting to the Board of Directors.
Thus, the Board of Directors’ practice is in line with the recommendation made in the AFEP-MEDEF Code.
29
16G.6 Shareholder approval of compensation
Pursuant to the provisions of the French Commercial Code, as amended, the compensation of the chairman of the board of directors, the members of the board of directors, the chief executive officer and, as the case may be, the deputy chief executive officer(s) in French listed companies shall each year be submitted to the approval of their shareholders. Articles L. 22-10-8 and L. 22-10-34 of the French Commercial Code (formerly Articles L. 225-37-2 and L. 225-100 as amended by the ordinance n°2019-1234 supplemented by the decree n° 2019-1235 each dated November 27, 2019) provide, respectively, for an ex ante vote and two ex post votes:
16G.7 Disclosure
The NYSE listing standards require US-listed companies to adopt, and post on their websites, a set of corporate governance guidelines. The guidelines must address, among other things: director qualification standards, director responsibilities, director access to management and independent advisers, director compensation, director orientation and continuing education, management succession and an annual performance evaluation of the board. In addition, the chief executive officer of a U.S.-listed company must certify to the NYSE annually that he or she is not aware of any violations by the company of the NYSE’s corporate governance listing standards.
French law requires neither the adoption of such guidelines nor the provision of such certification. The AFEP-MEDEF Code recommends, however, that the board of directors of a French-listed company review its operation annually and perform a formal evaluation at least once every three years, under the leadership of the appointments or nominations committee or an independent director, assisted by an external consultant. TOTAL’s Board of Directors’ most recent formal self-evaluation took place in early 2021. The AFEP-MEDEF Code also recommends that shareholders be informed of these evaluations each year in the annual report. In addition, Article L. 225-37 of the French Commercial Code requires the board of directors to present to the shareholders a corporate governance report appended to the management report, notably describing the composition of the board and the balanced representation of men and women on the board, the preparation and organization of the Board’s work, the offices and positions of each TOTAL Executive Officer and the compensation attributable and received by each such officer as well as the compensation attributable and received by the members of the board of directors. The AFEP-MEDEF Code also includes ethical rules concerning which directors are expected to comply.
16G.8 Code of business conduct and ethics
The NYSE listing standards require each U.S.-listed company to adopt, and post on its website, a code of business conduct and ethics for its directors, officers and employees. Under Article 17 of Law n° 2016/1691 of December 9, 2016, top management (such as the chairman of the board or chief executive officer) of large French companies is required to adopt a code of conduct proscribing the different types of behavior being likely to characterize acts of corruption, bribery or influence peddling. This code must be included in the rules of procedure of the company and be submitted to employee representatives. Under the SEC’s rules and regulations, all companies required to submit periodic reports to the SEC, including TOTAL, must disclose in their annual reports whether they have adopted a code of ethics for their principal executive officers and senior financial officers. In addition, they must file a copy of the code with the SEC, post the text of the code on their website or undertake to provide a copy upon request to any person without charge. There is significant, though not complete, overlap between the code of ethics required by the NYSE listing standards and the code of ethics for senior financial officers required by the SEC’s rules. For a description of the code of ethics adopted by TOTAL, refer to point 3.3.2 of chapter 3 of the Universal Registration Document 2020 (starting on page 101), which is incorporated herein by reference, and “Item 16B. Code of ethics”.
ITEM 16H. MINE SAFETY DISCLOSURE
ITEM 17. FINANCIAL STATEMENTS
ITEM 18. FINANCIAL STATEMENTS
The reports of the statutory auditors, ERNST & YOUNG Audit and KPMG Audit, a division of KPMG S.A., are included in pages F-1 to F-8 attached hereto.
ITEM 19. EXHIBITS
The following documents are filed as part of this annual report:
Articles of Associations (Statuts) of TOTAL SE (as amended through February 8, 2021).
The total amount of long-term debt securities authorized under any instrument does not exceed 10% of the total assets of the Company and its subsidiaries on a consolidated basis. We hereby agree to furnish to the SEC, upon its request, a copy of any instrument defining the rights of holders of long-term debt of the Company or of its subsidiaries for which consolidated or unconsolidated financial statements are required to be filed.
2.2
Description of securities registered under section 12 of the Exchange Act.
List of Subsidiaries (see Note 18 to the Consolidated Financial Statements, starting on page F-92).
Code of Ethics (incorporated by reference to exhibit 11 of the Company’s annual report on Form 20-F for the year ended December 31, 2016, filed on March 17, 2017).
12.1
Certification of Chief Executive Officer.
12.2
Certification of Chief Financial Officer.
13.1
13.2
15.1
Excerpt of the pages and sections of the Universal Registration Document 2020 incorporated herein by reference.
15.2
Consent of ERNST & YOUNG Audit and of KPMG Audit, a division of KPMG S.A.
15.3
Third party report of DeGolyer and MacNaughton.
15.4
Consent of DeGolyer and MacNaughton.
101.INS
Inline XBRL Instance Document.
101.SCH
Inline XBRL Taxonomy Extension Schema Document.
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104
Cover Page Interactive Data File (formatted as Inline XBRL and included in Exhibit 101).
SIGNATURE
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.
By: /s/ PATRICK POUYANNÉ
Name:
Patrick Pouyanné
Title:
Chairman and Chief Executive Officer
Date: March 31, 2021
Report of independent registered public accounting firms on the internal control over financial reporting
F-2
Report of independent registered public accounting firms on the consolidated financial statements
F-4
Consolidated statement of income
F-9
Consolidated statement of comprehensive income
F-10
Consolidated balance sheet
F-11
Consolidated statement of cash flow
F-12
Consolidated statement of changes in shareholder’s equity
F-13
Notes to the Consolidated Financial Statements
F-14
F-1
KPMG Audit
A division of KPMG S.A.
Tour EQHO
2 Avenue Gambetta
CS 60055
92066 Paris-la Défense Cedex
ERNST & YOUNG Audit
1/2, place des Saisons
92400 Courbevoie - Paris-La Défense 1
S.A.S. à capital variable
Registered office: 2, place Jean Millier - La Défense 6 - 92400 Courbevoie - France
Report of Independent Registered Public Accounting Firms on the Internal Control Over Financial Reporting
To the Shareholders and Board of Directors,
Opinion on Internal Control Over Financial Reporting
We have audited TOTAL SE and subsidiaries’ (“the Group”) internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Group maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Group as of December 31, 2020, 2019, and 2018, the related consolidated statements of income, comprehensive income, changes in shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2020 and the related notes (collectively, “the consolidated financial statements”), and our report dated March 17, 2021 expressed an unqualified opinion on those consolidated financial statements.
Basis for Opinion
The Group’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Group’s internal control over financial reporting based on our audit. We are public accounting firms registered with the PCAOB and are required to be independent with respect to the Group in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Paris La Défense, March 17, 2021
KPMG Audit, a division of KPMG S.A.
/s/ JACQUES-FRANÇOIS LETHU
/s/ ERIC JACQUET
/s/ ERNST & YOUNG Audit
Jacques-François Lethu
Eric Jacquet
Partner
F-3
Report of Independent Registered Public Accounting Firms on the Consolidated Financial Statements
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of TOTAL SE and subsidiaries (“the Group”) as of December 31, 2020, 2019 and 2018, the related consolidated statements of income, comprehensive income, changes in shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2020, and the related notes (collectively, “the consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Group as of December 31, 2020, 2019 and 2018, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2020, in conformity with International Financial Reporting Standards as adopted by the European Union and in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Group’s internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated March 17, 2021 expressed an unqualified opinion on the effectiveness of the Group’s internal control over financial reporting.
Change in Accounting Principle
As discussed in Note 13.2 “Lease contracts” to the consolidated financial statements, the Group has changed its method of accounting for leases on January 1, 2019, due to the adoption of IFRS 16 “Leases”.
Report of Independent Registered Public Accounting
Firms on the Consolidated Financial Statements
March 17, 2021
These consolidated financial statements are the responsibility of the Group’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are public accounting firms registered with the PCAOB and are required to be independent with respect to the Group in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The Critical Audit Matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the Audit Committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of Critical Audit Matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the Critical Audit Matters below, providing separate opinions on the Critical Audit Matters or on the accounts or disclosures to which they relate.
Evaluation of the impairment of non-current assets of exploration and production activities of the Exploration & Production and Integrated Gas, Renewables and Power segments (“E&P and iGRP segments”)
Description of the Matter
As discussed in Notes 7.1, 7.2, and 3 to the consolidated financial statements as of December 31, 2020, the non-current assets of exploration and production activities of the E&P and iGRP segments are mainly comprised of proved and unproved properties and work in progress of exploration and production activities (83,700 million US dollars), proved mineral interests (6,964 million US dollars), unproved mineral interests (15,510 million US dollars), and a portion of the 23,783 million US dollars balance of investments and loans in equity affiliates.
The Group performs impairment tests on these assets as soon as any indication of impairment exists. As described in Note “Major judgments and accounting estimates” and Note 3.D “Asset impairment” to the consolidated financial statements, in 2020, in the context of the health crisis, the Group decided to revise the price assumptions used for its assets impairment tests. In addition, in line with its new Climate Ambition announced on May 5, 2020, which aims at carbon neutrality, the Group has reviewed its oil assets that can be qualified as “stranded”, meaning with reserves beyond 20 years and high production costs, whose overall reserves may therefore not be produced by 2050. In 2020, asset
F-5
impairments were recorded for an amount of 8,646 million US dollars in operating income and 8,157 million US dollars in net income, Group share.
The testing method is described in Note 3.D to the consolidated financial statements. The Group assesses the recoverable amount of the E&P and iGRP segments’ non-current assets of exploration and production activities based on the cash-generating units (CGU) that include all the hydrocarbon sites and industrial assets involved in the production, processing and extraction of hydrocarbons. The recoverable amount is measured for each CGU, taking into account the economic business environment and the Group’s operating plans. The primary assumptions used by the Group to measure the recoverable amount include the future price of hydrocarbons, the future operational costs, oil and gas reserves, and the after-tax discount rate.
We identified the evaluation of the impairment of the E&P and iGRP segments’ non-current assets of exploration and production activities as a critical audit matter because evaluating the Group’s assumptions discussed above involved a high degree of subjective auditor judgment. Specifically, such evaluation required the consideration of evidence that corroborates the Group’s assumptions and evidence that might contradict the assumptions, such as publicly available industry information.
How We Addressed the Matter in Our Audit
The primary procedures we performed to address this critical audit matter included the following. We obtained an understanding, evaluated the design, and tested the operating effectiveness of certain controls over the Group’s processes to address the risks of material misstatement relating to the evaluation of the impairment of the E&P and iGRP segments’ non-current assets of exploration and production activities. This included testing certain controls over the Group’s determination of the primary assumptions underlying the recoverable amount, such as the estimates of the future price of hydrocarbons, the future operational costs, oil and gas reserves, and the after-tax discount rate.
We considered whether there was an indication of impairment for these assets, such as an expected severe decline of production, a new tax law enacted, an expected impact of new price assumptions, or the Group’s new Climate Ambition. We compared the primary assumptions to those included in analyses, and to budgets and forecasts approved by the Executive Committee and the Board of Directors. We also compared the hydrocarbon pricing scenarios used by the Group as prepared by the Strategy and Climate division to publicly available industry information (International Energy Agency, brokers, and consultants). We analyzed the future operational costs by calculating ratios over production and comparing them over time or to those of other similar assets. We agreed oil production profiles to the proved and probable hydrocarbon reserves established as part of the Group’s internal procedures. With the assistance of valuation specialists included in our audit teams, we performed a re-calculation of the after-tax discount rate used by management, which we compared with the rates calculated by major market financial analysts. We assessed the consistency of the tax rates used by management with the applicable tax schemes and the oil agreements in force. We analyzed the information disclosed in Note 3.D ”Asset impairment” to the consolidated financial statements. In particular, we analyzed the Company’s sensitivity analysis on operating income and net income to variations of the hydrocarbon pricing scenarios, and compared it to information disclosed in this Note.
F-6
Effect of estimated proved and proved developed hydrocarbon reserves on the depreciation of oil and gas assets of production activities of the Exploration & Production and Integrated Gas, Renewables and Power segments (“E&P and iGRP segments”)
As discussed in the Note “Major judgments and accounting estimates” to the consolidated financial statements, the proved and proved developed hydrocarbon reserves are used by the Group in the successful efforts method to account for its oil and gas activities. Notes 7.1 and 7.2 to the consolidated financial statements outline that under such method, oil and gas assets are depreciated using the unit-of-production method. The unit-of-production method is based on either proved hydrocarbon reserves or proved developed hydrocarbon reserves. Those reserves are estimated by the Group’s petroleum engineers in accordance with industry practice and Securities and Exchange Commission (SEC) regulations.
As described in Note 7.2 “Property, plant and equipment” to the consolidated financial statements, in the event that, due to the price effect on the hydrocarbon reserves evaluation, the unit-of-production depreciation method does not reflect properly the useful life of the asset, an alternative depreciation method is applied based on the reserves evaluated using the 12-month average price of the previous year. This is the case in 2020 where the unit-of-production depreciation method is applied to all assets in 2020 based on proved hydrocarbon reserves or proved developed hydrocarbon reserves measured using the 12-month average price for 2019.
The primary assumptions used by the Group to estimate the proved and proved developed hydrocarbon reserves for purposes of the depreciation of oil and gas assets of production activities of the E&P and iGRP segments for the year ended December 31, 2020 include the following: geoscience and engineering data used to determine deposit quantities; contractual arrangements that determine the Group’s share of the reserves; and the price.
We identified the effect of estimated proved and proved developed hydrocarbon reserves on the depreciation of oil and gas assets of production activities of the E&P and iGRP segments as a critical audit matter because evaluating the Group’s aforementioned assumptions involved a high degree of complex auditor judgment due to the inherent uncertainty and nature of such assumptions.
The primary procedures we performed to address this critical audit matter included the following. We obtained an understanding, evaluated the design, and tested the operating effectiveness of certain controls over the Group’s processes to address the risks of material misstatement in the depreciation of oil and gas assets of production activities of the E&P and iGRP segments relating to the effect of estimated proved and proved developed hydrocarbon reserves. This included testing certain controls over management’s determination and evaluation of deposit quantities and the modeling of contractual arrangements that determine the Group’s share of proved and proved developed hydrocarbon reserves.
We assessed the qualifications and objectivity of the Group’s petroleum engineers responsible for estimating reserves and analyzed the main changes in proved and proved developed hydrocarbon reserves compared to the prior fiscal year. We compared the 2020 forecasted production to 2020 actual production. We inspected evidence from contractual arrangements that determine the Group’s share of the proved and proved developed hydrocarbon reserves through the expiration of the
F-7
contracts. We evaluated the Group’s assessment, where appropriate, of the reasons leading the Group to believe that the renewal of contractual arrangements is reasonably certain. We evaluated the analysis performed by the Group to determine that using the 12-month average price of 2020 to estimate the proved and proved developed hydrocarbon reserves for purposes of the depreciation of oil and gas assets of production activities of the E&P and iGRP segments would not properly reflect the anticipated useful life of these assets. We analyzed the Group’s use of the 12-month average price for 2019 by comparing such average price to the Group’s average long-term view of prices. We assessed the Group’s methodology used to estimate these proved and proved developed hydrocarbon reserves, considering SEC’s regulations and the 12-month average price for 2019.
Jacques-François LethuPartner
Eric JacquetPartner
We or our predecessor firms have served asthe Group’s auditor since 1996.
We have served as theGroup’s auditor since 2004.
F-8
Consolidated Financial Statements
For the year ended December 31, (M$)(a)
Sales
(Notes 3, 4, 5)
Excise taxes
(Notes 3 & 5)
(20,981)
(24,067)
(25,257)
Purchases, net of inventory variation
(Note 5)
(77,486)
(116,221)
(125,816)
Other operating expenses
(25,538)
(27,255)
(27,484)
Exploration costs
(731)
(785)
(797)
Depreciation, depletion and impairment of tangible assets and mineral interests
(22,264)
(15,731)
(13,992)
Other income
(Note 6)
2,237
1,163
1,838
Other expense
(1,506)
(1,192)
(1,273)
Financial interest on debt
(2,147)
(2,333)
(1,933)
Financial income and expense from cash & cash equivalents
(19)
(188)
Cost of net debt
(Note 15)
(2,110)
(2,352)
(2,121)
Other financial income
914
792
1,120
Other financial expense
(690)
(764)
(685)
(Note 8)
Income taxes
(Note 11)
(318)
(5,872)
(6,516)
CONSOLIDATED NET INCOME
(7,336)
11,438
11,550
Group share
(94)
171
4.20
4.27
For the year ended December 31, (M$)
Consolidated net income
Other comprehensive income
Actuarial gains and losses
(Note 10)
(212)
(192)
(12)
Change in fair value of investments in equity instruments
533
142
Tax effect
65
53
Currency translation adjustment generated by the parent company
(Note 9)
7,541
(1,533)
(4,022)
Items not potentially reclassifiable to profit and loss
7,927
(1,530)
(4,021)
Currency translation adjustment
(4,645)
740
1,113
Cash flow hedge
(Notes 15 & 16)
(313)
(599)
Variation of foreign currency basis spread
(80)
Share of other comprehensive income of equity affiliates, net amount
(1,831)
408
(540)
Other
(8)
(3)
(5)
72
202
Items potentially reclassifiable to profit and loss
(6,697)
749
527
Total other comprehensive income (net amount)
1,230
(781)
(3,494)
COMPREHENSIVE INCOME
(6,106)
10,657
8,056
- Group share
(6,312)
10,418
8,021
- Non-controlling interests
206
239
35
ASSETS
As of December 31, (M$)
Non-current assets
Intangible assets, net
(Notes 4 & 7)
33,528
33,178
28,922
Property, plant and equipment, net
108,335
116,408
113,324
Equity affiliates: investments and loans
27,976
27,122
23,444
Other investments
2,007
1,421
Non-current financial assets
4,781
912
680
Deferred income taxes
7,016
6,216
6,663
Other non-current assets
2,810
2,415
2,509
Total non-current assets
186,453
188,029
176,963
Current assets
Inventories, net
14,730
17,132
14,880
Accounts receivable, net
14,068
18,488
17,270
Other current assets
13,428
17,013
14,724
Current financial assets
4,630
3,992
3,654
Cash and cash equivalents
Assets classified as held for sale
(Note 2)
1,288
1,364
Total current assets
79,679
85,265
79,799
TOTAL ASSETS
LIABILITIES & SHAREHOLDERS’ EQUITY
Shareholders’ equity
Common shares
Paid-in surplus and retained earnings
107,078
121,170
120,569
(10,256)
(11,503)
(11,313)
Treasury shares
(1,387)
(1,012)
(1,843)
Total shareholders' equity - Group share
Total shareholders' equity
106,085
119,305
118,114
Non-current liabilities
10,326
11,858
11,490
Employee benefits
3,917
3,501
3,363
Provisions and other non-current liabilities
(Note 12)
20,925
20,613
21,432
Total non-current liabilities
95,371
83,745
76,414
Current liabilities
Accounts payable
23,574
28,394
26,134
Other creditors and accrued liabilities
22,465
25,749
22,246
Current borrowings
17,099
14,819
13,306
Other current financial liabilities
203
478
Liabilities directly associated with the assets classified as held for sale
1,335
795
70
Total current liabilities
64,676
70,244
62,234
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY
CASH FLOW FROM OPERATING ACTIVITIES
Depreciation, depletion, amortization and impairment
(Note 5.3)
22,861
16,401
14,584
Non-current liabilities, valuation allowances, and deferred taxes
(Note 5.5)
(1,782)
(58)
(887)
(Gains) losses on disposals of assets
(909)
(614)
(930)
Undistributed affiliates’ equity earnings
948
(1,083)
(826)
(Increase) decrease in working capital
Other changes, net
(848)
319
443
CASH FLOW USED IN INVESTING ACTIVITIES
Intangible assets and property, plant and equipment additions
(Note 7)
(10,764)
(11,810)
(17,080)
Acquisitions of subsidiaries, net of cash acquired
(966)
(4,748)
(3,379)
Investments in equity affiliates and other securities
(2,120)
(1,618)
(1,108)
Increase in non-current loans
(1,684)
(1,061)
(618)
Proceeds from disposals of intangible assets and property, plant and equipment
3,716
Proceeds from disposals of subsidiaries, net of cash sold
282
158
Proceeds from disposals of non-current investments
578
349
1,444
Repayment of non-current loans
855
1,026
2,067
CASH FLOW FROM FINANCING ACTIVITIES
Issuance (repayment) of shares:
– Parent company shareholders
374
498
– Treasury shares
(611)
(2,810)
(4,328)
Dividends paid:
(6,688)
(6,641)
(4,913)
– Non-controlling interests
(184)
(115)
(97)
Net issuance of perpetual subordinated notes
331
Payments on perpetual subordinated notes
(315)
(371)
(325)
Other transactions with non-controlling interests
(204)
(622)
Net issuance (repayment) of non-current debt
15,800
8,131
649
Increase (decrease) in current borrowings
(6,501)
(5,829)
(3,990)
Increase (decrease) in current financial assets and liabilities
(604)
(536)
Cash flow from / (used in) financing activities
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD
Consolidated statement of changes in shareholders’ equity
Paid-in
surplus and
Currency
Shareholders’
Non-
Common shares issued
retained
translation
equity -
controlling
shareholders’
Number
Amount
earnings
adjustment
interests
equity
As of January 1, 2018
2,528,989,616
112,040
(7,908)
(8,376,756)
(458)
114,037
Net income 2018
(20)
(3,405)
(3,425)
(69)
Comprehensive income
11,426
Dividend
(7,881)
(7,978)
Issuance of common shares
156,203,090
476
8,366
8,842
Purchase of treasury shares
(72,766,481)
Sale of treasury shares(a)
(240)
4,079,257
240
Share-based payments
294
Share cancellation
(44,590,699)
(131)
(2,572)
44,590,699
2,703
Net issuance (repayment) of perpetual subordinated notes
Other operations with non-controlling interests
(517)
(99)
(616)
Other items
(32)
154
122
As of December 31, 2018
2,640,602,007
(32,473,281)
Net income 2019
(659)
(190)
(849)
68
10,608
(7,730)
(7,845)
26,388,503
74
1,265
1,339
(52,389,336)
(219)
4,278,948
219
207
(65,109,435)
(178)
(3,244)
65,109,435
3,422
(4)
(353)
55
(42)
(29)
(13)
As of December 31, 2019
2,601,881,075
(15,474,234)
Net income 2020
(321)
1,251
930
300
(7,563)
(7,899)
(234)
(8,133)
51,242,950
144
1,470
1,614
(13,236,044)
(236)
4,317,575
236
188
(308)
(61)
(65)
(117)
(182)
(14)
AS OF DECEMBER 31, 2020
2,653,124,025
(24,392,703)
Changes in equity are detailed in Note 9.
Basis of preparation of the consolidated financial statements
Major judgments and accounting estimates
Judgments in case of transactions not addressed by any accounting standard or interpretation
NOTE 1 General accounting policies
NOTE 2 Changes in the Group structure
NOTE 3 Business segment information
NOTE 4 Segment information by geographical area
NOTE 5 Main items related to operating activities
NOTE 6 Other items from operating activities
NOTE 7 Intangible and tangible assets
NOTE 8 Equity affiliates, other investments and related parties
42
NOTE 9 Shareholders’ equity and share-based payments
47
NOTE 10 Payroll, staff and employee benefits obligations
57
NOTE 11 Income taxes
60
NOTE 12 Provisions and other non-current liabilities
62
NOTE 13 Off balance sheet commitments and lease contracts
64
NOTE 14 Financial assets and liabilities analysis per instrument class and strategy
NOTE 15 Financial structure and financial costs
NOTE 16 Financial instruments related to commodity contracts
88
NOTE 17 Post closing events
91
NOTE 18 Consolidation scope
92
Note 1
On February 8, 2021, the Board of Directors established and authorized the publication of the Consolidated Financial Statements of TOTAL SE for the year ended December 31, 2020, which will be submitted for approval to the Shareholders’ Meeting to be held on May 28, 2021.
The Consolidated Financial Statements of TOTAL SE and its subsidiaries (the Group) are presented in U.S. dollars and have been prepared on the basis of IFRS (International Financial Reporting Standards) as adopted by the European Union and IFRS as issued by the IASB (International Accounting Standard Board) as of December 31, 2020.
The accounting principles applied for the consolidated financial statements at December 31, 2020, were the same as those that were used for the financial statements at December 31, 2019, with the exception of the IFRS standard changes listed below which had not been early adopted by the Group.
As of January 1st, 2020, the Group early adopted the amendments to IFRS 7 and IFRS 9 relating to the interest rate benchmark reform phase II. In particular, these amendments allow to maintain the hedge accounting qualification of interest rate derivatives.
As part of this transition, the Group set up a working group in order to cover all aspects relating to the IBOR reform and is currently assessing the future impacts of these index changes.
As of December 31, 2020, except for the index change on the remuneration of cash collateral with the clearing houses, whose impact is not material, no modification of the IBOR indexes was applied on the financial instruments used by the Group.
The preparation of financial statements in accordance with IFRS for the closing as of December 31, 2020 requires the executive management to make estimates, assumptions and judgments that affect the information reported in the Consolidated Financial Statements and the Notes thereto.
These estimates, assumptions and judgments are based on historical experience and other factors believed to be reasonable at the date of preparation of the financial statements. They are reviewed on an on-going basis by management and therefore could be revised as circumstances change or as a result of new information.
Different estimates, assumptions and judgments could significantly affect the information reported, and actual results may differ from the amounts included in the Consolidated Financial Statements and the Notes thereto.
The following summary provides further information about the key estimates, assumptions and judgments that are involved in preparing, the Consolidated Financial Statements and the Notes thereto. It should be read in conjunction with the sections of the Notes mentioned in the summary.
The consolidated financial statements are impacted by the health and oil crises. The Group has taken into account the impact of this environment, particularly on the depreciation and impairment of oil and gas assets (see Note 3.D “Asset impairment” and Note 7.2 “Tangible assets”).
Estimation of hydrocarbon reserves
The estimation of oil and gas reserves is a key factor in the Successful Efforts method used by the Group to account for its oil and gas activities.
The Group’s oil and gas reserves are estimated by the Group’s petroleum engineers in accordance with industry standards and SEC (U.S. Securities and Exchange Commission) regulations.
Proved oil and gas reserves are those quantities of oil and gas, which, by analysis of geosciences and engineering data, can be determined with reasonable certainty to be recoverable (from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations), prior to the time at which contracts providing the rights to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation.
Proved oil and gas reserves are calculated using a 12-month average price determined as the unweighted arithmetic average of the first-day-of-the-month price for each month of the relevant year unless prices are defined by contractual arrangements, excluding escalations based upon future conditions. The Group reassesses its oil and gas reserves at least once a year on all its properties.
The Successful Efforts method and the mineral interests and property, plant and equipment of exploration and production are presented in Note 7 “Intangible and tangible assets”.
Impairment of property, plant and equipment, intangible assets and goodwill
As part of the determination of the recoverable value of assets for impairment (IAS36), the estimates, assumptions and judgments mainly concern hydrocarbon prices scenarios, operating costs, production volumes and oil and gas proved and probable reserves, refining margins and product marketing conditions (mainly petroleum, petrochemical and chemical products as well as renewable industry products). The estimates and assumptions used by the executive management are determined in specialized internal departments in light of economic conditions and external expert analysis. The discount rate is reviewed annually.
F-15
In 2020, the Group decided to revise the price assumptions used for its assets impairment tests. Based on these new assumptions, asset impairments were recorded during the period. In line with its new Climate Ambition announced on May 5, 2020, which aims at carbon neutrality, the Group has reviewed its oil assets that can be qualified as “stranded”, and therefore has decided to impair its oil sands assets in Canada. These impairments and revised assumptions are presented in Note 3.D “Asset impairment”.
Impairment of assets and the method applied are described in Note 3 "Business segment information".
The benefit obligations and plan assets can be subject to significant volatility due in part to changes in market values and actuarial assumptions. These assumptions vary between different pension plans and thus take into account local conditions. They are determined following a formal process involving expertise and Group internal judgments, in financial and actuarial terms, and also in consultation with actuaries and independent experts.
The assumptions for each plan are reviewed annually and adjusted if necessary to reflect changes from the experience and actuarial advice. The discount rate is reviewed quarterly.
Payroll, staff and employee benefits obligations and the method applied are described in Note 10 “Payroll, staff and employee benefits obligations”.
Asset retirement obligations
Asset retirement obligations, which result from a legal or constructive obligation, are recognized based on a reasonable estimate in the period in which the obligation arises.
This estimate is based on information available in terms of costs and work program. It is regularly reviewed to take into account the changes in laws and regulations, the estimates of reserves and production, the analysis of site conditions and technologies.
The discount rate is reviewed annually.
Asset retirement obligations and the method used are described in Note 12 “Provisions and other non-current liabilities”.
Income Taxes
A tax liability is recognized when in application of a tax regulation, a future payment is considered probable and can be reasonably estimated. The exercise of judgment is required to assess the impact of new events on the amount of the liability.
Deferred tax assets are recognized in the accounts to the extent that their recovery is considered probable. The amount of these assets is determined after taking into account deferred tax liabilities with comparable maturity, arising from the same entities and tax regimes. It takes into account existing taxable profits and future taxable profits which estimation is inherently uncertain and subject to change over time. The exercise of judgment is required to assess the impact of new events on the value of these assets and including changes in estimates of future taxable profits and the deadlines for their use.
In addition, these tax positions may depend on interpretations of tax laws and regulations in the countries where the Group operates. These interpretations may have uncertain nature. Depending on the circumstances, they are final only after negotiations or resolution of disputes with authorities that can last several years.
Incomes taxes and the accounting methods are described in Note 11 “Income taxes”.
Furthermore, when the accounting treatment of a specific transaction is not addressed by any accounting standard or interpretation, the management applies its judgment to define and apply accounting policies that provide information consistent with the general IFRS concepts: faithful representation, relevance and materiality.
F-16
1.1 Accounting policies
A) Principles of consolidation
Entities that are directly controlled by the parent company or indirectly controlled by other consolidated entities are fully consolidated.
Investments in joint ventures are consolidated under the equity method. The Group accounts for joint operations by recognizing its share of assets, liabilities, income and expenses.
Investments in associates, in which the Group has significant influence, are accounted for by the equity method. Significant influence is presumed when the Group holds, directly or indirectly (e.g. through subsidiaries), 20% or more of the voting rights. Companies in which ownership interest is less than 20%, but over which the Company is deemed to exercise significant influence, are also accounted for by the equity method.
All internal balances, transactions and income are eliminated.
B) Business combinations
Business combinations are accounted for using the acquisition method. This method requires the recognition of the acquired identifiable assets and assumed liabilities of the companies acquired by the Group at their fair value.
The purchase accounting of the acquisition is finalized up to a maximum of one year from the acquisition date.
The acquirer shall recognize goodwill at the acquisition date, being the excess of:
If the consideration transferred is lower than the fair value of acquired identifiable assets and assumed liabilities, an additional analysis is performed on the identification and valuation of the identifiable elements of the assets and liabilities. After having completed such additional analysis, any negative goodwill is recorded as income.
Non-controlling interests are measured either at their proportionate share in the net assets of the acquired company or at fair value.
In transactions with non-controlling interests, the difference between the price paid (received) and the book value of non-controlling interests acquired (sold) is recognized directly in equity.
C) Foreign currency translation
The presentation currency of the Group's Consolidated Financial Statements is the US dollar. However, the functional currency of the parent company is the euro. The resulting currency translation adjustments are presented on the line "currency translation adjustment generated by the parent company" of the consolidated statement of comprehensive income, within "items not potentially reclassifiable to profit and loss". In the balance sheet, they are recorded in "currency translation adjustment".
The financial statements of subsidiaries are prepared in the currency that most clearly reflects their business environment. This is referred to as their functional currency.
Since 1st July 2018, Argentina is considered to be hyperinflationary. IAS 29 "Financial Reporting in Hyperinflationary Economies" is applicable to entities whose functional currency is the Argentine peso. The functional currency of the Argentine Exploration & Production subsidiary is the US dollar, therefore IAS 29 has no incidence on the Group accounts. Net asset of the other business segments is not significant.
(i) Monetary transactions
Transactions denominated in currencies other than the functional currency of the entity are translated at the exchange rate on the transaction date. 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.
(ii) Translation of financial statements
Assets and liabilities of entities denominated in currencies other than dollar are translated into dollar on the basis of the exchange rates at the end of the period. The income and cash flow statements are translated using the average exchange rates for the period. Foreign exchange differences resulting from such translations are either recorded in shareholders’ equity under “Currency translation adjustments” (for the Group share) or under “Non-controlling interests” (for the share of non-controlling interests) as deemed appropriate.
1.2 Significant accounting policies applicable in the future
The expected impact of the standards or interpretations published respectively by the International Accounting Standards Board (IASB) and the International Financial Reporting Standards Interpretations Committee (IFRS IC) which were not yet in effect at December 31, 2020, is not material.
F-17
Note 2
2.1 Main acquisitions and divestments
In 2020, the main changes in the Group structure were as follows:
Integrated Gas, Renewables & Power
Exploration & Production
2.2 Major business combinations
Accounting principles
In accordance with IFRS 3 “Business combinations”, TOTAL is assessing the fair value of identifiable acquired assets, liabilities and contingent liabilities on the basis of available information. This assessment will be finalised within 12 months following the acquisition date.
EDP Comercializadora Espagne
In the accounts as at December 31, 2020, the fair value of the identifiable acquired assets and the liabilities assumed amounts to $233 million.
The preliminary purchase price allocation is shown below:
At the acquisition date
Goodwill
345
Intangible assets
56
Tangible assets
235
Other assets and liabilities
Debt net of cash acquired
FAIR VALUE OF CONSIDERATION
2.3 Divestment projects
Pursuant to IFRS 5 "Non-current assets held for sale and discontinued operations”, assets and liabilities of affiliates that are held for sale are presented separately on the face of the balance sheet. Depreciation of assets ceases from the date of classification in “Non-current assets held for sale”.
F-18
Note 3
Refining & Chemicals
Description of the business segments
Financial information by business segment is reported in accordance with the internal reporting system and shows internal segment information that is used to manage and measure the performance of TOTAL and which is reviewed by the main operational decision-making body of the Group, namely the Executive Committee.
The operational profit and assets are broken down by business segment prior to the consolidation and inter-segment adjustments.
Sales prices between business segments approximate market prices.
The profitable growth in the gas and low carbon electricity integrated value chains is one of the key axes of TOTAL’s strategy. In order to give more visibility to these businesses, a new reporting structure for the business segments’ financial information has been put in place, effective January 1, 2019.
The organization of the Group's activities is structured around the four followings segments:
In addition, the Corporate segment includes holdings operating and financial activities.
Certain figures for the year 2018 have been restated in order to reflect the new organization.
Definition of the indicators
(i) Operating income (measure used to evaluate operating performance)
Revenue from sales after deducting cost of goods sold and inventory variations, other operating expenses, exploration expenses and depreciation, depletion, and impairment of tangible assets and mineral interests.
Operating income excludes the amortization of intangible assets other than mineral interests, currency translation adjustments and gains or losses on the disposal of assets.
(ii) Net operating income (measure used to evaluate the return on capital employed)
Operating income after taking into account the amortization of intangible assets other than mineral interests, currency translation adjustments, gains or losses on the disposal of assets, as well as all other income and expenses related to capital employed (dividends from non-consolidated companies, income from equity affiliates, capitalized interest expenses…), and after income taxes applicable to the above.
The only income and expense not included in net operating income but included in net income Group share are interest expenses related to net financial debt, after applicable income taxes (net cost of net debt) and non-controlling interests.
(iii) Adjusted income
Operating income, net operating income, or net income excluding the effect of adjustment items described below.
(iv) Capital employed
Non-current assets and working capital, at replacement cost, net of deferred income taxes and non-current liabilities.
(v) ROACE (Return on Average Capital Employed)
Ratio of adjusted net operating income to average capital employed between the beginning and the end of the period.
Performance indicators excluding the adjustment items, such as adjusted incomes and ROACE are meant to facilitate the analysis of the financial performance and the comparison of income between periods.
F-19
Adjustment items
Adjustment items include:
(i) Special items
Due to their unusual nature or particular significance, certain transactions qualified as “special items” are excluded from the business segment figures. In general, special items relate to transactions that are significant, infrequent or unusual. However, in certain instances, transactions such as restructuring costs or assets disposals, which are not considered to be representative of the normal course of business, may be qualified as special items although they may have occurred within prior years or are likely to occur again within the coming years.
(ii) The inventory valuation effect
The adjusted results of the Refining & Chemicals and Marketing & Services segments are presented according to the replacement cost method. This method is used to assess the segments’ performance and facilitate the comparability of the segments’ performance with those of its main competitors.
In the replacement cost method, which approximates the LIFO (Last-In, First-Out) method, the variation of inventory values in the statement of income is, depending on the nature of the inventory, determined using either the month-end prices differential between one period and another or the average prices of the period rather than the historical value. The inventory valuation effect is the difference between the results according to the FIFO (First-In, First-Out) and the replacement cost methods.
(iii) Effect of changes in fair value
The effect of changes in fair value presented as adjustment items reflects for certain transactions differences between the internal measure of performance used by TOTAL’s executive committee and the accounting for these transactions under IFRS.
IFRS requires that trading inventories be recorded at their fair value using period end spot prices. In order to best reflect the management of economic exposure through derivative transactions, internal indicators used to measure performance include valuations of trading inventories based on forward prices.
TOTAL, in its trading activities, enters into storage contracts, which future effects are recorded at fair value in the Group’s internal economic performance. IFRS precludes recognition of this fair value effect.
Furthermore, TOTAL enters into derivative instruments to risk manage certain operational contracts or assets. Under IFRS, these derivatives are recorded at fair value while the underlying operational transactions are recorded as they occur. Internal indicators defer the fair value on derivatives to match with the transaction occurrence.
The adjusted results (adjusted operating income, adjusted net operating income, adjusted net income) are defined as replacement cost results, adjusted for special items and the effect of changes in fair value.
A) Information by business segment
Integrated
Gas,
For the year ended December 31, 2020
Exploration &
Renewables
Refining &
Marketing &
Production
& Power
Chemicals
Services
Corporate
Intercompany
—
Intersegment sales
18,483
2,003
17,378
357
223
(38,444)
(2,405)
(18,576)
23,456
17,632
71,588
45,232
Operating expenses
(11,972)
(15,847)
(70,524)
(42,807)
(1,049)
38,444
(103,755)
(16,998)
(2,312)
(1,878)
(984)
(92)
Operating income
(901)
(6,315)
272
1,407
(67)
(660)
Net operating income
(696)
(5,568)
Net cost of net debt
(1,768)
94
NET INCOME - GROUP SHARE
F-20
(adjustments)(a)
(137)
(423)
(1,552)
(330)
(60)
(2,502)
(7,693)
(953)
(306)
(8,952)
Operating income(b)
(7,830)
(1,356)
(1,858)
(11,434)
54
(382)
(677)
(24)
107
(922)
388
298
348
93
(145)
982
Net operating income(b)
(7,388)
(1,440)
(2,187)
(261)
(98)
(11,374)
102
(11,301)
(a) Adjustments include special items, inventory valuation effect and the effect of changes in fair value.
(b) Of which inventory valuation effect
On operating income
(1,244)
(196)
On net operating income
(1,165)
(adjusted)
15,609
140,665
17,612
119,684
(11,835)
(15,424)
(68,972)
(42,477)
(989)
(101,253)
(9,305)
(1,359)
(1,572)
(13,312)
Adjusted operating income
2,316
829
1,044
1,771
(841)
5,119
643
1,176
284
61
165
2,329
(596)
(227)
(289)
(608)
78
(1,642)
Adjusted net operating income
5,806
(1,739)
ADJUSTED NET INCOME - GROUP SHARE
4,059
6,782
6,230
1,325
1,052
145
819
1,152
149
177
9,922
2,129
2,438
2,101
(1,787)
Balance sheet as of December 31, 2020
Property, plant and equipment, intangible assets, net
89,207
30,704
12,486
8,734
732
141,863
Investments & loans in equity affiliates
7,328
16,455
3,638
555
5,093
3,647
791
1,260
1,042
11,833
Working capital
1,968
(1,004)
(264)
(43)
(4,470)
(3,813)
(24,909)
(4,566)
(4,658)
(1,641)
606
(35,168)
Assets and liabilities classified as held for sale
241
(83)
Capital Employed (Balance sheet)
78,928
45,611
11,910
8,865
(2,090)
143,224
Less inventory valuation effect
(535)
(607)
CAPITAL EMPLOYED (BUSINESS SEGMENT INFORMATION)
11,375
8,793
142,617
ROACE as a percentage
%
F-21
For the year ended December 31, 2019
31,329
2,825
32,390
659
125
(67,328)
(3,015)
(21,052)
38,590
20,992
116,973
66,887
135
(16,389)
(18,316)
(112,104)
(63,855)
(925)
67,328
(144,261)
(11,659)
(1,492)
(1,527)
(980)
(73)
(863)
16,257
3,405
155
(6,226)
(666)
13,436
(1,998)
(171)
(64)
397
(40)
(112)
(140)
(721)
(156)
(41)
(2)
(920)
(866)
(460)
356
(1,124)
974
696
49
(130)
(82)
(209)
(929)
384
191
(637)
(15)
(561)
477
(31)
371
18,231
200,380
21,056
176,313
(16,244)
(18,076)
(112,501)
(63,815)
(813)
(144,121)
(10,938)
(1,336)
(1,486)
(978)
(14,811)
11,408
1,644
2,986
2,094
(751)
17,381
722
1,356
405
184
2,709
(4,621)
(388)
(625)
228
(6,017)
(481)
14,073
(1,983)
(262)
AJUSTED NET INCOME - GROUP SHARE
11,828
F-22
8,992
7,053
1,698
1,374
120
368
1,108
249
16,917
3,461
3,837
2,604
(2,134)
Balance sheet as of December 31, 2019
98,894
29,597
12,196
8,316
583
149,586
7,631
15,271
3,787
433
4,484
2,993
744
1,179
10,409
2,617
796
178
(3,909)
(1,510)
(25,208)
(5,488)
(3,898)
(1,531)
153
(35,972)
426
88,844
41,549
13,625
8,575
(2,164)
150,429
(1,397)
(1,601)
12,228
8,371
148,828
For the year ended December 31, 2018
30,337
2,198
35,462
979
(69,040)
(3,359)
(21,898)
40,226
19,434
124,128
69,287
(17,532)
(17,679)
(120,393)
(66,737)
(796)
69,040
(154,097)
(10,192)
(1,827)
(1,222)
(709)
(767)
16,017
77
4,170
(6,843)
13,344
(1,794)
(104)
(adjustments) (a)
(199)
(237)
(45)
(9)
(1,106)
(707)
(1,065)
(1,774)
(906)
(1,246)
(2,824)
(128)
(247)
(116)
(496)
584
170
205
973
(450)
(1,323)
(529)
(36)
(2,347)
301
(2,113)
(589)
(6)
(413)
F-23
17,180
209,307
19,378
184,050
(17,333)
(17,442)
(119,777)
(66,692)
(787)
(152,991)
(9,485)
(762)
(1,220)
(12,218)
13,408
1,174
3,131
1,886
(758)
18,841
1,493
898
312
4,666
(6,354)
(641)
(650)
(546)
(7,816)
15,691
(1,727)
(405)
13,559
13,789
5,032
1,781
1,458
3,674
2,209
919
428
18,537
596
4,308
2,759
(1,497)
Balance sheet as of December 31, 2018
100,997
24,023
10,493
6,343
390
142,246
6,754
12,349
3,910
431
4,780
3,114
663
881
10,593
1,911
420
194
(4,064)
(1,507)
(25,042)
(6,288)
(3,615)
(1,465)
(36,285)
1,128
151
1,279
89,400
34,746
11,634
6,658
(2,668)
139,770
(1,035)
(216)
(1,251)
10,599
6,442
138,519
F-24
B) Reconciliation of the information by business segment with Consolidated Financial Statements
The table below presents the impact of adjustment items on the consolidated statement of income:
Consolidated
statement of
Adjusted
Adjustments(a)
income
(75,672)
(1,814)
(24,850)
(688)
1,405
832
(689)
(817)
(2,140)
(7)
(2,072)
(38)
(1)
1,388
(936)
(1,309)
991
4,067
(11,403)
(102)
(116,464)
243
(26,872)
(383)
876
287
(455)
(737)
(2,318)
(2,337)
2,260
1,146
(5,663)
12,090
(652)
262
(91)
F-25
(125,134)
(682)
(27,060)
(424)
1,518
320
(448)
(825)
(1,866)
(2,054)
3,161
(7,489)
13,964
(2,414)
(301)
C) Additional information on adjustment items
The main adjustment items for 2020 consist of the "Asset impairment charges" of the non-current assets amounting to $(8,952) million in operating income and $(8,465) million in net income Group share. Impairment testing methodology and asset impairment charges recorded during the year are detailed in the paragraph D of Note 3.
Adjustments to operating income
Inventory valuation effect
Effect of changes in fair value
Restructuring charges
(35)
(39)
(30)
Asset impairment charges
(278)
(134)
(958)
Adjustments to net income, Group share
(1,160)
(120)
(1,280)
(292)
(364)
(7,328)
(829)
(8,465)
Gains (losses) on disposals of assets
(566)
(106)
(224)
(1,319)
(7,357)
(1,415)
(2,181)
(228)
F-26
446
(281)
(627)
369
(23)
346
(22)
(530)
105
(465)
422
(119)
(369)
(940)
481
189
(595)
48
(70)
(132)
(229)
(433)
(414)
(420)
38
(10)
(34)
(138)
(651)
(896)
(48)
(1,595)
(16)
252
(47)
(507)
(982)
(53)
F-27
D) Asset impairment
The recoverable amounts of intangible assets and property, plant and equipment are tested for impairment as soon as any indication of impairment exists. This test is performed at least annually for goodwill.
The recoverable amount is the higher of the fair value (less costs to sell) or the value in use.
Assets are grouped into cash-generating units (or CGUs) and tested. A CGU is a homogeneous set of assets that generates cash inflows that are largely independent of the cash inflows from other groups of assets.
The value in use of a CGU is determined by reference to the discounted expected future cash flows of these assets, based upon Management’s expectation of future economic and operating conditions. When this value is less than the carrying amount of the CGU, an impairment loss is recorded. This loss is allocated first to goodwill with a corresponding amount in "Other expenses". Any further losses are then allocated to property, plant and mineral interests with a corresponding amount in "Depreciation, depletion and impairment of tangible assets and mineral interests" and to other intangible assets with a corresponding amount in "Other expenses".
Impairment losses recognized in prior periods can be reversed up to the original carrying amount, had the impairment loss not been recognized. Impairment losses recognized on goodwill cannot be reversed.
Investments in associates or joint ventures are tested for impairment whenever indication of impairment exists. If any objective evidence of impairment exists, the carrying amount of the investment is compared with its recoverable amount, being the higher of its fair value less costs to sell and value in use. If the carrying amount exceeds the recoverable amount, an impairment loss is recorded in "Net income (loss) from equity affiliates".
For the financial year 2020, asset impairments were recorded for an amount of $(8,952) million in operating income and $(8,465) million in net income, Group share. These impairments were qualified as adjustment items of the operating income and net income, Group share.
Impairments relate to certain cash-generating units (CGUs) for which indicators of impairment have been identified, due to changes in operating conditions or the economic environment of the activities concerned.
The principles applied are as follows:
The oil and gas price trajectories adopted by the Group are based on the following assumptions:
F-28
The CGUs of the Exploration & Production segment are defined as oil and gas fields or groups of oil and gas fields with industrial assets enabling the production, treatment and evacuation of the oil and gas. For the financial year 2020, impairments of assets were recognized over CGUs of the Exploration & Production segment for an impact of $(2,233) million in operating income and $(1,854) million in net income, Group share. Impairments recognized in 2020 mainly relate to Canadian oil sands assets.
The CGUs of the Integrated Gas, Renewables & Power segment are subsidiaries or groups of subsidiaries organized by activity or geographical area , and by fields or groups of fields for upstream LNG activities. For the financial year 2020, the Group recorded impairments on CGUs in the Integrated Gas, Renewables & Power segment for $(953) million in operating income and $(829) million in net income, Group share. Impairments recognized relate to LNG assets located in Australia.
The CGUs of the Refining & Chemicals segment are defined as legal entities with operational activities for refining and petrochemicals activities. Future cash flows are based on the gross contribution margin (calculated on the basis of net sales after purchases of crude oil and refined products, the effect of inventory valuation and variable costs). The other activities of the segment are global divisions, each division gathering a set of businesses or homogeneous products for strategic, commercial and industrial plans. Future cash flows are determined from the specific margins of these activities, unrelated to the price of oil. For the financial year 2020, the Group recorded impairments on CGUs in the Refining & Chemicals segment for $(306) million in operating income and $(306) million in net income, Group share. Impairments recognized mainly relate to refining CGUs located in France and the United Kingdom.
The CGUs of the Marketing & Services segment are subsidiaries or groups of subsidiaries organized by geographical area. For the financial year 2020, no impairment has been recorded for the CGUs of the Marketing & Services segment in operating income and impairments with a non-material impact have been recorded in net income, Group share.
In addition, in line with its new Climate Ambition announced on May 5, 2020, which aims at carbon neutrality, the Group has reviewed its oil assets that can be qualified as stranded, meaning with reserves beyond 20 years and high production costs, whose overall reserves may therefore not be produced by 2050. The only projects identified in this category are the Canadian oil sands projects of Fort Hills and Surmont.
For impairment calculations, the Group has decided to take into account only proven reserves on these two assets – unlike general practice which considers so-called proven and probable reserves. This leads to an additional exceptional asset impairment of $(5,460) million in operating income and $(5,474) million in net income, Group share.
Overall, asset impairments were recorded for the financial year 2020, for an amount of $(8,952) million in operating income and $(8,465) million in net income, Group share, including $(6,988) million on Canadian oil sands assets alone.
These impairments were qualified as adjustment items of the operating income and net income, Group share.
As for sensitivities of Exploration & Production segment:
-a decrease by one point in the discount rate would have an impact close to zero in operating income and in net income, Group share;
The most sensitive assets would be the assets already impaired in 2020 or before (impact of approximately $1.1 billion in operating income and $0.9 billion in net income, Group share), notably assets in Canada.
As for sensitivities of upstream LNG activities and CGUs including a material goodwill:
The most sensitive assets would be the assets already impaired in 2020 or before (impact of approximately $1.5 billion in operating income and $1.2 billion in net income, Group share), notably assets in Australia.
For the financial year 2019, the Group recorded impairments in Exploration & Production, Integrated Gas, Renewables & Power, Refining & Chemicals and Marketing & Services segments for an amount of $(920) million in operating income and $(465) million in net income, Group share. These impairments were qualified as adjustments items of the operating income and net income, Group share.
For the financial year 2018, the Group recorded impairments in Exploration & Production, Integrated Gas, Renewables & Power and Refining & Chemicals segments for an amount of $(1,774) million in operating income and $(1,595) million in net income, Group share. These impairments were qualified as adjustment items of the operating income and net income, Group share.
F-29
Notes 4 and 5
NOTE 4 Segment Information by geographical area
Rest of
North
Europe
America
Africa
the world
32,748
67,292
13,258
16,011
11,376
14,555
30,932
11,891
43,087
41,398
Capital expenditures
2,044
3,165
899
3,816
5,610
43,877
99,176
19,946
21,303
16,014
13,212
28,765
18,916
45,573
43,120
1,979
3,201
1,748
7,663
4,646
47,716
99,465
22,243
22,263
17,676
12,561
25,262
18,903
43,359
42,161
4,502
2,609
2,014
4,838
8,222
Items related to the statement of income
5.1 Net sales
IFRS 15 requires identification of the performance obligations for the transfer of goods and services in each contract with customers. Revenue is recognized upon satisfaction of the performance obligations for the amounts that reflect the consideration to which the Group expects to be entitled in exchange for those goods and services.
Sales of goods
Revenues from sales are recognized when the control has been transferred to the buyer and the amount can be reasonably measured. Revenues from sales of crude oil and natural gas are recorded upon transfer of title, according to the terms of the sales contracts.
Revenues from the production of crude oil and natural gas properties, in which the Group has an interest with other producers, are recognized based on actual entitlement volumes sold over the period. Any difference between entitlement volumes and volumes sold, based on the Group net working interest, are recognized in the “Under-lifting” and “Over-lifting” accounts in the balance sheet and in operating expenses in the profit and loss.
Quantities delivered that represent production royalties and taxes, when paid in cash, are included in oil and gas revenues, except for the United States and Canada.
Certain transactions within the trading activities (contracts involving quantities that are purchased from third parties then resold to third parties) are shown at their net value in purchases, net of inventory variation. These transactions relate in particular to crude oil, petroleum products, gas, power and LNG.
Exchanges of crude oil and petroleum products realized within trading activities are shown at their net value in both the statement of income and the balance sheet.
F-30
Note 5
Sales of services
Revenues from services are recognized when the services have been rendered.
Revenues from gas transport are recognized when services are rendered. These revenues are based on the quantities transported and measured according to procedures defined in each service contract.
Shipping revenues and expenses from time-charter activities are recognized on a pro rata basis over a period that commences upon the unloading of the previous voyage and terminates upon the unloading of the current voyage. Shipping revenue recognition starts only when a charter has been agreed to by both the Group and the customer.
Income related to the distribution of electricity and gas is not recognized in revenues in some countries because the Group acts as an agent in this transaction. In these countries, the Group is not responsible for the delivery and does not set the price of the service, because it can only pass on to the customer the amounts invoiced to it by the distributors.
Excise taxes are rights or taxes which amount is calculated based on the quantity of oil and gas products put on the market. Excise taxes are determined by the states. They are paid directly to the customs and tax authorities and then invoiced to final customers by being included in the sales price.
The analysis of the criteria set by IFRS 15 led the Group to determine that it was acting as principal in these transactions. Therefore, sales include excise taxes collected by the Group within the course of its oil distribution operations. Excise taxes are deducted from sales in order to obtain the “Revenues from sales” indicator.
5.2 Operating expenses and research and development
The Group applies IFRS 6 “Exploration for and Evaluation of Mineral Resources”. Oil and gas exploration and production properties and assets are accounted for in accordance with the Successful Efforts method.
Geological and geophysical costs, including seismic surveys for exploration purposes are expensed as incurred in exploration costs.
Costs of dry wells and wells that have not found proved reserves are charged to expense in exploration costs.
5.2.1 Operating expenses
For the year ended December 31,
Purchases, net of inventory variation (a) (b)
Other operating expenses (c)
of which non-current operating liabilities (allowances) reversals
778
1,068
of which current operating liabilities (allowances) reversals
(77)
(157)
(202)
OPERATING EXPENSES
5.2.2 Research and development costs
Research costs are charged to expense as incurred.
Development expenses are capitalized when the criteria of IAS38 are met.
Research and development costs incurred by the Group in 2020 and booked in operating expenses amount to $895 million ($968 million in 2019 and $986 million in 2018), corresponding to 0.64% of the sales.
The staff dedicated in 2020 to these research and development activities are estimated at 4,088 people (4,339 in 2019 and 4,288 in 2018).
5.3 Amortization, depreciation and impairment of tangible assets and mineral interests
The amortization, depreciation and impairment of tangible assets and mineral interests are detailed as follows:
Depreciation and impairment of tangible assets
(21,188)
(14,640)
(13,364)
Amortization and impairment of mineral assets
(1,076)
(1,091)
(628)
F-31
Items related to balance sheet
5.4 Working capital
5.4.1 Inventories
Inventories are measured in the Consolidated Financial Statements at the lower of historical cost or market value. Costs for petroleum and petrochemical products are determined according to the FIFO (First-In, First-Out) method or weighted-average cost method and other inventories are measured using the weighted-average cost method.
In addition stocks held for trading are measured at fair value less cost to sell.
Petroleum product inventories are mainly comprised of crude oil and refined products. Refined products principally consist of gasoline, distillate and fuel produced by the Group's refineries. The turnover of petroleum products does not exceed two months on average.
Crude oil costs include raw material and receiving costs. Refining costs principally include crude oil costs, production costs (energy, labor, depreciation of producing assets) and an allocation of production overheads (taxes, maintenance, insurance, etc.).
Costs of chemical product inventories consist of raw material costs, direct labor costs and an allocation of production overheads. Start-up costs, general administrative costs and financing costs are excluded from the costs of refined and chemicals products.
Marketing & Services
The costs of products refined by the Group’s entities include mainly raw materials costs, production costs (energy, labor, depreciation of producing assets), primary costs of transport and an allocation of production overheads (taxes, maintenance, insurance, etc.).
General administrative costs and financing costs are excluded from the cost price of refined products.
Product inventories purchased from entities external to the Group are valued at their purchase cost plus primary costs of transport.
Carbon dioxide emission rights generated as part of the EU Emission Trading scheme (EU ETS)
In the absence of a current IFRS standard or interpretation on accounting for emission rights of carbon dioxide generated as part of the EU Emission Trading scheme (EU ETS), the following principles are applied:
- Emission rights are managed as a cost of production and as such are recognized in inventories:
- At each closing, a provision is recorded in order to materialize the obligation to surrender emission rights related to the emissions of the period. This provision is calculated based on estimated emissions of the period, valued at weighted average cost of the inventories at the end of the period. It is reversed when the emission rights are surrendered;
- If emission rights to be surrendered at the end of the compliance period are higher than emission rights recorded in inventories, the shortage is accounted for as a liability at market value;
- Forward transactions are recognized at their fair market value in the balance sheet. Changes in the fair value of such forward transactions are recognized in the statement of income.
Energy savings certificates
In the absence of current IFRS standards or interpretations on accounting for energy savings certificates (ESC), the following principles are applied:
- If the obligations linked to the sales of energy are greater than the number of ESC’s held then a liability is recorded. These liabilities are valued based on the price of the last transactions;
- In the event that the number of ESC’s held exceeds the obligation at the balance sheet date this is accounted for as inventory. Otherwise a valuation allowance is recorded ;
- ESC inventories are valued at weighted average cost (acquisition cost for those ESC’s acquired or cost incurred for those ESC’s generated internally).
If the carrying value of the inventory of certificates at the balance sheet date is higher than the market value, an impairment loss is recorded.
F-32
As of December 31, 2020
Valuation
Gross value
allowance
Net value
Crude oil and natural gas
1,818
1,817
Refined products
3,913
(68)
3,845
Chemicals products
1,330
1,228
Trading inventories
5,130
Other inventories
3,824
(1,114)
2,710
16,015
(1,285)
2,381
2,367
5,326
5,281
1,448
1,357
5,500
3,651
(1,024)
2,627
18,306
(1,174)
2,382
(110)
2,272
5,464
(242)
5,222
1,087
1,033
3,918
3,372
(937)
2,435
16,223
(1,343)
Changes in the valuation allowance on inventories are as follows:
allowance as of
adjustment and
January 1,
Increase (net)
other variations
December 31,
(85)
(26)
(1,007)
(359)
5.4.2 Accounts receivable and other current assets
Accounts receivable
14,899
(831)
Recoverable taxes
3,598
3,531
Other operating receivables
8,251
8,043
Prepaid expenses
13,703
(275)
19,162
(674)
4,209
(95)
4,114
11,746
11,506
1,336
17,348
(335)
F-33
17,894
(624)
4,090
10,306
(573)
9,733
837
15,297
Changes in the valuation allowance on “Accounts receivable” and “Other current assets” are as follows:
adjustments and
(107)
(50)
(89)
(576)
(62)
(46)
(461)
(148)
As of December 31, 2020, the net portion of the overdue receivables included in “Accounts receivable” and “Other current assets” was $4,197 million, of which $2,140 million was due in less than 90 days, $239 million was due between 90 days and 6 months, $553 million was due between 6 and 12 months and $1,265 million was due after 12 months.
As of December 31, 2019, the net portion of the overdue receivables included in “Accounts receivable” and “Other current assets” was $3,760 million, of which $2,089 million was due in less than 90 days, $357 million was due between 90 days and 6 months, $402 million was due between 6 and 12 months and $912 million was due after 12 months.
As of December 31, 2018, the net portion of the overdue receivables included in “Accounts receivable” and “Other current assets” was $3,767 million, of which $1,993 million was due in less than 90 days, $273 million was due between 90 days and 6 months, $450 million was due between 6 and 12 months and $1,051 million was due after 12 months.
5.4.3 Other creditors and accrued liabilities
Accruals and deferred income
842
522
546
Payable to States (including taxes and duties)
5,734
7,438
6,861
Payroll
1,587
1,553
Other operating liabilities
14,302
16,262
13,286
As of December 31, 2020, the heading “Other operating liabilities” includes mainly the second quarterly interim dividend for the fiscal year 2020 for $2,129 million, which was paid in January 2021 and the third quarterly interim dividend for the fiscal year 2020 for $2,149 million, which will be paid in April 2021.
As of December 31, 2019, the heading "Other operating liabilities" included mainly the second quarterly interim dividend for the fiscal year 2019 for $1,918 million, which was paid in January 2020 and the third quarterly interim dividend for the fiscal year 2019 for $2,038 million, which was paid in April 2020.
As of December 31, 2018, the heading “Other operating liabilities” included mainly the second quarterly interim dividend for the fiscal year 2018 for $1,911 million, which was paid in January 2019 and the third quarterly interim dividend for the fiscal year 2018 for $1,912 million, which was paid in April 2019.
F-34
Notes 5 and 6
Items related to the cash flow statement
5.5 Cash flow from operating activities
The Consolidated Statement of Cash Flows prepared in currencies other than dollar has been translated into dollars using the exchange rate on the transaction date or the average exchange rate for the period. Currency translation differences arising from the translation of monetary assets and liabilities denominated in foreign currency into dollars using the closing exchange rates are shown in the Consolidated Statement of Cash Flows under “Effect of exchange rates”. Therefore, the Consolidated Statement of Cash Flows will not agree with the figures derived from the Consolidated Balance Sheet.
The following table gives additional information on cash paid or received in the cash flow from operating activities.
Detail of interest, taxes and dividends
Interests paid
(2,145)
(1,818)
Interests received
197
210
164
Income tax paid(a)
(2,858)
(5,293)
(5,024)
Dividends received
1,988
2,456
Detail of changes in working capital
Inventories
2,274
(2,071)
1,430
4,818
(933)
(1,461)
3,374
(2,001)
(5,355)
1,998
(822)
(3,242)
1,289
1,986
NET AMOUNT, DECREASE (INCREASE)
Detail of changes in provisions and deferred taxes
Accruals
350
403
(432)
Deferred taxes
(2,132)
6.1 Other income and other expense
Gains on disposal of assets
961
670
1,041
Foreign exchange gains
746
238
255
545
OTHER INCOME
Losses on disposal of assets
(52)
(56)
(111)
Foreign exchange losses
(320)
(463)
(444)
Amortization of other intangible assets (excl. mineral interests)
(343)
(266)
(225)
(791)
(407)
(493)
OTHER EXPENSE
F-35
Note 6
In 2020, gains on disposal of assets are mainly related to the sale of non-strategic assets in the British North Sea in the Exploration & Production segment, to the sale of group’s interest in the Fos Cavaou regasification terminal in France and the sale of infrastructure assets in the Integrated Gas Renewables & Power segment, as well as to the sale of real estate in Belgium in the Holding segment.
In 2019, gains on disposal of assets mainly related to the sale of assets and interests in Norway in the Exploration & Production segment, to the sale of Hazira and SunPower assets in the Integrated Gas Renewables & Power segment and the sale of assets in China in the Refining & Chemicals segment.
In 2018, gains on disposal of assets mainly related to the sale of assets and interests in Norway, Canada and Gabon in the Exploration & Production segment, to the sale of Dunkerque LNG SAS and SunPower assets in the Integrated Gas Renewables & Power segment and the sale of TotalErg and Total Haiti in the Marketing & Services segment.
In 2020, the heading “Other” notably consists of restructuring charges in the Exploration & Production, Integrated Gas Renewables & Power and Refining & Chemicals segments for an amount of $312 million, and of the impairment of non-consolidated shares and loans granted to non-consolidated subsidiaries for an amount of $64 million.
In 2019, the heading “Other” notably consisted of restructuring charges in the Exploration & Production, Integrated Gas Renewables & Power and Refining & Chemicals segments for an amount of $96 million, and of the revaluation at fair value of non-consolidated shares for $94 million.
In 2018, the heading “Other” mainly consisted of restructuring charges in the Exploration & Production, Integrated Gas Renewables & Power and Refining & Chemicals segments for an amount of $179 million, and of the impairment of non-consolidated shares and loans granted to non-consolidated subsidiaries and equity affiliates for $77 million.
6.2 Other financial income and expense
Dividend income on non-consolidated subsidiaries
160
Capitalized financial expenses
110
227
519
644
387
OTHER FINANCIAL INCOME
Accretion of asset retirement obligations
(639)
(125)
(155)
OTHER FINANCIAL EXPENSE
6.3 Other non-current assets
Loans and advances (a)
2,731
(273)
2,458
Other non-current financial assets related to operational activities
3,083
2,248
1,982
332
2,681
2,180
(303)
1,877
471
161
2,812
F-36
Note 7
Changes in the valuation allowance on loans and advances are detailed as follows:
Increases
Decreases
43
7.1 Intangible assets
Guidance for measuring goodwill is presented in Note 1.1 paragraph B to the Consolidated Financial Statements. Goodwill is not amortized but is tested for impairment at least annually and as soon as there is any indication of impairment.
Mineral interests
Unproved mineral interests are tested for impairment based on the results of the exploratory activity or as part of the impairment tests of the cash-generating units to which they are allocated.
Unproved mineral interests are transferred to proved mineral interests at their net book value as soon as proved reserves are booked.
Proved mineral interests are depreciated using the unit-of-production method based on proved reserves.
The corresponding expense is recorded as depreciation of tangible assets and mineral interests.
Other intangible assets
Other intangible assets include patents, and trademarks.
Intangible assets are carried at cost, after deducting any accumulated amortization and accumulated impairment losses.
Intangible assets (excluding mineral interests) that have a finite useful life are amortized on a straight-line basis over three to twenty years depending on the useful life of the assets. The corresponding depreciation expense is recorded under other expense.
.
Amortization and
Cost
impairment
Net
9,738
(931)
8,807
Proved mineral interests
16,559
(9,595)
6,964
Unproved mineral interests
20,300
(4,790)
15,510
7,212
(4,965)
2,247
TOTAL INTANGIBLE ASSETS
53,809
(20,281)
9,357
(1,011)
8,346
15,966
(8,741)
7,225
20,138
(4,558)
15,580
5,743
(3,716)
2,027
51,204
(18,026)
9,188
(1,014)
8,174
14,775
(7,947)
6,828
16,712
(4,491)
12,221
5,824
(4,125)
1,699
46,499
(17,577)
F-37
Change in net intangible assets is analyzed in the following table:
Net amount as of
Expenditures
Disposals
784
(277)
(1,430)
305
968
(118)
4,741
14,587
3,745
(28)
(852)
(351)
11,821
In 2020, the heading “Amortization and impairment" includes the accounting impact of exceptional asset impairments for an amount of $323 million (see note 3 paragraph D to the Consolidated Financial Statements).
In 2020, the heading “Other” principally corresponds to the effect of the variations in the consolidation scope (including the acquisition of the residential gas and electricity supply business in Spain) for $898 million.
In 2019, the heading "Amortization and impairment" included the accounting impact of exceptional asset impairments for an amount of $251 million (see note 3 paragraph D to the Consolidated Financial Statements).
In 2019, the heading "Other" principally corresponded to the effect of the entries in the consolidation scope (including the assets of Anadarko in Mozambique) for $3,887 million.
In 2018, the heading “Amortization and impairment" included the accounting impact of exceptional asset impairments for an amount of $67 million (see note 3 paragraph D to the Consolidated Financial Statements).
In 2018, the heading "Other" principally corresponded to the effect of the entries in the consolidation scope (including Maersk Oil, Global LNG and Direct Energie) for $12,044 million.
A summary of changes in the carrying amount of goodwill by business segment for the year ended December 31, 2020 is as follows:
Net goodwill as of
January 1, 2020
Impairments
December 31, 2020
2,642
2,638
4,774
401
5,247
523
534
379
418
The heading “Increases” includes the effect of entries in the consolidation scope, mainly the acquisition in Spain of the gas and electricity residential supply for an amount of $345 million (see Note 2 paragraph 2 to the Consolidated Financial Statements).
F-38
7.2 Property, plant and equipment
Exploratory wells are capitalized and tested for impairment on an individual basis as follows:
- Costs of exploratory wells which result in proved reserves are capitalized and then depreciated using the unit-of-production method based on proved developed reserves;
- Costs of exploratory wells are temporarily capitalized until proved reserves have been found, if both of the following conditions are met:
● The well has found a sufficient quantity of reserves to justify, if appropriate, its completion as a producing well, assuming that the required capital expenditures are made;
● The Group is making sufficient progress assessing the reserves and the economic and operating viability of the project. This progress is evaluated on the basis of indicators such as whether additional exploratory works are under way or firmly planned (wells, seismic or significant studies), whether costs are being incurred for development studies and whether the Group is waiting for governmental or other third-party authorization on a proposed project, or availability of capacity on an existing transport or processing facility.
Costs of exploratory wells not meeting these conditions are charged to exploration costs.
Oil and Gas production assets of exploration and production activities
Development costs of oil and gas production facilities are capitalized. These costs include borrowing costs incurred during the period of construction and the present value of estimated future costs of asset retirement obligations.
The depletion rate of development wells and of production assets is equal to the ratio of oil and gas production for the period to proved developed reserves (unit-of-production method).
In the event that, due to the price effect on reserves evaluation, the unit-of-production method does not reflect properly the useful life of the asset, an alternative depreciation method is applied based on the reserves evaluated with the price of the previous year. This is the case in 2020 where the method of unit-of-production depreciation is applied to all assets in 2020 based on proven reserves measured with the price used in 2019. This method complies with IAS16.
With respect to phased development projects or projects subject to progressive well production start-up, the fixed assets’ depreciable amount, excluding production or service wells, is adjusted to exclude the portion of development costs attributable to the undeveloped reserves of these projects.
With respect to production sharing contracts, the unit-of-production method is based on the portion of production and reserves assigned to the Group taking into account estimates based on the contractual clauses regarding the reimbursement of exploration, development and production costs (cost oil/gas) as well as the sharing of hydrocarbon rights after deduction of cost oil (profit oil/gas).
Hydrocarbon transportation and processing assets are depreciated using the unit-of-production method based on throughput or by using the straight-line method whichever best reflects the economic life of the asset.
Other property, plant and equipment
Other property, plant and equipment are carried at cost, after deducting any accumulated depreciation and accumulated impairment losses. This cost includes borrowing costs directly attributable to the acquisition or production of a qualifying asset incurred until assets are placed in service. Borrowing costs are capitalized as follows:
● if the project benefits from a specific funding, the capitalization of borrowing costs is based on the borrowing rate;
● if the project is financed by all the Group’s debt, the capitalization of borrowing costs is based on the weighted average borrowing cost for the period.
Routine maintenance and repairs are charged to expense as incurred. The costs of major turnarounds of refineries and large petrochemical units are capitalized as incurred and depreciated over the period of time between two consecutive major turnarounds.
Other property, plant and equipment are depreciated using the straight-line method over their useful lives, which are as follows:
3-12 years
5-20 years
10-15 years
10-30 years
10-50 years
F-39
Depreciation and
Property, plant and equipment of exploration and production activities
Proved properties
215,892
(147,914)
67,978
Unproved properties
2,978
(268)
Work in progress
13,873
(861)
13,012
Subtotal
232,743
(149,043)
83,700
Land
2,999
(905)
Machinery, plant and equipment (including transportation equipment)
39,506
(27,381)
12,125
Buildings
11,184
(6,858)
4,326
3,063
3,062
10,983
(7,955)
3,028
67,735
(43,100)
24,635
TOTAL PROPERTY, PLANT AND EQUIPMENT
300,478
(192,143)
210,071
(130,134)
79,937
2,160
(288)
1,872
12,056
(569)
11,487
224,287
(130,991)
93,296
2,826
(792)
2,034
36,747
(25,548)
11,199
10,519
(6,032)
4,487
2,501
2,499
10,137
(7,244)
2,893
62,730
(39,618)
23,112
287,017
(170,609)
192,272
(120,435)
71,837
1,673
(152)
1,521
22,553
(1,128)
21,425
216,498
(121,715)
94,783
1,775
(648)
1,127
34,564
(25,393)
9,171
8,864
(5,640)
3,224
2,540
2,538
(6,690)
56,914
(38,373)
18,541
273,412
(160,088)
Change in net property, plant and equipment is analyzed in the following table:
9,980
(21,544)
1,706
2,396
(1,052)
(15,097)
(270)
8,077
109,397
13,336
(2,494)
(13,732)
(1,454)
8,271
In 2020, the heading “Disposals” mainly includes the sale of non strategic assets in the United Kingdom for $240 million.
In 2020, the heading “Depreciation and impairment” includes the impact of impairments of assets recognized for an amount of $8,629 million (see Note 3 paragraph D to the Consolidated Financial Statements).
F-40
In 2020, the heading “Other” includes the effect of the entries and exits in the consolidation scope, the impact of the new IFRS 16 contracts of the period (mainly LNG carriers and FPSO vessels) for an amount of $1,815 million, and the reversal of the reclassification under IFRS 5 as at December 31, 2019 for $434 million corresponding to disposals (mainly non strategic assets in the United Kingdom and Total E&P Deep Offshore Borneo BV).
In 2019, the heading "Disposals" mainly included the impact of the 4% sale of Ichthys LNG in Australia.
In 2019, the heading "Depreciation and impairment" included the impact of impairments of assets recognized for an amount of $669 million (see Note 3 paragraph D to the Consolidated Financial Statements).
In 2019, the heading "Other" principally corresponded to the effect of the first application of IFRS 16 for an amount of $5,698 million, the entries in the consolidation scope (including Anadarko assets for $767 million) and the reversal of the reclassification under IFRS 5 as at December 31, 2018 for $812 million corresponding to disposals.
In 2018, the heading “Disposals” mainly included the impact of sales in the Exploration & Production segment (mainly Martin Linge in Norway and Fort Hills in Canada).
In 2018, the heading “Depreciation and impairment” included the impact of impairments of assets recognized for an amount of $1,707 million (see Note 3 paragraph D to the Consolidated Financial Statements).
In 2018, the heading “Other” principally corresponded to the effect of the entries in the consolidation scope (including Maersk, Lapa and Iara in Brazil and Direct Energie) for $6,987 million, to the reclassification of assets in accordance with IFRS 5 "Non-current assets held for sale and discontinued operations” (mainly related to the 4% sale of Ichthys for $(812) million) and the reversal of the reclassification under IFRS 5 as at December 31, 2017 for $2,604 million corresponding to disposals.
Following the application of IFRS 16 "Leases", property, plant and equipment as at December 31, 2020 and 2019 presented above include the following amounts for rights of use of assets:
2,758
(1,297)
1,461
1,187
(222)
965
4,606
(1,631)
2,975
(385)
1,393
682
(286)
396
8,253
(2,524)
5,729
11,011
(3,821)
7,190
2,482
1,965
1,031
927
3,527
(999)
2,528
1,545
1,344
483
6,586
(1,438)
5,148
9,068
(1,955)
7,113
Property, plant and equipment as at December 31, 2018 presented above include the following amounts for facilities and equipment under finance leases:
Machinery, plant and equipment
(605)
1,173
121
543
460
2,442
(744)
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Note 8
8.1 Equity affiliates: investments and loans
Under the equity method, the investment in the associate or joint venture is initially recognized at acquisition cost and subsequently adjusted to recognize the Group’s share of the net income and other comprehensive income of the associate or joint venture.
Unrealized gains on transactions between the Group and its equity-accounted entities are eliminated to the extent of the Group’s interest in the equity accounted entity.
In equity affiliates, goodwill is included in investment book value.
In cases where the group holds less than 20% of the voting rights in another entity, the determination of whether the Group exercises significant influence is also based on other facts and circumstances: representation on the board of directors or an equivalent governing body of the entity, participation in policy-making processes, including participation in decisions relating to dividends or other distributions, significant transactions between the investor and the entity, exchange of management personnel, or provision of essential technical information.
The contribution of equity affiliates in the consolidated balance sheet, consolidated statement of income and consolidated statement of comprehensive income is presented below:
Equity value
As of December 31,
Total Associates
15,745
17,026
13,330
Total Joint ventures
7,102
6,097
5,359
22,847
23,123
18,689
Loans
5,129
3,999
4,755
Profit/(loss)
753
2,534
872
841
(1,704)
592
(127)
(79)
F-42
A) Information related to associates
Information (100% gross) related to significant associates is as follows:
Exploration and production activites
Novatek(a)
Liquefaction entities
PetroCedeño(a)
Non current assets
23,748
24,081
14,639
34,273
30,578
28,664
4,008
3,994
4,324
6,898
4,545
7,537
9,994
9,358
6,428
7,457
5,580
Total Assets
27,918
30,979
19,184
41,810
40,572
38,022
10,436
11,451
9,904
Shareholder’s equity
22,160
24,884
14,163
23,403
23,640
22,615
4,548
4,581
Non current liabilities
3,164
3,727
3,086
13,608
11,445
9,826
73
76
2,594
2,368
1,935
4,799
5,487
5,581
5,815
6,827
5,303
Total Liabilities
Revenue from sales
13,227
13,415
15,584
22,684
25,644
66
1,629
Net income
1,759
8,260
4,636
2,416
5,692
7,408
(33)
(3,206)
1,807
(2,545)
% owned
19.40
30.32
Revaluation identifiable assets on equity affiliates
1,297
1,641
1,556
1,837
1,714
44
5,596
6,469
4,303
5,534
5,493
3,758
1,379
1,389
264
1,508
237
637
874
Share of Other Comprehensive Income, net amount
(1,409)
634
(122)
Dividends paid to the Group
229
266
406
752
816
218
Novatek, listed in Moscow and London, is the 2nd largest producer of natural gas in Russia. The Group share of Novatek’s market value amounted to $9,951 million as at December 31, 2020. Novatek is consolidated by the equity method. TOTAL, in fact, exercises significant influence particularly through its representation on the Board of Directors of Novatek and its interest in Yamal LNG and the project Arctic LNG 2.
The Group is not aware of significant restrictions limiting the ability of OAO Novatek to transfer funds to its shareholder, be it under the form of dividends, repayment of advances or loans made.
The Group’s interests in associates operating liquefaction plants are combined. The amounts include investments in: Nigeria LNG (15.00%), Angola LNG (13.60%), Yemen LNG (39.62%), Qatar Liquefied Gas Company Limited (Qatargas) (10.00%), Qatar Liquefied Gas Company Limited II (16.70%), Oman LNG (5.54%), and Abu Dhabi Gas Liquefaction Company Limited (5.00%), Arctic LNG 2 (10.00%).
PetroCedeño produces and upgrades extra-heavy crude oil in Venezuela.
Saudi Aramco Total
Refining & Chemicals activities
Refining & Petrochemicals
Qatar
10,698
10,976
11,281
4,105
4,160
3,968
1,211
1,793
2,069
1,571
1,741
11,909
12,769
13,350
5,626
5,731
5,709
1,256
2,113
2,412
2,717
2,676
2,748
7,994
8,098
8,398
2,171
2,150
1,914
2,659
2,558
738
905
1,047
6,031
10,522
11,886
8,225
9,929
(686)
409
(124)
111
(21)
37.50
716
706
(257)
46
198
40
63
159
271
Saudi Aramco Total Refining & Petrochemicals is an entity including a refinery in Jubail, Saudi Arabia, with a capacity of 460,000 barrels/day with integrated petrochemical units.
The Group’s interests in associates of the Refining & Chemicals segment, operating steam crackers and polyethylene lines in Qatar have been combined: Qatar Petrochemical Company Ltd. (20.00%), Qatofin (49.09%), Laffan Refinery (10.00%) and Laffan Refinery II (10.00%).
F-43
B) Information related to joint ventures
The information (100% gross) related to significant joint ventures is as follows:
Hanwha Total Petrochemicals
(Integrated Gas, Renewables & Power)
(Refining & Chemicals)
70,425
70,279
68,003
4,664
4,310
4,017
Current assets excluding cash and cash equivalents
1,513
1,866
1,928
1,575
1,842
1,834
1,678
339
303
73,772
73,823
70,270
6,542
6,474
6,434
4,433
7,151
7,059
3,443
3,319
3,534
Other non current liabilities
8,259
6,864
3,472
167
150
157
Non current financial debts
58,128
56,379
56,841
1,703
1,761
1,418
Other current liabilities
2,952
3,429
2,898
756
725
Current financial debts
646
488
600
8,543
9,240
2,908
8,437
10,191
Depreciation and depletion of tangible assets and mineral interests
(3,130)
(3,040)
(1,227)
(256)
(269)
Interest income
119
Interest expense
(2,972)
(2,993)
(670)
(386)
(310)
(2,399)
383
2,029
133
302
(323)
(429)
132
(169)
50.00
660
683
1,602
2,318
2,404
1,721
1,660
1,767
(633)
192
67
377
(84)
87
200
The Group’s interests in joint ventures operating liquefaction plants have been combined. The amounts include investments in Yamal LNG in Russia (20.02% direct holding) and Ichthys LNG in Australia (26.00%).
Hanwha Total Petrochemicals is a South Korean company that operates a petrochemical complex in Daesan (condensate separator, steam cracker, styrene, paraxylene, polyolefins).
Off balance sheet commitments relating to joint ventures are disclosed in Note 13 of the Consolidated Financial Statements.
C) Other equity consolidated affiliates
In Group share, the main aggregated financial items in equity consolidated affiliates including assets held for sale, which have not been presented individually are as follows:
Joint
Associates
ventures
Non Current assets
5,454
7,002
5,435
4,287
4,512
2,487
1,299
1,276
1,263
6,753
8,673
6,792
5,563
5,775
3,239
Shareholder's equity
1,183
1,963
1,437
1,438
4,881
5,469
4,412
3,091
3,254
1,585
689
1,241
975
1,035
1,083
TOTAL LIABILITIES
2,154
3,116
2,190
3,535
2,542
11,914
NET INCOME
288
380
281
Share of other comprehensive income items
2,049
3,779
2,119
2,235
1,188
Profit/(Loss)
265
372
741
362
50
416
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8.2 Other investments
Other investments are equity instruments and are measured according to IFRS 9 at fair value through profit and loss (default option). On initial recognition, the standard allows to make a choice and record the changes of fair value in other comprehensive income. For these securities, only dividends can be recognized in profit or loss.
The Group recognizes changes in fair value in equity or in profit or loss according to the option chosen on an instrument by instrument basis.
For quoted shares on active markets, this fair value is equal to the market price.
As of
Increase -
Change in
Decrease
fair value
Enphase Energy Inc
173
(251)
691
613
Tellurian Investments Inc.
(149)
Other shares through fair value OCI (unit value < $50M)
126
113
Equity instruments recorded through fair value OCI
506
783
BBPP
58
BTC Limited
Tas Helat Marketing Company (a)
108
(108)
Other shares through fair value P&L (unit value < $50M)
1,074
84
1,139
Equity instruments recorded through fair value P&L
1,272
TOTAL EQUITY INSTRUMENTS
(284)
513
Total Lubrificantes do Brasil (b)
836
1,059
80
DUNKERQUE LNG SAS
(217)
Total Lubrificantes do Brasil(a)
1,182
(346)
1,443
(452)
1,727
(372)
F-45
8.3 Related parties
The main transactions as well as receivable and payable balances with related parties (principally non-consolidated subsidiaries and equity consolidated affiliates) are detailed as follows:
Balance sheet
Receivables
Debtors and other debtors
486
496
Loans (excl. loans to equity affiliates)
89
Payables
Creditors and other creditors
662
888
Debts
Statement of income
3,134
4,127
4,192
Purchases
(7,183)
(10,158)
(9,253)
Financial income
Financial expense
8.4 Compensation for the administration and management bodies
The aggregate amount of direct and indirect compensation accounted by the French and foreign affiliates of the Company, for all executive officers of TOTAL as of December 31 and for the members of the Board of Directors who are employees of the Group, is detailed below.
During the fiscal year 2020, the Company, taking into account the definition used by the US regulations applicable to Executive Officers and in the interest of harmonization, has chosen to reduce the list of its Executive Officers to the members of the Executive Committee in order to align this list with the list of “Persons Discharging Managerial Responsibilities" (PDMR) within the meaning of Article 19.5 of Regulation (EU) No. 596/2014 on Market Abuse ("Regulation"). For the purposes of this Regulation, PDMRs are defined as the persons referred to in Article L. 621-18-2 (a) of the French Monetary and Financial Code (the "Directors") and the persons referred to in Article L. 621-18-2 (b) of the same code that TOTAL SE has defined as the members of the TOTAL Executive Committee ("COMEX").
As of December 31, 2020, the Group executive officers are the members of the Executive Committee, i.e. eight people.
As of December 31, 2019, the Group executive officers included the members of the Executive Committee and the four directors of the corporate functions members of the Group Performance Management Committee (Communication, Legal, Health, Safety and Environment, Investor relations), and the Group Treasurer, i.e. thirteen people.
There are three employees members of the Board of Directors on December 31, 2020. They were two on December 31, 2019. The increase in the number of employees members results from the appointment of a second director representing employees on the Board of Directors in accordance with the French “Pacte law” of May 22, 2019.
Number of people
Direct or indirect compensation
12.6
15.0
17.7
Pension expenses (a)
(4.9)
Share-based payments expense (IFRS 2) (b)
7.2
8.7
Restating the 2019 and 2018 data, to the scope of the main Group of executive officers as defined in 2020, the detail of the compensation is as follows:
12.0
14.0
Pension expenses
(2.4)
1.4
Share-based payments expense (IFRS 2)
7.7
The compensation allocated to members of the Board of Directors for directors’ fees totaled $1.44 million in 2020 ($1.57 million in 2019 and $1.65 million in 2018).
F-46
Note 9
9.1 Shareholders’ equity
Number of TOTAL shares and rights attached
As of December 31, 2020, the share capital of TOTAL SE amounts to €6,632,810,062.50, divided into 2,653,124,025 shares, with a par value of €2.50. There is only one category of shares. The shares may be held in either registered or bearer form.
The authorized share capital amounts to 3,668,371,962 shares as of December 31, 2020 compared to 3,593,399,547 shares as of December 31, 2019 and 3,669,077,772 shares as of December 31, 2018.
A double voting right is assigned to shares that are fully-paid and held in registered form in the name of the same shareholder for at least two years, with due consideration for the total portion of the share capital represented. A double voting right is also assigned, in the event of an increase in share capital by incorporation of reserves, profits or premiums, to registered shares granted for free to a shareholder due to shares already held that are entitled to this right.
Pursuant to the Company's bylaws (Statutes), no shareholder may cast a vote at a Shareholders' Meeting, either by himself or through an agent, representing more than 10% of the total voting rights for the Company's shares. This limit applies to the aggregated amount of voting rights held directly, indirectly or through voting proxies. However, in the case of double voting rights, this limit may be extended up to 20% of the total voting rights for the Company's shares.
These restrictions no longer apply if any individual or entity, acting alone or in concert, acquires at least two-thirds of the total share capital of the Company, directly or indirectly, following a public tender offer for all of the Company’s shares.
The Board of Directors, pursuant to the authorization granted by the Extraordinary Shareholders’ Meeting on May 26, 2017, in the thirteenth resolution to reduce, on one or more occasions, the Company’s share capital by cancelling shares, in accordance with the provisions of Articles L. 225-209 and L. 225-213 of the French Commercial Code, has proceeded with the following cancellation of TOTAL shares:
Percentage
Number of shares
Buybacks for the purpose of
of the share
Fiscal
Board of Directors’
bought back and
cancellation of the
the shareholder
capital
year
decision date
cancelled
dilution(a)
return policy(b)
cancelled(c)
n/a(d)
December 11, 2019
65,109,435 shares bought back between October 29, 2018 and September 9, 2019
34,860,133 shares issued as payment for the 1st, 2nd and 3rd 2018 interim dividends
30,249,302 shares
2.44
December 12, 2018
44,590,699 shares bought back between February 9 and October 11, 2018
28,445,840 shares issued as payment for the 2nd and 3rd interim dividends as well as for the final 2017 dividends
16,144,859 shares
1.66
F-47
Variation of the number of shares composing the share capital
As of December 31, 2017 (a)
2018 Capital increase reserved for employees
9,354,889
Capital increase as payment of the scrip dividend (second, third interim and final 2017 dividend, as well as the first 2018 interim dividend)
47,229,037
Exercise of TOTAL share subscription options
2,096,571
Capital increase in consideration for the acquisition of Maersk Olie og Gas A/S
97,522,593
Capital reduction by cancellation of treasury shares
As of December 31, 2018(b)
2019 Capital increase reserved for employees
10,047,337
Capital increase as payment of the scrip dividend (second and third 2018 interim dividend)
16,076,936
264,230
As of December 31, 2019(c)
Deferred contribution pursuant to the 2015 capital increase reserved for employees
18,879
2020 Capital increase reserved for employees
13,160,383
Capital increase as payment of the scrip dividend (final 2019 dividend)
38,063,688
AS OF DECEMBER 31, 2020 (d)
(d)Including 24,392,703 treasury shares deducted from consolidated shareholders’ equity.
Capital increase reserved for Group employees
The Extraordinary General Meeting (“EGM”) of May 29, 2020, in its twentieth resolution, granted the authority to the Board of Directors to carry out, a capital increase, in one or more occasions within a maximum period of twenty-six months, reserved to members (employees and retirees) of a company or group savings plan of the Company (“ESOP”).
In fiscal year 2020, the Board of Directors of September 16, 2020, by virtue of the twentieth resolution above-mentioned, decided to proceed with a capital increase reserved for Group employees and retirees within the limit of 18 million shares with immediate dividend rights. On this occasion, the Board of Directors has granted all powers to the Chairman and Chief Executive Officer to determine the opening and closing dates of the subscription period and the subscription price. This capital increase is expected to be completed after the General Meeting of May 28, 2021.
During the fiscal years 2018, 2019 and 2020, the Company completed the following ESOP, which terms are set out below:
Fiscal year
Date of the ESOP
June 11, 2020
June 6, 2019
May 3, 2018
By virtue of
18th resolution of the EGM of June 1, 2018
23rd resolution of the EGM of May 24, 2016
Subscriptions
Number of shares subscribed
12,952,925
9,845,111
9,174,817
Subscription price
26.20 euros
40.10 euros
37.20 euros
Free shares
Number of shares granted
207,458
202,226
180,072
19th resolution of the EGM of June 1, 2018
24th resolution of the EGM of June 24, 2016
Deferred contribution
1,380
5,932
6,784
Number of beneficiaries
276
1,360
End of the acquisition period
June 11, 2025
June 6, 2024
May 3, 2023
F-48
Treasury shares held by TOTAL SE or by its subsidiaries are deducted from consolidated shareholders’ equity. Gains or losses on sales of treasury shares are excluded from the determination of net income and are recognized in shareholders’ equity.
TOTAL shares held by TOTAL SE
Number of treasury shares held by TOTAL SE
24,392,703
15,474,234
32,473,281
Percentage of share capital
0.92
0.59
1.23
Of which shares acquired with the intention to cancel them
23,284,409
11,051,144
27,360,278
Of which shares allocated to TOTAL share performance plans for Group employees
1,055,446
4,357,324
5,044,817
Of which shares intended to be allocated to new share performance or purchase options plans
52,848
65,766
68,186
Paid-in surplus
In accordance with French law, the paid-in surplus corresponds to premiums related to shares issuances, contributions or mergers of the parent company which can be capitalized or used to offset losses if the legal reserve has reached its minimum required level. The amount of the paid-in surplus may also be distributed subject to taxation except when it qualifies as a refund of shareholder contributions.
As of December 31, 2020, paid-in surplus relating to TOTAL SE amounted to €36,722 million (€35,415 million as of December 31, 2019 and €37,276 million as of December 31, 2018).
Reserves
Under French law, 5% of net income must be transferred to the legal reserve until the legal reserve reaches 10% of the nominal value of the share capital. This reserve cannot be distributed to the shareholders other than upon liquidation but can be used to offset losses.
If wholly distributed, the unrestricted reserves of the parent company would be taxed for an approximate amount of $492 million as of December 31, 2020 ($575 million as of December 31, 2019 and $607 million as of December 31, 2018) due to additional corporation tax applied on regulatory reserves so that they become distributable.
F-49
Earnings per share
Earnings per share is calculated by dividing net income (Group share) by the weighted-average number of common shares outstanding during the period, excluding TOTAL shares held by TOTAL SE (Treasury shares) which are deducted from consolidated shareholders’ equity.
Diluted earnings per share is calculated by dividing net income (Group share) by the fully-diluted weighted-average number of common shares outstanding during the period. Treasury shares held by the parent company, TOTAL SE are deducted from consolidated shareholders’ equity. These shares are not considered outstanding for purposes of this calculation which also takes into account the dilutive effect of share subscription or purchase options plans, share grants and capital increases with a subscription period closing after the end of the fiscal year.
The weighted-average number of fully-diluted shares is calculated in accordance with the treasury stock method provided for by IAS 33. The proceeds, which would be recovered in the event of an exercise of rights related to dilutive instruments, are presumed to be a share buyback at the average market price over the period. The number of shares thereby obtained leads to a reduction in the total number of shares that would result from the exercise of rights.
In compliance with IAS 33, earnings per share and diluted earnings per share are based on the net income after deduction of the remuneration due to the holders of deeply subordinated notes.
The variation of both weighted-average number of shares and weighted-average number of diluted shares respectively, as of December 31, respectively used in the calculation of earnings per share and fully-diluted earnings per share is detailed as follows:
Number of shares as of January 1,
TOTAL shares held by TOTAL SE or by its subsidiaries and deducted from shareholders' equity
Evolution of the number of shares during the financial year (pro-rated)
157,153
1,351,465
Final grant of TOTAL performance shares
2,154,064
2,140,576
2,039,729
Capital increase reserved for employees
7,689,476
5,860,947
6,236,593
Capital increase as payment of the scrip dividend
17,445,857
12,360,894
26,352,572
81,268,828
Buyback of TOTAL treasury shares including:
(11,669,489)
(27,026,481)
(30,405,112)
Shares repurchased in during the fiscal year to cancel the dilution caused by the scrip dividend payment and within the framework of the share buyback program
(10,666,710)
(24,818,443)
(30,102,242)
Shares repurchased in during the fiscal year to cover for the performance share plans
(1,002,779)
(2,208,038)
(302,870)
WEIGHTED-AVERAGE NUMBER OF SHARES
Dilutive effect
Grant of TOTAL share subscription or purchase options
33,636
296,830
Grant of TOTAL performance shares
14,593,030
13,794,896
Capital increase reserved for employees(a)
1,759,407
2,167,784
WEIGHTED-AVERAGE NUMBER OF DILUTED SHARES AS OF DECEMBER 31,(b)
(a) Including the capital increase in consideration to the deferred contribution pursuant to the capital increase reserved for employees.
(b) In 2020, the effect generated by the grant of TOTAL performance shares and by the capital increase reserved for employees (19,007,836 shares) is anti-dilutive. In accordance with IAS 33, the weighted-average number of diluted shares is therefore equal to the weighted-average number of shares.
Earnings per share in euros
The earnings per share in euros, converted from the earnings per share in dollars, by using the average exchange rate euro/dollar, is €(2.54) per share for 2020 closing (€3.75 for 2019 closing). The fully-diluted earnings per share calculated by using the same method is €(2.54) per share for 2020 closing (€3.72 for 2019 closing).
The Board of Directors, on February 8, 2021, after approving the financial statements for the 2020 fiscal year, decided to propose to the Shareholders’ Meeting on May 28, 2021 the payment of a €2.64 dividend per share for the fiscal year 2020. Subject to the Shareholders’ decision, considering the first three interim dividends already decided by the Board of Directors, the final dividend for the fiscal year 2020 will be €0.66 per share.
2020 Dividend
First interim
Second interim
Third interim
Final
€0.66
Set date
May 4, 2020
July 29, 2020
October 29, 2020
May 28, 2021
Ex-dividend date
September 25, 2020
January 4, 2021
March 25, 2021
June 24, 2021
Payment date
October 2, 2020
January 11, 2021
April 1, 2021
July 1, 2021
F-50
Issuances of perpetual subordinated notes
On 25 January 2021, TOTAL SE issued two tranches of perpetual subordinated notes in euro:
In 2020, TOTAL SE issued perpetual subordinated notes in euro:
In parallel with this issuance, TOTAL SE partially tendered perpetual 2.250% subordinated notes issued in 2015 (of which the outstanding nominal amount before the operation was €1,000 million following a first partial tender executed in April 2019) for an amount of €703 million. Following this transaction, the new nominal amount of the tendered tranche was €297 million and the Group’s total outstanding amount of perpetual subordinated notes rose temporarily by €297 million. This residual amount was fully repaid in February 2021 on its first call date.
In 2019, TOTAL SE issued perpetual subordinated notes in euro:
-Deeply subordinated notes 1.750% perpetual maturity callable after 5 years (€1,500 million).
In parallel with this issuance, TOTAL SE partially tendered perpetual 2.250% subordinated notes issued in 2015 for an amount of €1,500 million. Following this transaction, the new nominal amount of the tranche tendered was €1,000 million and the Group’s total outstanding amount of perpetual subordinated notes remained unchanged.
In 2018 and 2017, TOTAL SE did not issue any perpetual subordinated notes.
In 2016, TOTAL SE issued three tranches of perpetual subordinated notes in euro:
In 2015, TOTAL SE issued two tranches of perpetual subordinated notes in euro:
Based on their characteristics (mainly no mandatory repayment and no obligation to pay a coupon except under certain circumstances specified into the documentation of the notes) and in compliance with IAS 32 standard – Financial instruments - Presentation, these notes were recorded in equity.
As of December 31, 2020, the amount of perpetual deeply subordinated notes booked in the Group shareholders' equity is $10,667 million. The coupons attributable to the holders of these securities are recognized as a deduction from the Group shareholders' equity for an amount of $308 million for fiscal year 2020 closing. The tax saving due to these coupons is booked in the statement of income.
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Detail of other comprehensive income showing both items potentially reclassifiable and those not potentially reclassifiable from equity to net income is presented in the table below:
Sub-total items not potentially reclassifiable to profit & loss
– Unrealized gain/(loss) of the period
(4,607)
1,238
– Less gain/(loss) included in net income
(175)
(552)
138
(57)
(1,841)
421
(495)
45
Sub-total items potentially reclassifiable to profit & loss
TOTAL OTHER COMPREHENSIVE INCOME, NET AMOUNT
The currency translation adjustment by currency is detailed in the following table:
Pound
Euro
sterling
Ruble
currencies
(4,668)
115
Currency translation adjustment of equity affiliates
(1,657)
(851)
(11)
(886)
TOTAL CURRENCY TRANSLATION ADJUSTMENT RECOGNIZED IN COMPREHENSIVE INCOME
1,239
2,022
(898)
636
607
(186)
(748)
131
537
1,883
(431)
(329)
(564)
343
(805)
(3,473)
(1,796)
(417)
(815)
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Tax effects relating to each component of other comprehensive income are as follows:
Pre-tax
Tax
amount
effect
(165)
551
140
7,862
(1,583)
(4,034)
79
(397)
(6,769)
547
TOTAL OTHER COMPREHENSIVE INCOME
1,093
137
(1,036)
(3,521)
As of December 31, 2020, no subsidiary has non-controlling interests that would be material to the Group financial statements.
9.2 Share-based payments
TOTAL SE may grant employees share subscription or purchase options plans, restricted share plans and offer its employees the opportunity to subscribe to reserved capital increases. These employee benefits are recognized as expenses with a corresponding credit to shareholders’ equity.
The expense is equal to the fair value of the instruments granted. The expense is recognized on a straight-line basis over the period in which the advantages are acquired.
The fair value of the options is calculated using the Black-Scholes model at the grant date.
For restricted share plans, the fair value is calculated using the market price at the grant date after deducting the expected distribution rate during the vesting period. The global cost is reduced to take into account the non-transferability over a 2-year holding period of the shares that could be awarded.
The number of allocated equity instruments can be revised during the vesting period in cases of non-compliance with performance conditions, with the exception of those related to the market, or according to the rate of turnover of the beneficiaries.
The cost of employee-reserved capital increases is immediately expensed.
The cost of the capital increase reserved for employees consists of the cost related to the discount on the shares subscribed using the classic and/or the leveraged schemes, the cost of the free shares and the opportunity gain for the shares subscribed using the leveraged scheme, as applicable. This opportunity gain corresponds to the benefit of subscribing to the leveraged offer, rather than reproducing the same economic profile through the purchase of options in the market for individual investors.
The global cost is reduced to take into account the non-transferability of the shares that are subscribed by the employees over a period of five years.
F-53
A. TOTAL share subscription or purchase option plans
Weighted
average
2010 Plan
2011 Plan
exercise price
Date of the shareholders’ meeting
5/21/2010
Award date (a)
9/14/2010
9/14/2011
Strike price
38.20
€
33.00
Expiry date
9/14/2018
9/14/2019
Number of options
Existing options as of January 1, 2018
1,950,372
490,568
2,440,940
37.15
Granted
Cancelled(b)
(79,139)
Exercised
(1,871,233)
(225,338)
(2,096,571)
37.64
Existing options as of January 1, 2019
265,230
(1,000)
(264,230)
Existing options as of January 1, 2020
n/a
Options granted as part of 2010 and 2011 Plans were exercisable, subject to a presence condition, after a 2-year period from the date of the Board meeting awarding the options and have expired eight years after this date. The underlying shares were not transferable during four years from the date of grant. The transfer restriction period did not apply to employees of non-French subsidiaries as of the date of the grant, who may have transferred the underlying shares after a 2-year period from the date of the grant.
The Combined General Meeting of May 29, 2020 authorised the Board of Directors, for a period of thirty-eight months to grant share subscription or purchase options. Since the 2011 Plan, the Board of Directors has not decided any new grant of TOTAL share subscription or purchase option plan. All the option plans have expired.
B. TOTAL performance share plans
2015
5/16/2014
5/24/2016
6/1/2018
1/6/2018
Award date
7/28/2015
7/27/2016
7/26/2017
3/14/2018
3/13/2019
3/18/2020
Date of the final award (end of the vesting period)
7/29/2018
7/28/2019
7/27/2020
3/15/2021
3/14/2022
3/20/2023
Transfer authorized as from
7/29/2020
7/29/2021
7/28/2022
3/16/2023
3/15/2024
3/21/2025
Grant date IFRS 2 fair value
35.90
35.37
35.57
36.22
40.11
12.40
Number of performance shares
Outstanding as of January 1, 2018
4,697,305
5,607,100
5,679,039
15,983,444
Notified
6,083,145
Cancelled
(621,568)
(61,840)
(26,640)
(12,350)
(722,398)
Finally granted
(4,075,737)
(2,040)
(1,480)
(4,079,257)
Outstanding as of January 1, 2019
5,543,220
5,650,919
6,070,795
17,264,934
6,447,069
(1,267,392)
(41,220)
(41,260)
(39,246)
(1,389,118)
(4,275,828)
(1,840)
(1,100)
(180)
(4,278,948)
Outstanding as of January 1, 2020
5,607,859
6,028,435
6,407,643
18,043,937
6,727,352
(1,313,687)
(55,830)
(44,289)
(18,691)
(1,432,497)
(4,294,172)
(10,740)
(10,890)
(1,773)
(4,317,575)
OUTSTANDING AS OF DECEMBER 31, 2020
5,961,865
6,352,464
6,706,888
19,021,217
The performance shares, which are bought back by the TOTAL SE on the market, are finally granted to their beneficiaries after a 3-year vesting period, from the date of the grant. The final grant is subject to a continued employment condition as well as:
-two performance conditions for the 2015 to 2018 Plans,
-three performance conditions for the 2019 Plan, and
-four performance conditions for the 2020 Plan.
F-54
Moreover, the transfer of the performance shares finally granted will not be permitted until the end of a 2-year holding period from the date of the final grant.
2020 Plan
On March 18, 2020, the Board of Directors granted performance shares to certain employees and executive directors of the Company or Group companies, subject to the fulfilment of the continued employment condition and four performance conditions.
The presence condition applies to all shares.
The performance conditions apply differently depending of the capacity of the beneficiaries. If all shares granted to senior executives are subject to performance conditions, the grant of the first 150 shares to non-senior executive are not subject to the performance condition abovementioned, which will, nonetheless, apply to any shares granted above this threshold.
The definitive number of granted shares will be based on the TSR (Total Shareholder Return), the annual variation of the net cash flow by share in dollars, the pre-dividend organic cash breakeven, as well as the change in the greenhouse gas emissions (GHG) on operated oil & gas facilities, for fiscal years 2020, 2021 and 2022, applied as follows:
Based on the ranking, a grant rate will be determined for each year for these two first criteria:
Ranking
Grant rate
1st place
180%
2nd place
130%
3rd place
4th and 5th places
0%
A grant rate will be determined for each year.
For each of the four criteria, the average of the three grant rates obtained (for each of the three fiscal years for which the performance conditions are assessed) will be rounded to the nearest 0.1 whole percent (0.05% being rounded to 0.1%) and capped at 100%.
Each criterion will have a weight of 1/4 in the definitive grant rate. The definitive grant rate will also be rounded to the nearest 0.1 whole percent (0.05% being rounded to 0.1%). The number of shares definitively granted, after confirmation of the performance conditions, will be rounded up to the nearest whole number of shares in case of a fractional share.
C. SunPower Plans
During fiscal year 2020, SunPower had one stock incentive plan: the SunPower Corporation 2015 Omnibus Incentive Plan ("2015 Plan"). The 2015 Plan was adopted by SunPower’s Board of Directors in February 2015 and approved by shareholders in June 2015.The 2015 Plan allows for the grant of options, as well as grant of stock appreciation rights, restricted stock grants, restricted stock units and other equity rights. The 2015 Plan also allows for tax withholding obligations related to stock option exercises or restricted stock awards to be satisfied through the retention of shares otherwise released upon vesting.
The 2015 Plan includes an automatic annual increase mechanism equal to the lower of three percent of the outstanding shares of all classes of SunPower’s common stock measured on the last day of the immediately preceding fiscal year, 6 million shares, or such other number of shares as determined by SunPower’s Board of Directors. In fiscal year 2015, SunPower’s Board of Directors voted to reduce the stock incentive plan’s automatic increase from 3% to 2% for 2016. As of December 31, 2020, approximately 18.0 million shares were available for grant under the 2015 Plan.
Incentive stock options, nonstatutory stock options, and stock appreciation rights may be granted at no less than the fair value of the common stock on the date of grant. The options and rights become exercisable when and as determined by SunPower’s Board of Directors, although these terms generally do not exceed ten years for stock options. SunPower has not granted stock options since fiscal year 2008. All previously granted stock options have been exercised or expired and accordingly no options remain outstanding. Under the 2015 Plan, the restricted stock grants and restricted stock units typically vest in equal installments annually over three or four years.
F-55
The majority of shares issued are net of the minimum statutory withholding requirements that SunPower pays on behalf of its employees. During fiscal years 2020, 2019, and 2018, SunPower withheld 1.3 million, 0.8 million, and 0.7 million shares, respectively, to satisfy the employees' tax obligations. SunPower pays such withholding requirements in cash to the appropriate taxing authorities. Shares withheld are treated as common stock repurchases for accounting and disclosure purposes and reduce the number of shares outstanding upon vesting.
There were no options outstanding and exercisable as of December 31, 2020. The intrinsic value of the options exercised in fiscal years 2020, 2019, and 2018, were zero. There were no stock options granted in fiscal years 2020, 2019, and 2018.
The following table summarizes SunPower’s restricted stock activities:
Restricted Stock Awards and Units
Weighted-Average Grant Date
Fair Value Per Share
Shares (in thousands)
(in dollars) (a)
Outstanding as of January 1st, 2018
7,293
11.83
4,449
7.77
Vested (b)
(2,266)
14.45
Forfeited
(1,816)
10.10
Outstanding as of January 1st, 2019
7,660
9.11
5,430
6.82
(2,460)
9.65
(1,304)
8.28
Outstanding as of January 1st, 2020
9,326
7.75
12,797
11.10
(3,596)
9.88
(11,360)
7.07
7,167
13.75
D. Share-based payment expense
Share-based payment expense before tax was broken down as follows:
Total restricted shares plans
176
180
SunPower plans
214
233
315
The main assumptions used for the valuation of the cost of the capital increase reserved for employees in 2020 were the following:
Date of the Board of Directors meeting that decided the issue
September 18, 2019
Reference price (€) (a)
32.75
Subscription price (€) (b)
26.20
Number of shares issued (in millions) (c)
13.16
Risk free interest rate over five years (%)
(0.392)
Employees loan financing rate (%) (d)
4.73
Non transferability cost (% of the reference's share price)
19.27
F-56
Note 10
10.1 Employee benefits obligations
In accordance with the laws and practices of each country, the Group participates in employee benefit plans offering retirement, death and disability, healthcare and special termination benefits. These plans provide benefits based on various factors such as length of service, salaries, and contributions made to the governmental bodies responsible for the payment of benefits.
These plans can be either defined contribution or defined benefit pension plans and may be entirely or partially funded with investments made in various non-Group instruments such as mutual funds, insurance contracts, and other instruments.
For defined contribution plans, expenses correspond to the contributions paid.
Defined benefit obligations are determined according to the Projected Unit Method. Actuarial gains and losses may arise from differences between actuarial valuation and projected commitments (depending on new calculations or assumptions) and between projected and actual return of plan assets. Such gains and losses are recognized in the statement of comprehensive income, with no possibility to subsequently recycle them to the income statement.
The past service cost is recorded immediately in the statement of income, whether vested or unvested.
The net periodic pension cost is recognized under “Other operating expenses”.
Liabilities for employee benefits obligations consist of the following:
Pension benefits liabilities
3,111
2,651
2,545
Other benefits liabilities
700
742
669
Restructuring reserves (early retirement plans)
106
Net liabilities relating to assets held for sale
Description of plans and risk management
The Group operates, for the benefit of its current and former employees, both defined benefit plans and defined contribution plans.
The Group recognized a charge of $135 million for defined contribution plans in 2020 ($133 million in 2019 and $130 million in 2018).
The Group’s main defined benefit pension plans are located in France, the United Kingdom, the United States, Belgium and Germany. Their main characteristics, depending on the country-specific regulatory environment, are the following:
The pension benefits include also termination indemnities and early retirement benefits. The other benefits are employer contributions to post-employment medical care.
In order to manage the inherent risks, the Group has implemented a dedicated governance framework to ensure the supervision of the different plans. These governance rules provide for:
F-57
Notes 10
Change in benefit obligations and plan assets
The fair value of the defined benefit obligation and plan assets in the Consolidated Financial Statements is detailed as follows:
Pension benefits
Other benefits
Change in benefit obligation
Benefit obligation at beginning of year
12,285
11,501
12,872
705
Current service cost
Interest cost
217
295
296
Past service cost
Settlements
(141)
Plan participants' contributions
Benefits paid
(702)
(667)
(902)
(27)
Actuarial losses / (gains)
818
847
Foreign currency translation and other
729
Benefit obligation at year-end
13,591
Of which plans entirely or partially funded
12,830
11,584
10,864
Of which plans not funded
761
701
Change in fair value of plan assets
Fair value of plan assets at beginning of year
(9,769)
(9,145)
(10,205)
(255)
(745)
424
129
Plan participants’ contributions
Employer contributions
(172)
622
573
(488)
Fair value of plan assets at year-end
(10,580)
UNFUNDED STATUS
3,011
2,516
2,356
Asset ceiling
34
NET RECOGNIZED AMOUNT
3,047
2,550
2,384
Pension benefits and other benefits liabilities
(101)
(161)
Net benefit liabilities relating to assets held for sale
As of December 31, 2020, the contribution from the main geographical areas for the net pension liability in the balance sheet is: 69% for the Euro area, 15% for the United Kingdom and 12% for the United States.
The amounts recognized in the consolidated income statement and the consolidated statement of comprehensive income for defined benefit plans are detailed as follows:
Net interest cost
Benefit amounts recognized on Profit & Loss
247
258
- Actuarial (Gains) / Losses
* Effect of changes in demographic assumptions
(166)
* Effect of changes in financial assumptions
1,071
* Effect of experience adjustments
(59)
(17)
* Actual return on plan assets
- Effect of asset ceiling
Benefit amounts recognized on Equity
41
TOTAL BENEFIT AMOUNTS RECOGNIZED ON COMPREHENSIVE INCOME
563
351
299
Expected future cash outflows
The average duration of accrued benefits is approximately 14 years for defined pension benefits and 17 years for other benefits. The Group expects to pay contributions of $228 million in respect of funded pension plans in 2021.
F-58
Estimated future benefits either financed from plan assets or directly paid by the employer are detailed as follows:
Estimated future payments
2021
2022
502
2023
2024
2025
392
2026-2030
2,243
130
Type of assets
Asset allocation
Equity securities
24%
Debt securities
45%
46%
47%
Monetary
2%
1%
Annuity contracts
20%
Real estate
8%
Investments on equity and debt markets are quoted on active markets.
Main actuarial assumptions and sensitivity analysis
Assumptions used to determine benefits obligations
Discount rate (weighted average for all regions)
1.28%
1.84%
2.68%
1.41%
1.71%
2.56%
Of which Euro zone
0.52%
0.73%
1.72%
0.68%
0.94%
1.87%
Of which United States
2.50%
3.25%
4.00%
Of which United Kingdom
1.50%
2.25%
3.00%
Inflation rate (weighted average for all regions)
2.06%
2.20%
2.44%
1.24%
1.21%
3.50%
The discount rate retained is determined by reference to the high quality rates for AA-rated corporate bonds for a duration equivalent to that of the obligations. It derives from a benchmark per monetary area of different market data at the closing date.
Sensitivity to inflation in respect of defined benefit pension plans is not material in the United States.
A 0.5% increase or decrease in discount rates – all other things being equal - would have the following approximate impact on the benefit obligation:
0.5% Increase
0.5% Decrease
Benefit obligation as of December 31, 2020
(908)
A 0.5% increase or decrease in inflation rates – all other things being equal - would have the following approximate impact on the benefit obligation:
(568)
F-59
Notes 10 and 11
10.2 Payroll and staff
op
Personnel expenses (M$)
Wages and salaries (including social charges)
8,908
8,922
9,099
Group employees at December 31,
France (DROM COM includ.)
● Management
14,016
13,848
13,484
● Other
21,886
22,831
22,929
International
17,102
16,821
16,856
52,472
54,276
51,191
105,476
107,776
104,460
The number of employees includes only employees of fully consolidated subsidiaries.
2019 and 2018 data were restated to show number of employees of France including DROM COM (overseas departments, regions and communities).
Income taxes disclosed in the statement of income include the current tax expenses (or income) and the deferred tax expenses (or income).
Current tax expenses (or income) are the estimated amount of the tax due for the taxable income of the period.
Deferred income taxes are recorded based on the temporary differences between the carrying amounts of assets and liabilities recorded in the balance sheet and their tax bases, and on carry-forwards of unused tax losses and tax credits.
Deferred tax assets and liabilities are measured using the tax rates that have been enacted or substantially enacted at the balance sheet date. The tax rates used depend on the timing of reversals of temporary differences, tax losses and other tax credits. The effect of a change in tax rate is recognized either in the Consolidated Statement of Income or in shareholders’ equity depending on the item it relates to.
Deferred tax resulting from temporary differences between the carrying amounts of equity-method investments and their tax bases are recognized. The deferred tax calculation is based on the expected future tax effect (dividend distribution rate or tax rate on capital gains).
Income taxes are detailed as follows:
Current income taxes
(2,450)
(5,469)
(6,971)
2,132
(403)
455
TOTAL INCOME TAXES
Before netting deferred tax assets and liabilities by fiscal entity, the components of deferred tax balances are as follows:
Net operating losses and tax carry forwards
5,106
3,752
1,004
970
995
Other temporary non-deductible provisions
8,660
8,409
Differences in depreciations
(14,641)
(16,029)
(15,469)
Other temporary tax deductions
(3,847)
(2,995)
(2,541)
NET DEFERRED TAX LIABILITY
(3,310)
(5,642)
(4,827)
The reserves of TOTAL subsidiaries that would be taxable if distributed but for which no distribution is planned, and for which no deferred tax liability has therefore been recognized, totaled $10,155 million as of December 31, 2020.
Deferred tax assets not recognized as of December 31, 2020 amount to $4,631 million as their future recovery was not regarded as probable given the expected results of the entities. Particularly in the Exploration & Production segment, when the affiliate or the field concerned is in its exploration phase, the net operating losses created during this phase will be useable only if a final investment and development decision is made. Accordingly, the time limit for the utilization of those net operating losses is not known.
Deferred tax assets not recognized relate notably to Canada for an amount of $1,371 million, to France for an amount of $1,197 million and to United States for an amount of $307 million.
F-60
Note 11
After netting deferred tax assets and liabilities by fiscal entity, deferred taxes are presented on the balance sheet as follows:
Deferred tax assets
Deferred tax liabilities
(10,326)
(11,858)
(11,490)
NET AMOUNT
The net deferred tax variation in the balance sheet is analyzed as follows:
Opening balance
(5,622)
Deferred tax on income
Deferred tax on shareholders' equity (a)
Changes in scope of consolidation and others
(695)
CLOSING BALANCE
Reconciliation between provision for income taxes and pre-tax income:
318
5,872
6,516
Pre-tax income
(7,018)
17,310
18,066
French statutory tax rate
32.02%
34.43%
Theoretical tax charge
(5,960)
(6,220)
Difference between French and foreign income tax rates
(1,109)
(2,007)
(3,058)
Tax effect of equity in income (loss) of affiliates
1,080
Permanent differences
665
1,422
1,740
Adjustments on prior years income taxes
Adjustments on deferred tax related to changes in tax rates
Variation of deferred tax assets not recognized
(2,031)
INCOME TAXES IN THE STATEMENT OF INCOME
The French statutory tax rate includes the standard corporate tax rate (31.0%), additional and exceptional applicable taxes that bring the overall tax rate to 32.02% in 2020 (versus 34.43% in 2019 and 34.43% in 2018).
Permanent differences are mainly due to impairment of goodwill and to dividends from non-consolidated companies as well as the specific taxation rules applicable to certain activities.
Net operating losses and carried forward tax credits
Deferred tax assets related to carried forward tax credits on net operating losses expire in the following years:
90
2023(a)
1,423
2024(b)
1,310
2025 and after
1,643
Unlimited
3,359
2,277
2,126
F-61
Note 12
As of December 31, 2020 the schedule of deferred tax assets related to carried forward tax credits on net operating losses for the main countries is as follows:
United
Australia
States
Canada
Kingdom
1,084
536
956
1,101
12.1 Provisions and other non-current liabilities
A provision is recognized when the Group has a present obligation, legal or constructive, as a result of a past event for which it is probable that an outflow of resources will be required and when a reliable estimate can be made regarding the amount of the obligation. The amount of the liability corresponds to the best possible estimate.
Provisions and non-current liabilities are comprised of liabilities for which the amount and the timing are uncertain. They arise from environmental risks, legal and tax risks, litigation and other risks.
Litigations and accrued penalty claims
386
736
Provisions for environmental contingencies
960
14,492
14,286
Other non-current provisions
2,868
2,927
3,144
of which restructuring activities
293
134
of which financial risks related to non-consolidated and equity consolidated affiliates
100
of which contingency reserve on solar panels warranties (SunPower)
82
Other non-current liabilities
1,409
2,066
In 2020, litigation reserves amount to $320 million of which $208 million in the Exploration & Production, notably in Brazil and Angola.
In 2019, litigation reserves amounted to $386 million of which $286 million in the Exploration & Production, notably in Brazil, Angola and USA.
In 2018, litigation reserves amounted to $736 million of which $510 million was in the Exploration & Production, notably in Angola, Nigeria and Brazil.
Other non-current liabilities mainly include debts whose maturity is more than one year related to fixed assets acquisitions.
F-62
Changes in provisions and other non-current liabilities
Changes in provisions and other non-current liabilities are as follows:
January, 1st
Allowances
Reversals
December, 31
1,756
(1,378)
(518)
of which asset retirement obligations
(519)
of which provisions for environmental contingencies
of which provisions for restructuring of activities
(135)
1,248
639
15,986
4,927
33
Changes in the asset retirement obligation
Asset retirement obligations, which result from a legal or constructive obligation, are recognized based on a reasonable estimate during the period in which the obligation arises.
The associated asset retirement costs are capitalized as part of the carrying amount of the underlying asset and depreciated over the useful life of this asset.
An entity is required to measure changes in the liability for an asset retirement obligation due to the passage of time (accretion) by applying a risk-free discount rate to the amount of the liability. Given the long term nature of expenditures related to our asset retirement obligations, the rate is determined by reference to the high quality rates for AA-rated Corporate bonds on the USD area for a long-term horizon. The increase of the provision due to the passage of time is recognized as “Other financial expense”.
The discount rate used for the valuation of asset retirement obligation is 3% in 2020 and 4.5%in 2019 and 2018 (the expenses are estimated at current currency values with an inflation rate of 1.5% in 2020, and of 2% in 2019 and 2018).
A decrease of 0.5% of this rate would increase the asset retirement obligation by $1,442 million, with a corresponding impact in tangible assets, and with a negative impact of approximately $78 million on the following years net income. Conversely, an increase of 0.5% would have a nearly symmetrical impact compared to the effect of the decrease of 0.5%.
Changes in the asset retirement obligation are as follows:
Spending on
Revision in
New
existing
Accretion
estimates
obligations
526
(109)
(601)
567
12,240
811
1,847
12.2 Other risks and contingent liabilities
TOTAL is not currently aware of any exceptional event, dispute, risks or contingent liabilities that could have a material impact on the assets and liabilities, results, financial position or operations of the Group.
F-63
Note 13
13.1 Off balance sheet commitments and contractual obligations
Maturity and installment plants
Less than 1
Between 1
More than 5
and 5 years
years
Non-current debt obligations net of hedging instruments (Note 15)
22,745
Current portion of non-current debt obligations net of hedging instruments (Note 15)
Lease obligations (Note 13.2)
3,178
Asset retirement obligations (Note 12)
1,840
Contractual obligations recorded in the balance sheet
77,690
6,344
27,763
43,583
Lease obligations for low value assets, short term contracts or not yet commenced (Note 13.2)
626
Purchase obligations
39,126
Contractual obligations not recorded in the balance sheet
144,922
12,423
39,752
92,747
TOTAL OF CONTRACTUAL OBLIGATIONS
67,515
Guarantees given to customs authorities
2,312
2,189
Guarantees given on borrowings
14,164
3,660
9,758
Indemnities related to sales of businesses
333
179
Guarantees of current liabilities
147
Guarantees to customers / suppliers
19,182
2,603
1,853
14,726
Letters of credit
2,432
2,297
Other operating commitments
23,879
3,002
17,653
TOTAL OF OTHER COMMITMENTS GIVEN
62,449
11,306
8,766
42,377
Mortgages and liens received
Sales obligations
80,521
7,001
29,362
44,158
Other commitments received
20,401
15,270
3,657
TOTAL OF COMMITMENTS RECEIVED
100,999
22,299
30,860
47,840
Of which commitments given relating to joint ventures
34,920
7,288
26,988
Of which commitments given relating to associates
51,795
999
8,664
42,132
F-64
40,931
19,888
21,043
5,331
7,465
1,202
2,883
3,380
617
3,153
10,722
68,219
7,150
25,924
35,145
2,077
879
147,516
10,763
38,189
98,564
149,593
11,299
39,068
99,226
217,812
18,449
64,992
134,371
2,012
1,876
14,510
306
7,372
6,832
Guarantees related to sales of businesses
163
152
172
12,318
1,435
2,169
8,714
2,786
2,768
22,055
3,240
17,613
54,184
9,867
10,854
33,463
Assets received as collateral (security interests)
85
93,441
7,135
31,330
54,976
22,358
16,845
1,705
3,808
115,884
24,003
33,072
58,809
39,055
461
11,822
26,772
31,465
913
8,381
22,171
Maturity and installments
37,784
19,072
18,712
5,027
Finance lease obligations (Note 13.2)
1,878
213
468
1,197
844
3,388
10,054
58,975
6,084
22,928
29,963
Operating lease obligations (Note 13.2)
9,130
3,691
3,795
121,119
9,708
30,652
80,759
130,249
11,352
34,343
84,554
189,224
17,436
57,271
114,517
2,043
1,904
127
18,680
169
18,443
334
222
83
8,463
1,222
6,394
3,515
29,416
2,085
1,046
26,285
62,673
8,792
2,217
51,664
91,695
7,989
27,709
55,997
21,565
15,527
1,328
4,710
113,344
23,539
29,070
60,735
42,768
4,425
38,181
39,437
8,378
30,286
F-65
A. Contractual obligations
Debt obligations
“Non-current debt obligations” are included in the items “Non-current financial debt” and “Non-current financial assets” of the Consolidated Balance Sheet. It includes the non-current portion of swaps hedging bonds, and excludes non-current lease obligations of $7,736 million.
The current portion of non-current debt is included in the items “Current borrowings”, “Current financial assets” and “Other current financial liabilities” of the Consolidated Balance Sheet. It includes the current portion of swaps hedging bonds, and excludes the current portion of lease obligations of $1,207 million.
The information regarding contractual obligations linked to indebtedness is presented in Note 15 to the Consolidated Financial Statements.
Lease contracts
The information regarding leases is presented in Note 13.2 to the Consolidated Financial Statements.
This item represents the discounted present value of Exploration & Production and Integrated Gas, Renewables & Power asset retirement obligations, primarily asset removal costs at the completion date. The information regarding contractual obligations linked to asset retirement obligations is presented in Note 12 to the Consolidated Financial Statements.
Purchase obligations are obligations under contractual agreements to purchase goods or services, including capital projects. These obligations are enforceable and legally binding on the company and specify all significant terms, including the amount and the timing of the payments.
These obligations mainly include: unconditional hydrocarbon purchase contracts (except where an active, highly-liquid market exists and when the hydrocarbons are expected to be re-sold shortly after purchase) in the Integrated Gas, Renewables & Power segment, reservation of transport capacities in pipelines, unconditional exploration works and development works in the Exploration & Production segment, and contracts for capital investment projects in the Refining & Chemicals segment.
B. Other commitments given
These consist of guarantees given by the Group to customs authorities in order to guarantee the payments of taxes and excise duties on the importation of oil and gas products, mostly in France.
The Group guarantees bank debt and lease obligations of certain non-consolidated subsidiaries and equity affiliates. Maturity dates vary, and guarantees will terminate on payment and/or cancellation of the obligation. A payment would be triggered by failure of the guaranteed party to fulfill its obligation covered by the guarantee, and no assets are held as collateral for these guarantees. As of December 31, 2020, the maturities of these guarantees are up to 2053.
As of December 31, 2020, the guarantees provided by TOTAL SE in connection with the financing of the Ichthys LNG project amount to $4,912 million. As of December 31, 2019, the guarantees amounted to $4,937 million.
As of December 31, 2020, the guarantees provided by TOTAL SE in connection with the financing of the Yamal LNG project for an amount of $3,250 million by TOTAL SE. As of December 31, 2019, the guarantees amounted to $3,688 million.
As of December 31, 2020, TOTAL SE has confirmed guarantees for TOTAL Refining SAUDI ARABIA SAS shareholders' advances for an amount of $1,164 million. As of December 31, 2019, the guarantees amounted to $1,184 million.
As of December 31, 2020, the guarantee given in 2008 by TOTAL SE in connection with the financing of the Yemen LNG project amounts to $509 million as in 2019.
As of December 31, 2020, guarantees provided by TOTAL SE in connection with the financing of the Bayport Polymers LLC project, amount to $1,820 million as in 2019.
In the ordinary course of business, the Group executes contracts involving standard indemnities for the oil industry and indemnities specific to transactions such as sales of businesses. These indemnities might include claims against any of the following: environmental, tax and shareholder matters, intellectual property rights, governmental regulations and employment-related matters, and commercial contractual relationships. Performance under these indemnities would generally be triggered by a breach of terms of the contract or by a third party claim. The Group regularly evaluates the probability of having to incur costs associated with these indemnities.
Other guarantees given
Non-consolidated subsidiaries
The Group also guarantees the current liabilities of certain non-consolidated subsidiaries. Performance under these guarantees would be triggered by a financial default of the entity.
F-66
Operating agreements
As part of normal ongoing business operations and consistent with generally accepted industry practices, the Group enters into numerous agreements with other parties. These commitments are often entered into for commercial purposes, for regulatory purposes or for other operating agreements.
C. Commitments received
These amounts represent binding obligations to sell goods, including in particular hydrocarbon sales contracts (except where an active, highly-liquid market exists and when the volumes are expected to be re-sold shortly after purchase).
13.2 Lease contracts
A lease contract is a contract that grants lessee the right to use an identified asset for a specified period of time in exchange for consideration. At lease inception, an asset corresponding to right of use and a debt are recognized in the lessee’s balance sheet. Carrying value of right of use corresponds to present value of future lease payments plus any direct costs incurred for concluding the contract. Lease debt is recorded as a liability in the balance sheet under financial debts. Rights of use are depreciated over the useful lives applied by the Group.
Leases that are of short duration or that relate to low value assets are not recorded in the balance sheet, in accordance with the exemptions in the standard. They are presented as off-balance sheet commitments.
As part of the first application of IFRS 16 "Leases" as of January 1, 2019, the Group:
The impact of the application of this standard as at January 1, 2019 is $5,698 million on fixed assets, $(5,505) million on net debt and $(193) million on other assets and liabilities. The weighted average incremental borrowing rate of 4.5% at transition date was determined on the basis of the initial duration of the contracts.
In 2019, the impact on fixed assets was broken down as follows:
(in M$)
Right of use of buildings
2,278
Right of use of machinery, plant and equipment (including transportation equipment)
2,632
Other right of use
788
5,698
The Group mainly leases real estate, retail stations, ships, and other equipment (see Note 7 to the Consolidated Financial Statements).
F-67
A-Reconciliation between the operating lease commitments disclosed under IAS17 at December 31, 2018 and the additional lease liabilities (IFRS 16) recognized on the balance sheet at January 1, 2019
Reconciliation between the operating lease commitments disclosed under IAS 17 at December 31, 2018 and the additional lease liabilities (IFRS 16) recognized on the balance sheet at January 1, 2019
The reconciliation is as follows:
M$
Operating lease commitments at December 31, 2018
Commitments relating to IFRS 16 exemptions:
- Low value assets
(90)
- Short-term leases
(327)
Leases not yet commenced at January 1, 2019
Commitments relating to service component of lease contracts
(760)
Commitments relating to leases of non identified assets or substitute assets
Variable lease payments
Other impacts
204
Impact of discounting
(1,360)
ADDITIONAL LEASE LIABILITY ON CONTRACTS PREVIOUSLY ACCOUNTED FOR AS OPERATING LEASES
5,555
Finance lease liability at December 31, 2018
TOTAL LEASE LIABILITY AT JANUARY 1, 2019
7,433
Other information required on lease debts, notably their maturity, is presented in Note 15 to the consolidated financial statements.
B-The future minimum lease payments on leases to which the Group is committed
The future minimum lease payments on leases to which the Group is committed are as follows:
Leases recorded in
Exempted contracts
balance sheet
1,659
1,366
1,117
1,022
97
964
2026 and beyond
6,325
Total minimum payments
12,453
Less financial expenses
(3,510)
Nominal value of contracts
Less current portion of lease contracts
(1,207)
NON-CURRENT LEASE LIABILITIES
7,736
1,586
360
212
1,019
835
766
2025 and beyond
4,757
(2,726)
(1,202)
6,263
F-68
Operating leases
Finance leases
263
1,282
183
967
182
772
2024 and beyond
3,796
1,826
(934)
Less current portion of finance lease contracts
(213)
NON-CURRENT FINANCE LEASE LIABILITIES
1,665
For the year ended December 31, 2020, rental expense recorded in the income statement and incurred under short term leases or low value assets leases and under variable lease payments is $600million and $162 million, respectively.
For the year ended December 31, 2019, rental expense recorded in the income statement and incurred under short term leases or low value assets leases and under variable lease payments is $366 million and $132 million, respectively.
Rental expense recorded in the income statement and incurred under operating leases for the year ended December 31, 2018 is $1,304 million.
F-69
Note 14
The financial assets and liabilities disclosed in the balance sheet are detailed as follows:
Fair value through
Comprehensive
Fair value of
Assets / (Liabilities)
Amortized cost
P&L
Income
hedging instruments
Fair value
Equity affiliates: loans
541
3,221
2,745
Accounts receivable, net(b)
6,615
1,428
4,547
Total financial assets
65,391
3,258
72,671
Total non-financial assets
193,461
Non-current financial debt(a)
(58,470)
(1,615)
(60,203)
(66,210)
Accounts payable(b)
(23,574)
(10,635)
(3,666)
(14,302)
Current borrowings(a)
(17,099)
(17,121)
(203)
Total financial liabilities
(109,778)
(3,883)
(1,720)
(115,381)
(121,410)
Total non-financial liabilities
(150,751)
(266,132)
512
2,314
6,713
4,791
3,870
62,900
6,421
514
70,341
202,953
(46,035)
(1,694)
(47,773)
(50,921)
(28,394)
(10,927)
(5,333)
(16,262)
(14,819)
(63)
(487)
(100,175)
(5,440)
(107,735)
(110,883)
(165,559)
(273,294)
F-70
OCI - equity
instruments
instruments hedge
2,348
6,994
3,536
62,810
3,930
666
67,768
188,994
(38,220)
(1,880)
(40,129)
(41,281)
(26,134)
(9,854)
(3,429)
(13,286)
(13,306)
(183)
(295)
(478)
(87,514)
(3,641)
(2,178)
(93,333)
(94,485)
(163,429)
(256,762)
F-71
Note 15
15.1 Financial debt and derivative financial instruments
A) Non-current financial debt and derivative financial instruments
(Assets) / Liabilities
Secured
Unsecured
7,849
52,354
of which hedging instruments of non-current financial debt (liabilities)
1,615
(1,019)
(3,762)
(4,781)
of which hedging instruments of non-current financial debt (assets)
(3,221)
NON-CURRENT NET FINANCIAL DEBT AND RELATED FINANCIAL INSTRUMENTS
6,830
48,592
55,422
Variable rate bonds or bonds after fair value hedge
16,553
Fixed rate bonds or bonds after cash flow hedge
28,080
Other floating rate debt
3,944
3,984
Other fixed rate debt
438
511
Lease obligations
Non-current financial assets excluding derivative financial instruments
(1,451)
Non-current instruments held for trading
6,438
41,335
1,694
(164)
(912)
(512)
NON-CURRENT FINANCIAL DEBT AND RELATED FINANCIAL INSTRUMENTS
6,274
40,587
46,861
19,340
20,499
690
103
425
(333)
1,870
38,259
1,880
(680)
(613)
37,579
39,449
20,570
15,672
621
848
Financial lease obligations
F-72
In April 2020, the Group put in place a new committed syndicated credit line with banking counterparties for an initial amount of USD 6,350 million and with a 12-month tenor (with the option to extend twice by a further 6 months at TOTAL's hand). As of December 31 2020, the remaining balance of the committed syndicated credit line is USD 3,646 million and is included in line item "Other floating rate debt" (in "Non-current financial debt").
The bonds, as of December 31, 2020, after taking into account currency and interest rates swaps fair value, is detailed as follows:
after
Bonds after fair value hedge or
hedging as of
Range
Range of initial current rate
variable rate bonds
Currency of
of current
before hedging
issuance
maturities
Bond
USD
6,253
6,276
2021 - 2028
2.218% - 3.883
750
CHF
410
2026 - 2029
0.176% - 0.298
NZD
AUD
378
699
2021 - 2025
4.000% - 4.250
EUR
8,666
9,675
10,212
2021 - 2044
0.250% - 3.125
CAD
GBP
1,522
2,035
1,536
2022 - 2031
1.405% - 2.250
472
HKD
128
2.920
Current portion (less than one year)
(2,699)
(3,661)
(3,679)
Principal financing entities(a)
14,658
17,438
18,666
TOTAL SE(b)
1,200
1,203
0.500
Other consolidated subsidiaries
695
TOTAL VARIABLE RATE BONDS OR BONDS AFTER FAIR VALUE HEDGE
Bonds after cash flow hedge or
fixed rate bonds
15,259
10,246
9,268
2024 - 2044
0.696 % - 5.125
11,524
8,565
5,040
2021 - 2060
2.829% - 4.250
208
187
2026
3.088
1,134
1,079
2024 - 2027
0.510% - 1.010
998
326
2024 - 2026
1.250% - 1.660
4.000
(1,500)
(1,250)
(946)
27,632
19,829
14,910
448
762
TOTAL BONDS AFTER CASH FLOW HEDGE OR FIXED RATE BONDS
F-73
Loan repayment schedule (excluding current portion)
of which hedging
Non-current
of non‑current
of non-current
financial debt and
Non‑current
financial debt
financial
related financial
(liabilities)
assets
(assets)
9,932
(142)
9,790
5,988
(218)
5,720
6,340
(395)
5,945
4,535
(260)
4,275
33,408
1,149
(2,456)
29,692
5,716
5,615
6,226
(121)
6,078
5,230
(18)
5,163
5,885
139
(87)
5,798
24,716
812
(509)
24,207
52
5,442
5,432
4,042
251
(76)
3,966
5,262
5,158
5,020
(37)
4,983
20,363
702
(453)
19,910
Analysis by currency and interest rate
These analyses take into account interest rate and foreign currency swaps to hedge non-current financial debt.
U.S. Dollar
48,609
43,276
38,120
2,639
1,103
Norwegian krone
81
Other currencies
3,597
865
199
Fixed rate
34,870
26,985
18,139
Floating rate
20,552
19,876
21,310
F-74
B) Current financial assets and liabilities
Current borrowings consist mainly of drawings on commercial papers or treasury bills and of bank loans. These instruments bear interest at rates that are close to market rates.
Current financial debt(a)
11,305
8,710
Current lease obligations
1,206
Current portion of non-current financial debt
4,588
4,907
4,990
Current borrowings (note 14)
Current portion of hedging instruments of debt (liabilities)
Other current financial instruments (liabilities)
99
Other current financial liabilities (note 14)
Current deposits beyond three months
(4,436)
(3,611)
(3,536)
Non-traded marketable securities
(114)
Financial receivables on sub-lease, current
Current portion of hedging instruments of debt (assets)
Other current financial instruments (assets)
Current financial assets (note 14)
(4,630)
(3,992)
(3,654)
NET CURRENT BORROWINGS
12,672
11,314
10,130
C) Cash flow from (used in) financing activities
The variations of financial debt are detailed as follows:
Non-cash changes
scope,
Reclassification
Cash
including IFRS 5
Foreign
Changes in
Non-current /
changes
reclassification
currency
Current
Non-current financial instruments - assets(a) and non-current financial assets
(2,729)
(974)
2,973
(8,711)
Non-current financial debt and related financial instruments
15,572
(8,593)
1,658
Current financial instruments - assets(a)
(194)
(6,679)
8,711
186
Current financial instruments - liabilities(a)
(287)
Current financial debt and related financial instruments
15,038
8,593
17,108
Financial debt and financial assets classified as held for sale
313
FINANCIAL DEBT
62,200
9,071
(462)
72,843
First
application
IFRS 16
(71)
8,110
4,805
484
(6,661)
1,685
(719)
413
(6,517)
(144)
(5,954)
6,661
13,666
6,517
(168)
53,115
2,302
5,505
136
370
1,225
F-75
Non-current financial instruments - assets(a)
(679)
4,708
(6,260)
(311)
40,661
11,096
230
270
(514)
6,260
245
10,918
297
269
Financial debt classified as held for sale
51,579
(3,341)
4,933
(357)
(a) Fair value or cash flow hedge instruments and other non-hedge debt-related derivative instruments.
Monetary changes in non-current financial debt are detailed as follows:
Issuance of non-current debt
16,075
8,668
3,938
Repayment of non-current debt
(538)
(3,289)
D) Cash and cash equivalents
Cash and cash equivalents are comprised of cash on hand and highly liquid short-term investments that are easily convertible into known amounts of cash and are subject to insignificant risks of changes in value.
Investments with maturity greater than three months and less than twelve months are shown under “Current financial assets”.
Changes in current financial assets and liabilities are included in the financing activities section of the Consolidated Statement of Cash Flows.
Cash and cash equivalents are detailed as follows:
14,518
16,456
15,186
Cash equivalents
16,750
10,896
12,721
Cash equivalents are mainly composed of deposits less than three months deposited in government institutions or deposit banks selected in accordance with strict criteria.
As of December 31, 2020, the cash and cash equivalents include $2,140 millions subject to restrictions, notably due to regulatory framework or to the fact they are owned by affiliates located in countries with exchange controls.
E) Net-debt-to-capital ratio
For its internal and external communication needs, the Group calculates a debt ratio by dividing its net financial debt excluding leases by its capital.
F-76
The ratio is calculated as follows: Net debt excluding leases / (Equity + Net debt excluding leases)
15,893
13,617
13,093
Current financial assets(a)
(4,519)
Net financial assets and liabilities held for sale or exchange
52,467
41,510
38,464
Non-current financial assets(a)
(31,268)
(27,352)
(27,907)
Net financial debt
29,327
23,968
19,779
Shareholders’ equity – Group share
NET-DEBT-TO-CAPITAL RATIO EXCLUDING LEASES
21.7
16.7
14.3
15.2) Fair value of financial instruments (excluding commodity contracts)
The Group uses derivative instruments to manage its exposure to risks of changes in interest rates, foreign exchange rates and commodity prices. These financial instruments are accounted for in accordance with IFRS 9, changes in fair value of derivative instruments are recognized in the statement of income or in other comprehensive income and are recognized in the balance sheet in the accounts corresponding to their nature, according to the risk management strategy. The derivative instruments used by the Group are the following:
- Cash management
Financial instruments used for cash management purposes are part of a hedging strategy of currency and interest rate risks within global limits set by the Group and are considered to be held for trading. Changes in fair value are systematically recorded in the statement of income. The balance sheet value of those instruments is included in “Current financial assets” or “Other current financial liabilities”.
- Long-term financing
When an external long-term financing is set up, specifically to finance subsidiaries, and when this financing involves currency and interest rate derivatives, these instruments are qualified as:
1) Fair value hedge of the interest rate and currency risks on the external debt financing the loans to subsidiaries. Changes in fair value of derivatives are recognized in the statement of income, as are changes in fair value of underlying financial debts and loans to subsidiaries.
The fair value of those hedging instruments of long-term financing is included in assets under “Non-current financial assets” or in liabilities under “Non-current financial debt “for the non-current portion. The current portion (less than one year) is accounted for in “Current financial assets” or “Other current financial liabilities”.
F-77
In case of the anticipated termination of derivative instruments accounted for as fair value hedges, the amount paid or received is recognized in the statement of income and:
● If this termination is due to an early cancellation of the hedged items, the adjustment previously recorded as revaluation of those hedged items is also recognized in the statement of income;
● If the hedged items remain in the balance sheet, the adjustment previously recorded as a revaluation of those hedged items is spread over the remaining life of those items.
In case of a change in the strategy of the hedge (fair value hedge to cash flow hedge), if the components of the initial aggregated exposure had already been designated in a hedging relationship (FVH), the Group designates the new instrument as a hedging instrument of an aggregated position (CFH) without having to end the initial hedging relationship.
2) Cash flow hedge when the Group implements a strategy of fixing interest rate and/or currency rate on the external debt. Changes in fair value are recorded in Other comprehensive Income for the effective portion of the hedging and in the statement of income for the ineffective portion of the hedging. When the hedged transaction affects profit or loss, the fair value variations of the hedging instrument recorded in equity are also symmetrically recycled to the income statement.
The fair value of those hedging instruments of long-term financing is included in assets under “Non-current financial assets” or in liabilities under “Non-current financial debt“ for the non-current portion. The current portion (less than one year) is accounted for in “Current financial assets” or “Other current financial liabilities”.
If the hedging instrument expires, is sold or terminated by anticipation, gains or losses previously recognized in equity remain in equity. Amounts are recycled to the income statement only when the hedged transaction affects profit or loss.
3) In compliance with IFRS9, the Group has decided to recognize in a separate component of the comprehensive income the variation of foreign currency basis spread (Cross Currency Swaps) identified in the hedging relationships qualified as fair value hedges and cash flow hedges.
- Foreign subsidiaries’ equity hedge
Certain financial instruments hedge against risks related to the equity of foreign subsidiaries whose functional currency is not the euro (mainly the dollar). These instruments qualify as “net investment hedges” and changes in fair value are recorded in other comprehensive income under "Currency translation" for the effective portion of the hedging and in the statement of income for the ineffective portion of the hedging. Gains or losses on hedging instruments previously recorded in equity, are reclassified to the statement of income in the same period as the total or partial disposal of the foreign activity.
The fair value of these instruments is recorded under “Current financial assets” and ”Other current financial liabilities”.
- Commitments to purchase shares held by non-controlling interests (put options written on minority interests)
Put options granted to non-controlling-interest shareholders are initially recognized as financial liabilities at the present value of the exercise price of the options with a corresponding reduction in shareholders’ equity. The financial liability is subsequently measured at fair value at each balance sheet date in accordance with contractual clauses and any variation is recorded in the statement of income (cost of debt).
A) Impact on the statement of income per nature of financial instruments
Assets and liabilities from financing activities
The impact on the statement of income of financing assets and liabilities mainly includes:
Financial derivative instruments used for cash management purposes (interest rate and foreign exchange) are considered to be held for trading. Based on practical documentation issues, the Group did not elect to set up hedge accounting for such instruments. The impact on income of the derivatives is offset by the impact of loans and current liabilities they are related to. Therefore these transactions taken as a whole do not have a significant impact on the Consolidated Financial Statements.
Loans and receivables
Financing liabilities and associated hedging instruments
(1,660)
(1,897)
(1,927)
Fair value hedge (ineffective portion)
Lease assets and obligations
(422)
Assets and liabilities held for trading
(349)
IMPACT ON THE COST OF NET DEBT
F-78
B) Impact of the hedging strategies
Fair value hedge instruments
The impact on the statement of income of the bond hedging instruments which is recorded in the item “Financial interest on debt” in the Consolidated Statement of Income is detailed as follows:
Revaluation impact at market value of bonds
(4,004)
1,332
Swap hedging of bonds
4,016
(1,338)
INEFFECTIVE PORTION OF THE FAIR VALUE HEDGE
The ineffective portion is not representative of the Group’s performance considering the Group’s objective to hold swaps to maturity. The current portion of the swaps valuation is not subject to active management.
Net investment hedge
The variations of the period are detailed in the table below:
Variations
December 31
(717)
(788)
(724)
As of December 31, 2020, 2019 and 2018 the Group had no open forward contracts under these hedging instruments.
The impact on the statement of income and other comprehensive income of the hedging instruments qualified as cash flow hedges is detailed as follows:
Profit (Loss) recorded in other comprehensive income of the period
(585)
Recycled amount from other comprehensive income to the income statement of the period
As of December 31, 2020, 2019 and 2018, the ineffective portion of these financial instruments is nil.
Hedging instruments and hedged items by strategy
Fair Value Hedge
The following charts regarding Fair Value Hedge, disclose by nature of hedging instruments (Interest Rate Swaps and Cross Currency Swaps):
The hedged items that have ceased to be adjusted for hedging gains and losses.
For the year ended December 31 2020
Cumulative FVH
Nominal
adjustments included
amount of
Carrying amount of
in the carrying amount
Line items in the
Hedging
hedging
hedged items
of the hedged items
Hedged items
Assets
Liabilities
financial position
Interest Rate
Financial debt /
Bonds
Swaps
8,063
(8,586)
(1,136)
Financial assets
Cross Currency
(211)
(11,109)
End of hedging (before 2018)
F-79
For the year ended December 31 2019
Interest RateSwaps
8,012
(75)
(7,450)
(795)
Financial debt / Financial assets
Cross Currency Swaps
14,357
124
(14,357)
1,290
Cash Flow Hedge
The following charts regarding Cash Flow Hedge disclose the nominal amounts and carrying amounts by nature of hedging instruments (Interest Rate Swaps and Cross Currency Swaps).
According to IFRS 9, there is no accounting entry related to Cash Flow Hedge on hedged items.
Nature of
Line item in the
12,781
(1,441)
17,511
1,856
$M
12,782
12,604
F-80
C) Maturity of derivative instruments
The maturity of the notional amounts of derivative instruments, excluding the commodity contracts, is detailed in the following table:
Notional
Notional value schedule
Fair
value
and after
Fair value hedge
Swaps hedging bonds (assets)
1,250
12,642
Swaps hedging bonds (liabilities)
1,445
3,737
Total swaps hedging bonds
(86)
2,695
1,223
16,379
4,350
3,858
2,087
1,630
4,454
16,259
(1,473)
14,033
30,292
1,000
3,659
4,459
21,174
Forward exchange contracts related to operating activites (assets)
394
Forward exchange contracts related to operating activites (liabilities)
Total forward exchange contracts related to operating activities
Held for trading
Other interest rate swaps (assets)
22,011
3,214
Other interest rate swaps (liabilities)
(51)
7,693
3,695
Total other interest rate swaps
29,704
6,909
764
2,004
1,937
Currency swaps and forward exchange contracts (assets)
3,323
344
Currency swaps and forward exchange contracts (liabilities)
2,580
Total currency swaps and forward exchange contracts
5,903
398
Notional amounts set the levels of commitment and are indicative nor of a contingent gain or loss neither of a related debt.
469
3,346
(736)
8,127
(267)
19,023
4,298
2,337
5,835
4,062
21,324
(915)
25,386
20,727
Total forward exchange contracts related to operating activites
23,522
2,225
16,007
3,475
39,529
5,700
1,463
1,820
6,446
4,455
10,901
562
F-81
1,345
3,712
1,874
(1,281)
16,225
(163)
3,219
(1,046)
19,937
1,945
4,309
6,479
10,043
11,265
(221)
21,308
17,001
2,515
20,816
2,686
37,817
5,201
2,186
1,954
10,500
9,107
19,607
D) Fair value hierarchy
Fair values are estimated for the majority of the Group’s financial instruments, with the exception of publicly traded equity securities and marketable securities for which the market price is used.
Estimations of fair value, which are based on principles such as discounting future cash flows to present value, must be weighted by the fact that the value of a financial instrument at a given time may be influenced by the market environment (liquidity especially), and also the fact that subsequent changes in interest rates and exchange rates are not taken into account.
As a consequence, the use of different estimates, methodologies and assumptions could have a material effect on the estimated fair value amounts.
The methods used are as follows:
- Financial debts, swaps
The market value of swaps and of bonds that are hedged by those swaps has been determined on an individual basis by discounting future cash flows with the market curves existing at year-end.
- Other financial instruments
The fair value of the interest rate swaps and of FRA’s (Forward Rate Agreements) are calculated by discounting future cash flows on the basis of market curves existing at year-end after adjustment for interest accrued but unpaid. Forward exchange contracts and currency swaps are valued on the basis of a comparison of the negotiated forward rates with the rates in effect on the financial markets at year-end for similar maturities.
Exchange options are valued based on models commonly used by the market.
The fair value hierarchy for financial instruments, excluding commodity contracts, is as follows:
Quoted prices in
active markets
Prices based
Prices based on
for identical
on observable
non observable
data
(level 1)
(level 2)
(level 3)
1,137
Cash flow hedge instruments
Equity instruments
F-82
(1,523)
(1,283)
(1,209)
(1,586)
15.3 Financial risks management
Financial markets related risks
As part of its financing and cash management activities, the Group uses derivative instruments to manage its exposure to changes in interest rates and foreign exchange rates. These instruments are mainly interest rate and currency swaps. The Group may also occasionally use futures contracts and options. These operations and their accounting treatment are detailed in Notes 14, 15.1 and 15.2 to the Consolidated Financial Statements.
Risks relative to cash management operations and to interest rate and foreign exchange financial instruments are managed according to rules set by the Group’s senior management, which provide for regular pooling of available cash balances, open positions and management of the financial instruments by the Treasury Department. Excess cash of the Group is deposited mainly in government institutions, deposit banks, or major companies through deposits, reverse repurchase agreements and purchase of commercial paper. Liquidity positions and the management of financial instruments are centralized by the Treasury Department, where they are managed by a team specialized in foreign exchange and interest rate market transactions.
The Cash Monitoring-Management Unit within the Treasury Department monitors limits and positions per bank on a daily basis and results of the Front Office. This unit also prepares marked-to-market valuations of used financial instruments and, when necessary, performs sensitivity analysis.
Counterparty risk
The Group has established standards for market transactions under which any banking counterparty must be approved in advance, based on an assessment of the counterparty’s financial solidity (multi-criteria analysis including notably a review of its Credit Default Swap (CDS) level, credit ratings from Standard & Poor’s and Moody’s, which must be of high standing, and general financial situation).
An overall credit limit is set for each authorised financial counterparty and is allocated amongst the affiliates and the Group’s central treasury entities, according to the Group’s financial needs.
To reduce the market valuation risk on its commitments, in particular relating to derivative instruments, the Treasury Department has entered into margin call agreements with its counterparties, in compliance with applicable regulations. Moreover, since December 21, 2018 and pursuant to Regulation (EU) No. 648/2012 on OTC derivatives, central counterparties and trade repositories (EMIR), any new interest rate hedging swap (excluding cross currency swaps) entered into by a Group’s entity is now subject to central clearing.
Short-term interest rate exposure and cash
Cash balances, which are primarily composed of euros and dollars, are managed according to the guidelines established by the Group’s senior management (to maintain an adequate level of liquidity, optimize revenue from investments considering existing interest rate yield curves, and minimize the cost of borrowing) over a less than twelve-month horizon and on the basis of a daily interest rate benchmark, primarily through short-term interest rate swaps and short-term currency swaps, without modifying currency exposure.
Interest rate risk on non-current debt
The Group’s policy consists in incurring long-term debt at a floating or fixed rate, depending on the Group’s general corporate needs and the interest rate environment at the time of issue, mainly in dollars or euros. Long-term interest rate and currency swaps may be entered into for the purpose of hedging bonds at the time of issuance, synthetically resulting in the incurrence of variable or fixed rate debt. In order to partially alter the interest rate exposure of its long-term indebtedness, TOTAL may also enter into long-term interest rate swaps on an ad-hoc basis.
F-83
Currency exposure
The Group generally seeks to minimize the currency exposure of each entity to its functional currency (primarily the dollar, the euro, the pound sterling and the Norwegian krone).
For currency exposure generated by commercial activity, the hedging of revenues and costs in foreign currencies is typically performed using currency operations on the spot market and, in some cases, on the forward market. The Group rarely hedges future cash flows, although it may use options to do so.
With respect to currency exposure linked to non-current assets, the Group has a hedging policy of financing these assets in their functional currency.
Net short-term currency exposure is periodically monitored against limits set by the Group’s senior management.
The non-current debt described in Note 15.1 to the Consolidated Financial Statements is generally raised by the corporate treasury entities either directly in dollars or in euros, or in other currencies which are then exchanged for dollars or euros through swap issues to appropriately match general corporate needs. The proceeds from these debt issuances are loaned to affiliates whose accounts are kept in dollars or in euros. Thus, the net sensitivity of these positions to currency exposure is not significant.
The Group’s short-term currency swaps, the notional value of which appears in Note 15.2 to the Consolidated Financial Statements, are used to attempt to optimize the centralized cash management of the Group. Thus, the sensitivity to currency fluctuations which may be induced is likewise considered negligible.
Sensitivity analysis on interest rate and foreign exchange risk
The tables below present the potential impact of an increase or decrease of 10 basis points on the interest rate yield curves for each of the currencies on the fair value of the current financial instruments as of December 31, 2020, 2019 and 2018.
Change in fair value due to a change in
interest rate by
Carrying
Estimated
+10 basis
‑10 basis
points
Bonds (non-current portion, before swaps)
(46,239)
(52,246)
440
(440)
Total swaps hedging bonds (assets and liabilities)
1,606
Current portion of non-current debt after swaps (excluding lease obligations)
(4,674)
(4,696)
Other interest rates swaps
Currency swaps and forward exchange contracts
(38,657)
(41,805)
(1,182)
(5,331)
(5,332)
(34,975)
(36,127)
185
(1,267)
Current portion of non-current debt after swaps (excluding capital lease obligations)
(5,027)
The impact of changes in interest rates on the cost of debt before tax is as follows:
Interest rate translation of :
+ 10 basis points
‑10 basis points
F-84
As a result of the policy for the management of currency exposure previously described, the Group’s sensitivity to currency exposure is primarily influenced by the net equity of the subsidiaries whose functional currency is the euro and the ruble, and to a lesser extent, the pound sterling and the Norwegian krone.
This sensitivity is reflected in the historical evolution of the currency translation adjustment recorded in the statement of changes in consolidated shareholders’ equity which, over the course of the last three years, is essentially related to the fluctuation of the euro, the ruble and the pound sterling and is set forth in the table below:
Dollar / Euro exchange
Dollar / Pound sterling
Dollar / Ruble exchange
rates
exchange rates
0.81
0.73
74.54
December 31, 2019
0.89
0.76
62.27
December 31, 2018
0.87
0.78
69.62
Dollar
Shareholders’ equity at historical exchange rate
113,958
28,893
60,613
4,494
9,913
10,045
Currency translation adjustment before net investment hedge
(10,279)
(2,448)
(1,726)
(4,253)
(1,852)
Net investment hedge – open instruments
Shareholders’ equity at exchange rate as of December 31, 2020
26,468
5,660
8,193
128,281
37,687
66,005
5,635
9,900
9,054
(11,501)
(4,443)
(1,830)
(3,355)
(1,873)
Shareholders’ equity at exchange rate as of December 31, 2019
33,241
3,805
6,545
7,182
126,953
41,518
59,125
9,077
8,248
8,985
(11,321)
(3,706)
(1,960)
(3,892)
(1,763)
Shareholders’ equity at exchange rate as of December 31, 2018
37,820
7,117
4,356
7,222
Based on the 2020 financial statements, a conversion using rates different from + or - 10% for each of the currencies below would have the following impact on shareholders equity and net income (Group share):
Impact of an increase of 10% of exchange rates on :
– shareholders equity
2,647
277
566
– net income (Group share)
(189)
Impact of a decrease of (10)% of exchange rates on :
(2,647)
Stock market risk
The Group holds interests in a number of publicly-traded companies (see Note 8 to the Consolidated Financial Statements). The market value of these holdings fluctuates due to various factors, including stock market trends, valuations of the sectors in which the companies operate, and the economic and financial condition of each individual company.
Liquidity risk
TOTAL SE has committed credit facilities granted by international banks allowing it to benefit from significant liquidity reserves.
As of December 31, 2020, these credit facilities amounted to $14,902 million, of which $11,256 million were unutilized. The agreements underpinning credit facilities granted to TOTAL SE do not contain conditions related to the Company’s financial ratios, to its credit ratings from specialized agencies, or to the occurrence of events that could have a material adverse effect on its financial position.
As of December 31, 2020, the aggregated amount of the main committed credit facilities granted by international banks to the Group’s companies, including TOTAL SE, was $16,282 million, of which $11,808 million were unutilized. Credit facilities granted to the Group’s companies other than TOTAL SE are not intended to fund the Group’s general corporate purposes; they are intended to fund either general corporate purposes of the borrowing affiliate, or a specific project.
F-85
The following tables show the maturity of the financial assets and liabilities of the Group as of December 31, 2020, 2019 and 2018 (see Note 15.1 to the Consolidated Financial Statements).
Assets/(Liabilities)
one year
1-2 years
2-3 years
3-4 years
4-5 years
Non-current financial debt (notional value excluding interests)
(9,849)
(5,762)
(5,990)
(4,321)
(30,951)
(56,873)
1,259
1,451
Assets and liabilities available for sale or exchange
Net amount before financial expense
18,283
(9,790)
(5,720)
(5,945)
(4,275)
(29,692)
(37,139)
Financial expense on non-current financial debt
(888)
(603)
(5,833)
(9,775)
Interest differential on swaps
(158)
(173)
(1,769)
17,190
(10,827)
(6,703)
(6,814)
(5,074)
(36,455)
(48,683)
(5,683)
(6,102)
(5,172)
(5,802)
(24,435)
(47,194)
15,737
(5,615)
(6,078)
(5,163)
(5,798)
(24,207)
(31,124)
(807)
(594)
(482)
(2,215)
(5,472)
(350)
(297)
(2,497)
14,580
(6,664)
(7,025)
(6,012)
(6,504)
(27,468)
(39,093)
(5,432)
(3,966)
(5,158)
(4,983)
(19,910)
(39,449)
17,792
(21,657)
(718)
(506)
(427)
(1,037)
(3,968)
(484)
(412)
(309)
(869)
(2,677)
16,590
(6,526)
(4,933)
(5,973)
(5,644)
(21,816)
(28,302)
The following table sets forth financial assets and liabilities related to operating activities as of December 31, 2020, 2019 and 2018 (see Note 14 of the Notes to the Consolidated Financial Statements).
including derivative financial instruments related to commodity contracts (liabilities)
including derivative financial instruments related to commodity contracts (assets)
(15,765)
(14,662)
(12,417)
These financial assets and liabilities mainly have a maturity date below one year.
Credit risk
Credit risk is defined as the risk of the counterparty to a contract failing to perform or pay the amounts due.
The Group is exposed to credit risks in its operating and financing activities. The Group’s maximum exposure to credit risk is partially related to financial assets recorded on its balance sheet, including energy derivative instruments that have a positive market value.
F-86
The following table presents the Group’s maximum credit risk exposure:
Loans to equity affiliates (note 8)
Loans and advances (note 6)
Other non-current financial assets related to operational activities (note 6)
Non-current financial assets (note 15.1)
Accounts receivable (note 5)
Other operating receivables (note 5)
Current financial assets (note 15.1)
Cash and cash equivalents (note 15.1)
70,664
68,563
66,347
The valuation allowance on accounts receivable, other operating receivables and on loans and advances is detailed in Notes 5 and 6 to the Consolidated Financial Statements.
As part of its credit risk management related to operating and financing activities, the Group has developed margining agreements with certain counterparties. As of December 31, 2020, the net margin call paid amounted to $(1,556) million (against $2,486 million paid as of December 31, 2019 and $2,581 million paid as of December 31, 2018).
The Group has established a number of programs for the sale of receivables, without recourse, with various banks, primarily to reduce its exposure to such receivables. As a result of these programs the Group retains no risk of payment default after the sale, but may continue to service the customer accounts as part of a service arrangement on behalf of the buyer and is required to pay to the buyer payments it receives from the customers relating to the receivables sold. As of December 31, 2020, the net value of receivables sold amounted to $6,446 million. The Group has substantially transferred all the risks and rewards related to receivables. No financial asset or liability remains recognized in the consolidated balance sheet after the date of sale.
Furthermore, in 2020 the Group conducted several operations of reverse factoring for a value of $23 million.
Credit risk is managed by the Group’s business segments as follows:
- Exploration & Production segment
Risks arising under contracts with government authorities or other oil companies or under long-term supply contracts necessary for the development of projects are evaluated during the project approval process. The long-term aspect of these contracts and the high-quality of the other parties lead to a low level of credit risk.
Risks related to commercial operations, other than those described above (which are, in practice, directly monitored by subsidiaries), are subject to procedures for establishing credit limits and reviewing outstanding balances.
- Integrated Gas, Renewables & Power segment
Trading Gas & Power activities deal with counterparties in the energy, industrial and financial sectors throughout the world. Financial institutions providing credit risk coverage are highly rated international banks and insurance groups.
Potential counterparties are subject to credit assessment and approval before concluding transactions and are thereafter subject to regular review, including re-appraisal and approval of the limits previously granted.
The creditworthiness of counterparties is assessed based on an analysis of quantitative and qualitative data regarding financial standing and business risks, together with the review of any relevant third party and market information, such as data published by rating agencies. On this basis, credit limits are defined for each potential counterparty and, where appropriate, transactions are subject to specific authorizations.
Credit exposure, which is essentially an economic exposure or an expected future physical exposure, is permanently monitored and subject to sensitivity measures.
Credit risk is mitigated by the systematic use of industry standard contractual frameworks that permit netting, enable requiring added security in case of adverse change in the counterparty risk, and allow for termination of the contract upon occurrence of certain events of default.
About the Professionals and Retail Gas and Power Sales activities, credit risk management policy is adapted to the type of customer either through the use of procedures of prepayments and appropriate collection, especially for mass customers or through credit insurances and sureties/guarantees obtaining. For the Professionals segment, the segregation of duties between the commercial and financial teams allows an “a priori” control of risks.
Internal procedures for the Renewables division and the Carbon Neutrality Business division include rules on credit risk management. Procedures to monitor customer risk are defined at the local level, especially for SunPower, Saft and Greenflex (rules for the approval of credit limits, use of guarantees, monitoring and assessment of the receivables portfolio,...).
F-87
Notes 15 and 16
- Refining & Chemicals segment
Credit risk is primarily related to commercial receivables. Internal procedures of Refining & Chemicals include rules for the management of credit describing the fundamentals of internal control in this domain. Each Business Unit implements the procedures of the activity for managing and provisioning credit risk according to the size of the subsidiary and the market in which it operates. The principal elements of these procedures are:
Counterparties are subject to credit assessment and approval prior to any transaction being concluded. Regular reviews are made for all active counterparties including a re-appraisal and renewing of the granted credit limits. The limits of the counterparties are assessed based on quantitative and qualitative data regarding financial standing, together with the review of any relevant third party and market information, such as that provided by rating agencies and insurance companies.
Trading & Shipping deals with commercial counterparties and financial institutions located throughout the world. Counterparties to physical and derivative transactions are primarily entities involved in the oil and gas industry or in the trading of energy commodities, or financial institutions. Credit risk coverage is arranged with financial institutions, international banks and insurance groups selected in accordance with strict criteria.
The Trading & Shipping division applies a strict policy of internal delegation of authority in order to set up credit limits by country and counterparty and approval processes for specific transactions. Credit exposures contracted under these limits and approvals are monitored on a daily basis.
Potential counterparties are subject to credit assessment and approval prior to any transaction being concluded and all active counterparties are subject to regular reviews, including re-appraisal and approval of granted limits. The creditworthiness of counterparties is assessed based on an analysis of quantitative and qualitative data regarding financial standing and business risks, together with the review of any relevant third party and market information, such as ratings published by Standard & Poor’s, Moody’s Investors Service and other agencies.
Contractual arrangements are structured so as to maximize the risk mitigation benefits of netting between transactions wherever possible and additional protective terms providing for the provision of security in the event of financial deterioration and the termination of transactions on the occurrence of defined default events are used to the greatest permitted extent.
Credit risks in excess of approved levels are secured by means of letters of credit and other guarantees, cash deposits and insurance arrangements. In respect of derivative transactions, risks are secured by margin call contracts wherever possible.
- Marketing & Services segment
Internal procedures for the Marketing & Services division include rules on credit risk that describe the basis of internal control in this domain, including the separation of authority between commercial and financial operations.
Credit policies are defined at the local level and procedures to monitor customer risk are implemented (credit committees at the subsidiary level, the creation of credit limits for corporate customers, etc.). Each entity also implements monitoring of its outstanding receivables. Risks related to credit may be mitigated or limited by subscription of credit insurance and/or requiring security or guarantees.
16.1 Financial instruments related to commodity contracts
Financial instruments related to commodity contracts, including crude oil, petroleum products, gas, and power purchase/sales contracts within the trading activities, together with the commodity contract derivative instruments such as energy contracts and forward freight agreements, are used to adjust the Group’s exposure to price fluctuations within global trading limits. According to the industry practice, these instruments are considered as held for trading. Changes in fair value are recorded in the statement of income. The fair value of these instruments is recorded in “Other current assets” or “Other creditors and accrued liabilities” depending on whether they are assets or liabilities.
The valuation methodology is to mark-to-market all open positions for both physical and paper transactions. The valuations are determined on a daily basis using observable market data based on organized and over the counter (OTC) markets. In particular cases when market data is not directly available, the valuations are derived from observable data such as arbitrages, freight or spreads and market corroboration. For valuation of risks which are the result of a calculation, such as options for example, commonly known models are used to compute the fair value.
F-88
Note 16
Net balance
Amounts
sheet value
before offsetting
offset -
presented
amounts not
Net carrying
- assets
- liabilities
assets(c)
liabilities(c)
offset
value(b)
Crude oil, petroleum products and freight rates activities
Petroleum products, crude oil and freight rate swaps
(443)
(207)
95
Forwards(a)
(139)
Options
Futures
Options on futures
117
Other / Collateral
Total crude oil, petroleum products and freight rates
285
Integrated Gas, Renewables & Power activities
1,372
(3,113)
1,186
(2,927)
(1,741)
(74)
(136)
Total Integrated Gas, Renewables & Power
1,363
(3,291)
(220)
220
1,143
(3,071)
(1,906)
2,053
(4,291)
625
(2,173)
Total of fair value non recognized in the balance sheet
(244)
(294)
(160)
525
449
508
4,080
(4,831)
(296)
3,784
(4,535)
(772)
4,642
(4,902)
(300)
4,342
(4,602)
(1,032)
5,167
(5,709)
(376)
376
(1,167)
389
(272)
(373)
(314)
(363)
156
1,414
(1,697)
(884)
884
(401)
(606)
2,492
(2,285)
(316)
316
2,176
(1,969)
445
(3,054)
(438)
2,201
(2,616)
4,053
(4,751)
(1,322)
1,322
327
F-89
Commitments on crude oil and refined products have, for the most part, a short-term maturity (less than one year).
The changes in fair value of financial instruments related to commodity contracts are detailed as follows:
Impact on
Settled
Fair value as of
as of January 1,
contracts
(282)
3,813
(3,841)
(283)
4,189
(4,188)
(223)
2,689
(2,749)
676
(2,348)
(1,928)
(415)
1,588
(747)
1,220
(2,057)
In 2019, the Other column mainly included the acquisition of Toshiba's LNG portfolio, for which financial instruments related to commodity contracts had been recognized for the amount of treasury received.
The fair value hierarchy for financial instruments related to commodity contracts is as follows:
Quoted prices
in active markets for
identical
observable data
assets (level 1)
data (level 3)
(159)
(361)
(1,408)
(681)
(2,238)
2,054
(2,706)
1,882
(2,634)
(542)
(638)
(698)
Financial instruments classified as level 3 are mainly composed of long-term liquefied natural gas purchase and sale contracts which relate to the trading activity.
For the purpose of valuation and accounting of LNG contracts, the Group refers to the active management horizon for trading positions which corresponds to 12 months in 2019 and in 2020. The management of positions being carried out on a net value of LNG purchase and sale commitments, the applied valuation method is the contract’s portfolio method based mostly on observable market data such as the prices of energy raw materials forward contracts.
Concerning the period beyond the management horizon, a sensitivity analysis is carried out to verify that no liability should be recognized. The assumptions used are based on internal assumptions such as the oil and gas price trajectories adopted by the Group, prices renegotiation clauses included in long-term contracts, uncertainties related to contracts execution and flexibilities included in LNG contracts.
This sensitivity analysis highlights that the valuation method of the LNG contracts is sensitive to market risks, and more specifically to price risk resulting from the volatility of oil and natural gas prices on the North American, Asian, and European markets, and to the valuation of flexibilities, and beyond the active management horizon of 12 months, a 10% change of the spread between gas prices in US and Asia would have an estimated annual impact of +/- 0.1 B$ on the contract's portfolio margin for the following year.
The description of each fair value level is presented in Note 15 to the Consolidated Financial Statements.
F-90
Notes 16 and 17
Cash Flow hedge
The impact on the statement of income and other comprehensive income of the hedging instruments related to commodity contracts and qualified as cash flow hedges is detailed as follows:
As of December 31
These financial instruments are mainly one year term Henry Hub derivatives and European gas, power and CO2 emission rights derivatives.
As of December 31, 2020, the ineffective portion of these financial instruments is nil (in 2019 and in 2018 the ineffective portion of these financial instruments was nil).
16.2 Oil, Gas and Power markets related risks management
Due to the nature of its business, the Group has significant oil and gas trading activities as part of its day-to-day operations in order to optimize revenues from its oil and gas production and to obtain favorable pricing to supply its refineries.
In its international oil trading business, the Group follows a policy of not selling its future production. However, in connection with this trading business, the Group, like most other oil companies, uses energy derivative instruments to adjust its exposure to price fluctuations of crude oil, refined products, natural gas, and power. The Group also uses freight rate derivative contracts in its shipping business to adjust its exposure to freight-rate fluctuations. To hedge against this risk, the Group uses various instruments such as futures, forwards, swaps and options on organized markets or over-the-counter markets. The list of the different derivatives held by the Group in these markets is detailed in Note 16.1 to the Consolidated Financial Statements.
The Trading & Shipping division measures its market risk exposure, i.e. potential loss in fair values, on its crude oil, refined products and freight rates trading activities using a “value-at-risk” technique. This technique is based on an historical model and makes an assessment of the market risk arising from possible future changes in market values over a 24-hour period. The calculation of the range of potential changes in fair values is based on the end-of-day exposures and historical price movements of the last 400 business days for all traded instruments and maturities. Options are systematically re-evaluated using appropriate models.
The “value-at-risk” represents the most unfavorable movement in fair value obtained with a 97.5%confidence level. This means that the Group’s portfolio result is likely to exceed the value-at-risk loss measure once over 40 business days if the portfolio exposures were left unchanged.
Trading & Shipping: "value-at-risk with" a 97.5% probability
High
Low
Average
Year end
As part of its gas and power trading activity, the Group also uses derivative instruments such as futures, forwards, swaps and options in both organized and over-the-counter markets. In general, the transactions are settled at maturity date through physical delivery. The Gas division measures its market risk exposure, i.e. potential loss in fair values, on its trading business using a "value-at-risk" technique. This technique is based on an historical model and makes an assessment of the market risk arising from possible future changes in market values over a one-day period. The calculation of the range of potential changes in fair values takes into account a snapshot of the end-of-day exposures and the set of historical price movements for the past two years for all instruments and maturities in the global trading business.
Integrated Gas, Renewables & Power division trading: "value-at-risk" with a 97.5% probability
51
The Group has implemented strict policies and procedures to manage and monitor these market risks. These are based on the separation of control and front-office functions and on an integrated information system that enables real-time monitoring of trading activities.
Limits on trading positions are approved by the Group’s Executive Committee and are monitored daily. To increase flexibility and encourage liquidity, hedging operations are performed with numerous independent operators, including other oil companies, major energy producers or consumers and financial institutions. The Group has established counterparty limits and monitors outstanding amounts with each counterparty on an ongoing basis.
There was no post closing event.
F-91
Note 18
As of December 31, 2020, 1,118 entities are consolidated of which 146 are accounted for under the equity method (E).
The table below presents the comprehensive list of the Group consolidated entities
Business
% Group
Country of
segment
Statutory corporate name
interest
Method
incorporation
Country of operations
Abu Dhabi Gas Industries Limited
15.00
E
United Arab Emirates
Abu Dhabi Marine Areas Limited
33.33
United Kingdom
Angola Block 14 B.V.
50.01
Netherlands
Angola
Angola LNG Supply Services, LLC
13.60
United States
Bonny Gas Transport Limited
Bermuda
Nigeria
Brass Holdings B.V.
100.00
Brass LNG Limited
20.48
Deer Creek Pipelines Limited
75.00
Dolphin Energy Limited
24.50
E.F. Oil And Gas Limited
Elf E&P
Elf Exploration UK Limited
Elf Petroleum Iran
Iran
Elf Petroleum UK Limited
Gas Investment and Services Company Limited
10.00
Oman
Mabruk Oil Operations
49.02
Libya
Moattama Gas Transportation Company Limited
31.24
Myanmar
Norpipe Oil A/S
34.93
Norway
Norpipe Petroleum UK Limited
45.22
Norpipe Terminal Holdco Limited
Norsea Pipeline Limited
North Oil Company
30.00
Novatek
Russia
Pars LNG Limited
40.00
Petrocedeno
Venezuela
Private Oil Holdings Oman Limited
Stogg Eagle Funding B.V.
Tepkri Sarsang A/S
Denmark
Iraq
Termokarstovoye S.A.S.
Terneftegaz JSC (a)
58.89
Total (BTC) B.V.
Azerbaijan
Total Abu Al Bu Khoosh
Total Austral
Argentina
Total Brazil Services B.V.
Total Danmark Pipelines A/S
Total Denmark ASW Pipeline ApS
Total Denmark ASW, Inc.
Total Dolphin Midstream
Total E&P Chissonga
Total E&P Absheron B.V.
Total E&P Al Shaheen A/S
Total E&P Algerie
Algeria
Total E&P Algerie Berkine A/S
Total E&P Americas, LLC
Total E&P Anchor, LLC
Total E&P Angola
Total E&P Angola Block 15/06
Total E&P Angola Block 16
Total E&P Angola Block 16 Holdings
Total E&P Angola Block 17.06
Total E&P Angola Block 25
Total E&P Angola Block 32
Total E&P Angola Block 33
Total E&P Angola Block 39
Total E&P Angola Block 40
Total E&P Angola Block 48 B.V.
F-92
Total E&P Angola Blocks 20-21
Total E&P Aruba B.V.
Aruba
Total E&P Asia Pacific Pte. Limited
Singapore
Total E&P Azerbaijan B.V.
Total E&P Bolivie
Bolivia
Total E&P Borneo B.V.
Brunei
Total E&P Bulgaria B.V.
Bulgaria
Total E&P Cambodge
Cambodia
Total E&P Canada Limited
Total E&P Chine
China
Total E&P Colombie
Colombia
Total E&P Congo
85.00
Congo
Total E&P Cote d'Ivoire
Côte d'Ivoire
Total E&P Cote d'Ivoire CI - 514
Total E&P Cote d'Ivoire CI - 515
Total E&P Cote d'Ivoire B.V.
Total E&P Cyprus B.V.
Cyprus
Total E&P Danmark A/S - CPH
Total E&P Danmark A/S -EBJ
Total E&P Do Brasil Ltda
Brazil
Total E&P Dolphin Upstream
Total E&P Dunga GmbH
Germany
Kazakhstan
Total E&P East El Burullus Offshore B.V.
Egypt
Total E&P Egypt Block 2 B.V.
Total E&P Egypte
Total E&P Europe and Central Asia Limited
Total E&P France
Total E&P Golfe Limited
Total E&P Greece B.V.
Greece
Total E&P Guyana B.V.
Guyana
Total E&P Guyane Francaise
Total E&P Holdings Russia
Total E&P Holdings UAE B.V.
Total E&P International K1 Limited
Kenya
Total E&P International K2 Limited
Total E&P International K3 Limited
Total E&P International Limited
Total E&P Iraq
Total E&P Ireland B.V.
Ireland
Total E&P Italia
Italy
Total E&P Jack LLC
Total E&P Jutland Denmark B.V.
Total E&P Kazakhstan
Total E&P Kenya B.V.
Total E&P Kurdistan Region of Iraq (Harir) B.V.
Total E&P Kurdistan Region of Iraq (Safen) B.V.
Total E&P Kurdistan Region of Iraq (Taza) B.V.
Total E&P Kurdistan Region of Iraq B.V.
Total E&P Liban S.A.L.
Lebanon
Total E&P Libye
Total E&P Lower Zakum B.V.
Total E&P M2 Holdings Limited
South Africa
Total E&P Malaysia
Malaysia
Total E&P Mauritania Block C18 B.V.
Mauritania
Total E&P Mauritania Block C9 B.V.
Total E&P Mauritania Blocks DW B.V.
Total E&P Mauritanie
Total E&P Mexico S.A. de C.V.
Mexico
Total E&P Mozambique B.V.
Mozambique
Total E&P Myanmar
Total E&P Namibia B.V.
Namibia
Total E&P Nederland B.V.
Total E&P New Ventures Inc.
Total E&P Nigeria Deepwater A Limited
Total E&P Nigeria Deepwater B Limited
Total E&P Nigeria Deepwater C Limited
F-93
Total E&P Nigeria Deepwater D Limited
Total E&P Nigeria Deepwater E Limited
Total E&P Nigeria Deepwater F Limited
Total E&P Nigeria Deepwater G Limited
Total E&P Nigeria Deepwater H Limited
Total E&P Nigeria Limited
Total E&P Nigeria S.A.S.
Total E&P Norge AS
Total E&P North Sea UK Limited
Total E&P Oman
Total E&P Participations Petrolieres Congo
Total E&P Philippines B.V.
Philippines
Total E&P Qatar
Total E&P RDC
Democratic Republic of Congo
Total E&P Research & Technology USA LLC
Total E&P Russie
Total E&P Sao Tome and Principe B.V.
Total E&P Senegal
Senegal
Total E&P Services China Company Limited
Total E&P South Africa B.V.
Total E&P South Africa Block 567 (Pty) Ltd
Total E&P South Pars
Total E&P South Sudan
Republic of South Sudan
Total E&P Suriname B.V.
Suriname
Total E&P Syrie
Syrian Arab Republic
Total E&P Tajikistan B.V.
Tajikistan
Total E&P Thailand
Thailand
Total E&P Three Pl B.V.
Total E&P Timan-Pechora LLC
Total E&P UAE Unconventional Gas B.V.
Total E&P Uganda B.V.
Uganda
Total E&P UK Limited
Total E&P Umm Shaif Nasr B.V.
Total E&P Uruguay B.V.
Uruguay
Total E&P Uruguay Onshore B.V.
Total E&P US Well Containment, LLC
Total E&P USA Inc.
Total E&P USA Oil Shale, LLC
Total E&P Waha Limited
Cayman Islands
Total E&P Well Response
Total E&P Yemen
Yemen
Total E&P Yemen Block 3 B.V.
Total East Africa Midstream B.V.
Total Energy (Meuk) Limited
Total Exploration M'Bridge
Total Facilities Management B.V.
Total Gabon
58.28
Gabon
Total Gass Handel Norge AS
Total Gastransport Nederland B.V.
Total Holding Dolphin Amont
Total Holdings Nederland B.V.
Total Holdings Nederland International B.V.
Total Iran B.V.
Total LNG Supply Services USA Inc.
Total Oil and Gas South America
Total Oil and Gas Venezuela B.V.
Total Oil Gb Limited
Total Oil UK Limited
Total P&G do Brasil Ltda
Total Pars LNG
Total Petroleum Angola
Total Profils Petroliers
Total Qatar
Total South Pars
Total Upstream Danmark A/S
Total Upstream Nigeria Limited
F-94
Total Upstream UK Limited
Total Venezuela
Uintah Colorado Resources, LLC
66.67
Unitah Colorado Resources II, LLC
Ypergas S.A.
37.33
Abu Dhabi Gas Liquefaction Company Limited
5.00
Adani Gas Limited AGL
37.40
India
Adani Green Energy Twenty Three Limited
Adani Total Private Limited (e)
Advanced Thermal Batteries Inc.
49.99
Aerospatiale Batteries (ASB)
Aerowatt Energies
65.00
Aerowatt Energies 2
51.00
Abarloar Solar, S.L.U.
Spain
Alcad AB
99.99
Sweden
Alicante
Alicante 2
Al Kharsaa Solar Holdings B.V.
49.00
Amber Solar Power Cinco, S.L.
Amber Solar Power Cuatro, S.L.
Amber Solar Power Dieciseis, S.L.
Amber Solar Power Diez, S.L.
Amber Solar Power Nueve, S.L.
Amber Solar Power Quince, S.L.
Amber Solar Power Tres, S.L.
Amber Solar Power Uno, S.L.
Anayet Solar, S.L.U.
Armada Solar, S.L.U.
Amura Solar, S.L.U.
Angola LNG Limited
Arbotante Solar, S.L.U.
Arctic LNG 2 LLC (b)
21.64
ATJV Offshore
Automotive Cells Company, S.E.
Baser Comercializadora de Referencia
Bassin Du Capiscol
Beauce Oratorienne
Biogaz Breuil
Biogaz Chatillon
Biogaz Corcelles
Biogaz Epinay
Biogaz Libron
Biogaz Milhac
Biogaz Soignolles
Biogaz Torcy
Biogaz Vert Le Grand
Biogaz Viriat
Borrowed Sunshine II Parent, LLC
51.61
Borrowed Sunshine II, LLC
BSP Class B Member HoldCo, LLC
BSP Class B Member, LLC
BSP Holding Company, LLC
BSP II Parent, LLC
Cameron LNG Holdings LLC
16.60
Centrale Eolienne Ploumoguer
Centrale Eolienne De Goulien
Centrale Eolienne De La Vallee Gentillesse
74.80
Centrale Hydrolique Alas
Centrale Hydrolique Ardon
90.00
Centrale Hydrolique Arvan
Centrale Hydrolique Barbaira
Centrale Hydrolique Bonnant
F-95
Centrale Hydrolique Gavet
Centrale Hydrolique La Buissiere
Centrale Hydrolique Miage
Centrale Hydrolique Previnquieres
Centrale Photovoltaique De Merle Sud
40.58
Centrale Photovoltaique Du Seneguier
Centrale Photovoltaique Le Barou
Centrale Solaire 2
Centrale Solaire Autoprod
Centrale Solaire Base 112
Centrale Solaire Beauce Val de Loire
Centrale Solaire Briffaut
Centrale Solaire Centre Ouest 2
Centrale Solaire Cet De Hesse
Centrale Solaire Chauveau
Centrale Solaire Chemin De Melette
Centrale Solaire De Cazedarnes
Centrale Solaire de la Med
Centrale Solaire Dom
Centrale Solaire Du Centre Ouest
Centrale Solaire Du Lavoir
60.00
Centrale Solaire Estarac
35.00
Centrale Solaire Ficon
Centrale Solaire Forum Laudun
Centrale Solaire Gare de Boussens
Centrale Solaire Golbey
Centrale Solaire Guinots
Centrale Solaire Heliovale
59.63
Centrale Solaire La Fenasse
Centrale Solaire La Metairie
Centrale Solaire La Potence
Centrale Solaire La Sauteirane
Centrale Solaire La Tastere
Centrale Solaire Le Castellet
Centrale Solaire Les Ancizes
Centrale Solaire Les Aspres
Centrale Solaire Les Canebieres
Centrale Solaire Les Cordeliers
83.98
Centrale Solaire Les Cordeliers 2
Centrale Solaire Les Galliennes
Centrale Solaire Lodes
Centrale Solaire Lyreco
Centrale Solaire Manosque Ombriere
Centrale Solaire Mazeran Lr
Centrale Solaire Mazeran Paca
Centrale Solaire Olinoca
Centrale Solaire Ombrieres Cap Agathois
Centrale Solaire Ombrieres De Blyes
Centrale Solaire Ombrieres P5
Centrale Solaire Pezenas
Centrale Solaire Piennes
Centrale Solaire Plateau De Pouls
Centrale Solaire Pont Sur Sambre
Centrale Solaire Quadrao
Centrale Solaire Quinipily 2
Centrale Solaire Sainte-Marie La Mare
Centrale Solaire SPW2
Centrale Solaire Supdevenergie
Centrale Solaire Toiture Josse
Centrale Solaire TQ1
Centrale Solaire Valorbi
Centrale Solaire Zabo
Centrale Solaire Zabo 2
Cerezo Solar, S.L.U.
Cidra Solar, S.L.U.
Co Biogaz
26.00
F-96
Cogenra Solar, Inc.
Colón LNG Marketing S. de R. L.
Panama
Cote d'Ivoire GNL
34.00
DAJA 148
DAJA 154
DAJA 160
ECA LNG Holdings B.V.
Eclipse Solar SPA
Chile
Edelweis Solar, S.L.U.
EDP Comercializadora S.A.U.
EDP Energia S.A.U.
Electricite Solaire De Molleges
Energie Developpement
Eole Boin
Eole Champagne Conlinoise
66.00
Eole Cote Du Moulin
Eole Fonds Caraibes
Eole Grand Maison
Eole La Montagne
87.60
Eole La Perriere S.A.R.L.
Eole Les Buissons
Eole Morne Carriere
Eole Morne Constant
Eole Moulin Tizon
Eole Pierrefitte Es Bois
Eole Sorbon II
Eole Yate
Eoliennes Arques 3
Eoliennes Du Champ Chardon
Eolmed
20.00
Falla Solar, S.L.U.
Fast Jung KB
Finansol 1
Finansol 2
Finansol 3
Fluxsol
Frieman & Wolf Batterietechnick GmbH
Gas Del Litoral SRLCV
25.00
Gfs I Holding Company, LLC
Glaciere De Palisse
Global Energy Armateur SNC
Global LNG Armateur S.A.S.
Global LNG Downstream S.A.S.
Global LNG North America Corporation
Global LNG S.A.S.
Global LNG UK Limited
Go Electric
Golden Fields Solar I, LLC
Goodfellow Solar Construction, LLC
Goodfellow Solar II, LLC
Goodfellow Solar III, LLC
Gray Whale Offshore Wind Power No.1 Co., Ltd
South Korea
Gray Whale Offshore Wind Power No.2 Co., Ltd
Greenflex Actirent Group, S.L.
Greenflex S.A.S.
GridVault DR1, LLC
Grillete Solar, S.L.U.
Gulf Total Tractebel Power Company PSJC
Helio 100 Kw
Helio 21
Helio 974 Sol 1
Helio 974 Toitures
Helio 974 Toiture 2
Helio Bakia
Helio Boulouparis
Helio Boulouparis 2
F-97
Helio Fonds Caraibes
Helio Koumac
Helio L'R
Helio Moindah
Helio Piin Patch
Helio Plaine des Gaiacs
Helio Popidery
Helio Reunion
Helio Saint Benoit
Helio Tamoa
Helio Temala
Helio Tontouta
Helio Wabealo
Helix Project III, LLC
Helix Project V, LLC
HETTY
Holding Eole 2018
Hydro Tinee
Hydromons
Ichthys LNG PTY Limited
Institut Photovoltaique D'Ile De France (IPVF)
43.00
Ise Total Nanao Power Plant G.K.
Japan
JDA Overseas Holdings, LLC
Jingdan New Energy investment (Shanghai) Co. Ltd
Jmcp
50.05
JOBS Tugboat, LLC
Komundo Offshore Wind Power Co., Ltd
LA Basin Solar I, LLC
La Compagnie Electrique de Bretagne
La Metairie Neuve
La Seauve
95.01
Lampiris S.A.
Belgium
Lanuza Solar, S.L.U.
Lemoore Stratford Land Holdings IV, LLC
Les Vents De Nivillac
Les Vents De Ranes
Leuret
Lincoln Solar Star, LLC
Luce Solar SPA
Luminora Solar cuatro, S.L.
Luminora Solar Dos, S.L.
Luminora Solar Tres, S.L.
Margeriaz Energie
Marysville Unified School District Solar, LLC
Mauricio Solar, S.L.U.
Maxeon Solar Technologies, Pte. Ltd.
36.40
Messigaz SNC
Methanergy
Missiles & Space Batteries Limited
Miyagi Osato Solar Park G.K.
45.00
Miyako Kuzakai Solarpark G.K.
Mojave Solar Investment, LLC
Moz LNG1 Financing Company Ltd
26.50
Moz LNG1 Holding Company Ltd
Mozambique MOF Company S.A.
Mozambique LNG Marine Terminal Company S.A.
Mulilo Prieska PV (RF) Proprietary Limited
27.00
National Gas Shipping Company Limited
NEM Solar Targetco, LLC
Nevada Joint Union High School District Solar, LLC
Nigeria LNG Limited
NorthStar Energy Management, LLC
NorthStar Energy Management Nevada, LLC
Nouvelle Centrale Eolienne de Lastours
Nuza Solar, S.L.U.
Nyk Armateur S.A.S.
F-98
Oman LNG, LLC
5.54
Parc Eolien Nordex III
Parc Eolien Nordex XXIX
Parc Eolien Nordex XXX
Parc Solaire De Servian
Parc Solaire De Servian 2
Parque Fotovoltaico Alicahue Solar SPA
Parque Fotovoltaico Santa Adriana Solar SPA
Chili
Partrederiet Bw Gas Global LNG
Perpetual Sunhine Solar Program I, LLC
Perpetual Sunshine I, LLC
Pilastra Solar, S.L.U.
Portalon Solar, S.L.U.
Pos
Pos Production Ii
Pos Production Iii
70.00
Pos Production Iv
Pos Production V
Postigo Solar, S.L.U.
Qatar Liquefied Gas Company Limited
Qatar Liquefied Gas Company Limited (II)
16.70
Quadrica
Quilla Solar, S.L.U.
RLA Solar SPA
Rosamond Raven Holdings, LLC
Saft (Zhuhai FTZ) Batteries Company Limited
Saft (Zhuhai) Energy Storage Co
Saft AB
Saft Acquisition S.A.S.
Saft America Inc.
Saft AS
Saft Australia PTY Limited
Saft Batterias SL
Saft Batterie Italia S.R.L.
Saft Batterien GmbH
Saft Batteries Pte Limited
Saft Batteries PTY Limited
Saft Batterijen B.V.
Saft Do Brasil Ltda
Saft EV S.A.S.
Saft Ferak AS
Czech Republic
Saft Groupe S.A.
Saft Hong Kong Limited
Hong Kong
Saft India Private Limited
Saft Japan KK
Saft Limited
Saft LLC
Saft Nife ME Limited
Saft S.A.S.
Seagreen HoldCo 1 Limited
SGS Antelope Valley Development, LLC
Shams Power Company PJSC
Societe Champenoise d'Energie
16.00
Societe d'exploitation de centrales photovoltaiques 1
25.86
Societe Economie Mixte Production Energetique Renouvelable
35.92
Solar Carport NJ, LLC
Solar Energies
Solar Sail, LLC
Solar Sail Commercial DevCo I, LLC
Solar Sail Commercial Holdings, LLC
Solar Sail Commercial MPW DevCo, LLC
Solar Star Always Low Prices Ct, LLC
Solar Star Always Low Prices Hi, LLC
Solar Star Always Low Prices Ma, LLC
Solar Star Arizona HMR-I, LLC
F-99
Solar Star Arizona II, LLC
Solar Star Arizona VII, LLC
Solar Star Bay City 2, LLC
Solar Star Bear Creek, LLC
Solar Star Big Apple CDG, LLC
Solar Star Big Apple BTM, LLC
Solar Star California I, LLC
Solar Star California IV, LLC
Solar Star California LXXV, LLC
Solar Star California LXXVI, LLC
Solar Star California XXXV, LLC
Solar Star California XXXVI, LLC
Solar Star California XXXVIII, LLC
Solar Star Co Co 1, LC
Solar Star Co Co 2, LLC
Solar Star Coastal Pirate, LLC
Solar Star Colorado II, LLC
Solar Star CRC Kern Front, LLC
Solar Star CRC Yowlumne 1 North, LLC
Solar Star CRC Yowlumne 2 South, LLC
Solar Star CRC North Shafter, LLC
Solar Star CRC Pier A West, LLC
Solar Star CRC Mt. Poso, LLC
Solar Star Deer Island, LLC
Solar Star Energy Center, LLC
Solar Star Golden Empire, LLC
Solar Star Harbor, LLC
Solar Star HD Maryland, LLC
Solar Star HD New Jersey, LLC
Solar Star HD New York, LLC
Solar Star Healthy 1, LLC
Solar Star Healthy Lake, LLC
Solar Star Hernwood, LLC
Solar Star Kale 1, LLC
Solar Star Khsd, LLC
Solar Star LA County High Desert, LLC
Solar Star LCR Culver City, LLC
Solar Star LCR Irvine, LLC
Solar Star LCR LA 1, LLC
Solar Star LCR LA 2, LLC
Solar Star LCR Split 1, LLC
Solar Star LCR Split 2, LLC
Solar Star Lincoln School, LLC
Solar Star MA - Tewksbury, LLC
Solar Star Massachusetts II, LLC
Solar Star Massachusetts III, LLC
Solar Star Maxx 1, LLC
Solar Star Meridian Park West, LLC
Solar Star Parent CRC Kern Front, LLC
Solar Star Parent CRC Mt. Poso, LLC
Solar Star Parent CRC North Shafter, LLC
Solar Star Parent CRC Pier A West, LLC
Solar Star Parent CRC Yowlumne 1 North, LLC
Solar Star Parent CRC Yowlumne 2 South, LLC
Solar Star Parkton, LLC
Solar Star Prairie Holding, LLC
Solar Star Prime 2, LLC
Solar Star Prime 3, LLC
Solar Star Prime 4, LLC
Solar Star Prime SCK3, LLC
Solar Star Rancho CWD I, LLC
Solar Star River, LLC
Solar Star Track, LLC
Solar Star Track Anacostia, LLC
Solar Star Track Cheverly, LLC
Solar Star Track Southern Ave 1, LLC
F-100
Solar Star Track Southern Ave 2, LLC
Solar Star Track Southern Ave Bus, LLC
Solar Star Tranquility, LLC
Solar Star Unkety Brook, LLC
Solar Star Urbana Landfill Central, LLC
Solar Star Urbana Landfill East, LLC
Solar Star Vegas 1, LLC
Solar Star Woodlands St Cr, LLC
SolarBridge Technologies Inc.
Solarstar Billerica I, LLC
Solarstar Ma I, LLC
Solarstar Prime I, LLC
SolarStorage Fund A, LLC
SolarStorage Fund B, LLC
SolarStorage Fund C, LLC
SolarStorage Fund D, LLC
South Hook LNG Terminal Company Limited
8.35
Spinnaker Solar, S.L.U.
SPWR SS 1, LLC
SPWR SunStrong Holdings, LLC
SSCA XLI Holding Company, LLC
SunPower AssetCo, LLC
SunPower Bobcat Solar, LLC
SunPower Capital Services, LLC
SunPower Capital, LLC
SunPower Commercial FTB Construction, LLC
SunPower Commercial Holding Company FTB SLB Parent, LLC
SunPower Commercial Holding Company FTB SLB, LLC
SunPower Corporation
SunPower Corporation, Systems
SunPower DevCo, LLC
SunPower Electrical of New York, LLC
SunPower Energia SPA
SunPower Energy Systems Canada Corporation
SunPower Equity Holdings, LLC
SunPower Foundation
SunPower Helix I, LLC
SunPower HoldCo, LLC
SunPower Manufacturing Oregon, LLC
SunPower North America, LLC
SunPower NY CDG 1,LLC
SunPower Philippines Limited - Regional Operating Headquarters
SunPower Revolver HoldCo I Parent, LLC
SunPower Revolver HoldCo I, LLC
SunPower Systems Mexico S. de R.L. de C.V.
SunPower Technologies Assetco Holdings, LLC
SunStrong Capital Acquisition 3, LLC
Sunstrong Capital Holdings, LLC
SunStrong Partners, LLC
Sunzil
Swingletree Operations, LLC
Tadiran Batteries GmbH
Tadiran Batteries Limited
Israel
Temasol
Morocco
Tenesol SPV 1
Tianneng Saft Energy Joint Stock Company
39.99
TIEA Energie
Total Carbon Neutrality Ventures Europe
Total Carbon Neutrality Ventures International
Total Direct Energie - Centrale Electrique Bayet
Total Direct Energie - Centrale Electrique Marchienne-au-Pont
Total Direct Energie - Centrale Electrique Saint Avold
Total Direct Energie Belgium
Total Direct Energie - Centrale Electrique de Toul
F-101
Total Direct Energie Generation
Total Direct Energie S.A.
Total Direct Energie Services
Total Direct Energies Centrale Electrique de Pont Sur Sambres
Total E&P Angola Developpement Gaz
Total E&P Australia
Total E&P Australia Exploration PTY Limited
Total E&P Australia II
Total E&P Australia III
Total E&P Barnett USA, LLC
Total E&P Holding Ichthys
Total E&P Holdings Australia PTY Limited
Total E&P Ichthys B.V.
Total E&P Indonesia Mentawai B.V.
Indonesia
Total E&P Indonesie
Total E&P Mauritius Holding Limited
Mauritius Island
Total E&P Mozambique Area 1, Limitada
Total E&P Oman Block 12 B.V.
Total E&P Oman Dev. B.V
Total E&P PNG 2 B.V.
Papua New Guinea
Total E&P PNG 5 B.V.
Total E&P PNG Limited
Total E&P Salmanov
Total E&P Sebuku
Total E&P Singapore Pte. Ltd.
Total E&P Yamal
Total Energia Italia S.R.L.
Total Energie Gas GmbH
Total Energy Investments Tianjin
Total Energy Services
Total Energy Ventures Emerging Markets
Total Eren (c)
29.60
Total Eren Holding
33.86
Total Gas & Power Actifs Industriels
Total Gas & Power Asia Private Limited
Total Gas & Power Brazil
Total Gas & Power Chartering Limited
Total Gas & Power Infrastructure Limited
Total Gas & Power Limited
Total Gas & Power North America Inc.
Total Gas & Power Services Limited
Total Gas and Power Limited, London, Meyrin - Geneva Branch
Switzerland
Total Gas Pipeline USA Inc.
Total Gas Y Electricidad Argentina S.A.
Total Gasandes
Total Gaz Electricite Holdings France
Total GLNG Australia
Total GLNG Australia Holdings
Total Investment Management Tianjin
Total LNG Angola
Total Midstream Holdings UK Limited
Total Nature Based Solutions
Total New Energies Limited
Total New Energies Ventures USA, Inc.
Total Offshore Wind Korea
Total Quadran
Total Quadran Caraibes
Total Qadran DK Aps
Total Quadran Nogara
Total Quadran Pacific
Total Renewables
Total Renewables USA, LLC
Total Solar Assets FZE
Total Solar Iberica, S.A.U.
Total Solar International
F-102
Total Solar Intl
Total Solar Latin America SPA
Total Solar Singapore Pte Ltd
Total Solar (Thailand) Co., Ltd.
Total Strong, LLC
Total SunPower Energia S.A.
Total Tengah
Total Tractebel Emirates O & M Company
Total Tractebel Emirates Power Company
Total USA International, LLC
Total Yemen LNG Company Limited
TQN Hydro
TQN Solar
TQN Solar Nogara
TQN Wind
Transportadora de Gas del Mercosur S.A.
32.68
Trofeo Solar, S.L.U.
TSGF SpA
Tugboat Commercial Pledgor, LLC
TW2 Tugboat, LLC
Ultralight 2 Class B Member, LLC
Ultralight 2 Holdco, LLC
Ultralight 2 Mezzanine Borrower, LLC
Ultralight 2 Mezzanine Pledgor, LLC
Ultralight 2 Residential Solar, LL
Ultralight 2 SolarBloom, LLC
Ultralight 2 SolarBloom Pledgor, LLC
Valorene
Vega Solar 1 S.A.P.I. de C.V.
Vega Solar 2 S.A.P.I. de C.V.
Vents D'Oc Energies Renouvelables
Vents D'Oc Centrale D'Energie Renouvelable 17
Vents D'Oc Centrale D'Energie Renouvelable 18
Vertigo
Watt Prox
Winergy
WP France 21
WP France 25
Yamal LNG (d)
29.73
Yemen LNG Company Limited
39.62
Zeeland Solar B.V.
F-103
operations
Appryl S.N.C
Atlantic Trading and Marketing Financial Inc.
Atlantic Trading and Marketing Inc.
Balzatex S.A.S.
Barry Controls Aerospace S.N.C.
BASF Total Petrochemicals LLC
Bay Junction Inc.
Bayport Polymers LLC
Borrachas Portalegre Ltda
Portugal
BOU Verwaltungs GmbH
Buckeye Products Pileline LP
14.66
Catelsa-Caceres S.A.U.
Cie Tunisienne du Caoutchouc S.A.R.L.
Tunisia
Composite Industrie Maroc S.A.R.L.
Composite Industrie S.A.
Cosden, LLC
COS-MAR Company
Cray Valley (Guangzhou) Chemical Company, Limited
Cray Valley Czech
Cray Valley HSC Asia Limited
Cray Valley Italia S.R.L.
Cray Valley S.A.
CSSA - Chartering and Shipping Services S.A.
Espa S.A.R.L.
Ethylene Est
99.98
Feluy Immobati
Fina Pipeline Co
FINA Technology, Inc.
Gasket (Suzhou) Valve Components Company, Limited
Gasket International S.R.L.
Grande Paroisse S.A.
Gulf Coast Pipeline LP
Hanwha Total Petrochemical Co. Limited
HBA Hutchinson Brasil Automotive Ltda
Hutchinson (UK) Limited
Hutchinson (Wuhan) Automotive Rubber Products Company Limited
Hutchinson Aeronautique & Industrie Limited
Hutchinson Aeroservices S.A.S.
Hutchinson Aerospace & Industry Inc.
Hutchinson Aerospace GmbH
Hutchinson Aftermarket USA Inc.
Hutchinson Antivibration Systems Inc.
Hutchinson Automotive Systems Company, Limited
Hutchinson Autopartes Mexico S.A. de C.V.
Hutchinson Borrachas de Portugal Ltda
Hutchinson Corporation
Hutchinson d.o.o Ruma
Serbia
Hutchinson Do Brasil S.A.
Hutchinson Fluid Management Systems Inc.
Hutchinson GmbH
Hutchinson Holding GmbH
Hutchinson Holdings UK Limited
Hutchinson Iberia S.A.
Hutchinson Industrial Rubber Products (Suzhou) Company, Limited
Hutchinson Industrias Del Caucho SAU
Hutchinson Industries Inc.
Hutchinson Japan Company Limited
Hutchinson Korea Limited
Hutchinson Maroc S.A.R.L. AU
Hutchinson Poland SP ZO.O.
Poland
Hutchinson Polymers S.N.C.
F-104
Hutchinson Porto
Hutchinson Precision Sealing Systems Inc.
Hutchinson Research & Innovation Singapore PTE. Limited
Hutchinson Rubber Products Private Limited Inde
Hutchinson S.A.
Hutchinson S.N.C.
Hutchinson S.R.L. (Italie)
Hutchinson S.R.L. (Roumanie)
Romania
Hutchinson Sales Corporation
Hutchinson Seal De Mexico S.A. de CV.
Hutchinson Sealing Systems Inc.
Hutchinson SRO
Hutchinson Stop - Choc GmbH & CO. KG
Hutchinson Suisse S.A.
Hutchinson Transferencia de Fluidos S.A. de C.V.
Hutchinson Tunisie S.A.R.L.
Hutchinson Vietnam Company Limited
Vietnam
Industrias Tecnicas De La Espuma SL
Industrielle Desmarquoy S.N.C.
Jehier S.A.S.
99.89
Joint Precision Rubber
KTN Kunststofftechnik Nobitz GmbH
Laffan Refinery Company Limited
Laffan Refinery Company Limited 2
LaPorte Pipeline Company LP
20.16
LaPorte Pipeline GP LLC
19.96
Le Joint Francais S.N.C.
Legacy Site Services Funding Inc.
Legacy Site Services LLC
Les Stratifies S.A.S.
Lone Wolf Land Company
Machen Land Limited
Mide Technology Corporation
Naphtachimie
Novogy, Inc.
Olutex Oberlausitzer Luftfahrttextilien GmbH
Pamargan (Malta) Products Limited
Malta
Pamargan Products Limited
Paulstra S.N.C.
Paulstra Silentbloc S.A.
PFW Aerospace GmbH
PFW Havacilik Sanayi ve Dis Ticaret Limited Sirtketi
Turkey
PFW Uk Machining Ltd.
Polyblend GmbH
Qatar Petrochemical Company Q.S.C. (QAPCO)
Qatofin Company Limited
49.09
Resilium
Retia
Retia USA LLC
San Jacinto Rail Limited
17.00
Saudi Aramco Total Refining & Petrochemical Company
Saoudia Arabia
SigmaKalon Group B.V.
Societe Bearnaise De Gestion Industrielle
Societe du Pipeline Sud-Europeen
35.14
SPA Sonatrach Total Entreprise de Polymères
Stillman Seal Corporation
Stop-Choc (UK) Limited
Synova
Techlam S.A.S.
Thermal Control Systems Automotive Sasu
Total Activites Maritimes
Total Atlantic Trading Mexico SA De CV
Total Corbion PLA B.V.
Total Country Services Belgium
Total Deutschland GmbH (e)
F-105
Total Downstream UK PLC
Total Energy Marketing A/S
Total European Trading
Total Laffan Refinery
Total Laffan Refinery II B.V.
Total Lindsey Oil Refinery Limited
Total New Energies USA, Inc.
Total Olefins Antwerp
Total Opslag En Pijpleiding Nederland NV
55.00
Total PAR LLC
Total Petrochemicals (Hong Kong) Limited
Total Petrochemicals (Shangai) Limited
Total Petrochemicals Development Feluy
Total Petrochemicals Ecaussinnes
Total Petrochemicals Feluy
Total Petrochemicals France
Total Petrochemicals Iberica
Total Petrochemicals Pipeline USA Inc.
Total Petrochemicals UK Limited
Total Polymers Antwerp
Total Raffinaderij Antwerpen N.V.
Total Raffinage France
Total Raffinerie Mitteldeutschland GmbH
Total Refining & Chemicals
Total Refining & Chemicals Saudi Arabia S.A.S.
Total Research & Technology Feluy
Total Splitter USA Inc
Total Trading and Marketing Canada LP
Total Trading Asia Pte Limited
Total Trading Canada Limited
Total Trading Products S.A.
TOTSA Total Oil Trading S.A.
Totseanergy
Transalpes S.N.C.
67.00
Trans-Ethylene
Tssa Total Storage & Services S.A.
Vibrachoc S.A.U.
Zeeland Refinery NV
o
Air Total (Suisse) S.A.
Air Total International S.A.
Alvea
Antilles Gaz
Argedis
Aristea
Arteco
AS 24
AS24 Belgie N.V.
AS24 Espanola S.A.
AS24 Fuel Cards Limited
AS24 Lithuanie
Lithunia
AS24 Polska SP ZO.O.
AS24 Tankservice GmbH
Charvet La Mure Bianco
Clean Energy
25.63
Compagnie Petroliere de l'Ouest - CPO
Cristal Marketing Egypt
84.62
Total Proxi Energies Nord Est
Elf Oil UK Aviation Limited
Elf Oil UK Properties Limited
Fioulmarket.fr
Gapco Kenya Limited
Gapco Tanzania Limited
Tanzania
Guangzhou Elf Lubricants Company Limited
77.00
F-106
Gulf Africa Petroleum Corporation
Lubricants Vietnam Holding Limited
National Petroleum Refiners Of South Africa (PTY) Limited
18.22
Progeres S.A.S.
Quimica Vasca S.A.U.
Saudi Total Petroleum Products
Servauto Nederland B.V.
Societe d'exploitation de l'usine de Rouen
98.98
Societe mahoraise de stockage de produits petroliers
Societe Urbaine des Petroles
S-Oil Total Lubricants Company Limited
South Asia LPG Private Limited
Stedis
Tas'Helat Marketing Company
Total (Africa) Limited
Total (Fiji) Limited
Fiji Islands
Total Additifs et Carburants Speciaux
Total Africa S.A.
Total Aviation & Export Limited
Zambia
Total Belgium
Total Bitumen Deutschland GmbH
Total Bitumen UK Limited
Total Botswana (PTY) Limited
50.10
Botswana
Total Brasil Diesel Comercio e Transportes Ltda
Total Brasil Distribuidora Ltda
Total Burkina
Burkina Faso
Total Cambodge
Total Cameroun
67.01
Cameroon
Total Caraibes
Total Ceska Republika S.R.O.
Total China Investment Company Limited
Total Congo
Total Corse
Total Cote D'Ivoire
72.99
Total Denmark A/S
Total Egypt
Total Espana S.A.
Total Especialidades Argentina
Total Ethiopia
Ethiopia
Total Fluides
Total Freeport Corporation
Total Fuels Wuhan Company Limited
Total Glass Lubricants Europe GmbH
Total Guadeloupe
Guadeloupe
Total Guinea Ecuatorial
Equatorial Guinea
Total Guinee
Guinea
Total Holding Asie
Total Holding India
Total Italia
Total Jamaica Limited
Jamaica
Total Jordan PSC
Jordan
Total Kenya
93.96
Total Liban
Total Liberia Inc.
Liberia
Total Lubricants (China) Company Limited
Total Lubricants Taiwan Limited
63.00
Taiwan
Total Lubrifiants
Total Lubrifiants Algerie
78.90
Total Lubrifiants Service Automobile
Total Luxembourg S.A.
Luxembourg
Total Madagasikara S.A.
79.44
Madagascar
Total Malawi Limited
Malawi
Total Mali
Mali
Total Marine Fuels
Total Marketing Egypt
F-107
Total Marketing et Services Angola S.A.
Total Marketing France
Total Marketing Gabon
Total Marketing Middle East Free Zone
Total Marketing Services
Total Marketing Tchad
Chad
Total Marketing Uganda
Total Maroc
Total Mauritius
Total Mayotte
Mayotte
Total Mexico S.A. de C.V.
Total Mineraloel und Chemie GmbH
Total Mineralol GmbH
Total Mozambique
Total Namibia (PTY) Limited
Total Nederland NV
Total Niger S.A.
Niger
Total Nigeria PLC
61.72
Total Oil Asia-Pacific Pte Limited
Total Oil India Private Limited
Total Outre-Mer
Total Pacifique
New Caledonia
Total Paiement Services
Total Parco Pakistan Limited
Pakistan
Total Petroleum (Shanghai) Company Limited
Total Petroleum Ghana Limited
76.74
Ghana
Total Petroleum Puerto Rico Corp.
Puerto Rico
Total Philippines Corporation
Total Polska
Total Polynesie
French Polynesia
Total RDC
Total Reunion
Reunion
Total Romania S.A.
Total Senegal
69.14
Total Singapore Shared Services Pte Limited
Total Sinochem Fuels Company Limited
Total Sinochem Oil Company Limited
Total South Africa (PTY) Limited
Total Specialties USA Inc.
Total Supply MS S.A.
Total Swaziland (PTY) Limited
Swaziland
Total Tanzania Limited
Total Tianjin Manufacturing Company Limited
Total Togo
76.72
Togo
Total Tunisie
Total Turkey Pazarlama
Total UAE LLC
Total Uganda Limited
Total UK Limited
Total Ukraine LLC
Ukraine
Total Vietnam Limited
Total Vostok
Total Zambia
Total Zimbabwe
80.00
Zimbabwe
Totalgaz Vietnam LLC
Trapil
35.50
Upbeatprops 100 PTY Limited
V Energy S.A.
Dominican Republic
F-108
Albatros
Elf Aquitaine Fertilisants
Elf Aquitaine Inc.
Elf Forest Products LLC
Omnium Reinsurance Company S.A.
Pan Insurance Limited
Septentrion Participations
Socap S.A.S.
Societe Civile Immobiliere CB2
Sofax Banque
Total American Services Inc.
Total Capital
Total Capital Canada Limited
Total Capital International
Total Consulting
Total Corporate Management (Beijing) Company Limited
Total Delaware Inc.
Total Developpement Regional S.A.S.
Total Digital Factory
Total Facilities Management Services (TFMS)
Total Finance
Total Finance Corporate Services Limited
Total Finance Global Services (TOFIG)
Total Finance international B.V.
Total Finance Nederland B.V.
Total Finance USA Inc.
Total Funding Nederland B.V.
Total Funding Nederland International B.V.
Total Gestion Filiales
Total Gestion USA
Total Global Financial Services
Total Global Human Ressources Services
Total Global Information Technology Services Belgium
Total Global IT Services (TGITS)
Total Global Procurement (TGP)
Total Global Procurement Belgium S.A. (TGPB)
Total Global Services Bucharest
99.01
Total Global Services Philippines
Total Holding Allemagne
Total Holdings Europe
Total Holdings International B.V.
Total Holdings S.A.S.
Total Holdings UK Limited
Total Holdings USA Inc.
Total International NV
Total Investments
Total Learning Solutions (TLS)
Total Operations Canada Limited
Total Overseas Holding (PTY) Limited
Total Participations
Total Petrochemicals & Refining S.A./NV (e)
Total Petrochemicals & Refining USA Inc. (e)
Total Petrochemicals Security USA Inc.
Total Resources (Canada) Limited
TOTAL S.E.
Total Treasury
Total UK Finance Limited
F-109