UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
October 27, 2022
Commission File Number 001-10888
TotalEnergies SE
(Translation of registrant’s name into English)
2, place Jean Millier
La Défense 6
92400 Courbevoie
France
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F x Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
THIS REPORT ON FORM 6-K SHALL BE DEEMED TO BE INCORPORATED BY REFERENCE IN THE REGISTRATION STATEMENT ON FORM F-3 (NOS. 333-255641, 333-255641-01, 333-255641-02 AND 333-255641-03) OF TOTALENERGIES SE, TOTALENERGIES CAPITAL INTERNATIONAL, TOTALENERGIES CAPITAL CANADA LTD. AND TOTALENERGIES CAPITAL AND THE REGISTRATION STATEMENT ON FORM S-8 (NO. 333-264261) OF TOTALENERGIES SE, AND TO BE PART THEREOF FROM THE DATE ON WHICH THIS REPORT IS FURNISHED, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED OR FURNISHED.
TotalEnergies SE is providing on this Form 6-K its results for the third quarter of 2022 and nine months ended September 30, 2022, a description of certain recent developments relating to its business, as well as a capitalization table as of September 30, 2022.
EXHIBIT INDEX
Exhibit No. | Description |
Exhibit 99.1 | Results for the Third Quarter of 2022 and Nine Months Ended September 30, 2022 |
Exhibit 99.2 | Recent Developments |
Exhibit 99.3 | Capitalization and Indebtedness |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
TotalEnergies SE | |||
Date: October 27, 2022 | By: | /s/ MARIE-SOPHIE WOLKENSTEIN | |
Name: | Marie-Sophie Wolkenstein | ||
Title: | Company Treasurer |
Exhibit 99.1
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The terms "TotalEnergies", "TotalEnergies company" and "Company" in this exhibit are used to designate TotalEnergies SE and the consolidated entities directly or indirectly controlled by TotalEnergies SE.
The financial information on pages 1-20 of this exhibit concerning TotalEnergies with respect to the third quarter of 2022 and nine months ended September 30, 2022 has been derived from TotalEnergies’ unaudited consolidated balance sheets as of September 30, 2022, unaudited statements of income, comprehensive income, cash flow and business segment information for the third quarter of 2022 and nine months ended September 30, 2022 and unaudited consolidated statements of changes in shareholders’ equity for the nine months ended September 30, 2022 on pages 22 et seq. of this exhibit.
The following discussion should be read in conjunction with the aforementioned financial statements and with the information, including TotalEnergies’ audited consolidated financial statements and related notes, provided in TotalEnergies’ Annual Report on Form 20-F for the year ended December 31, 2021, filed with the Securities and Exchange Commission (“SEC”) on March 25, 2022.
A. | KEY FIGURES |
3Q22 | 9M22 | |||||||||||||
vs | in millions of dollars, | vs | ||||||||||||
3Q22 | 2Q22 | 3Q21 | 3Q21 | except earnings per share and number of shares | 9M22 | 9M21 | 9M21 | |||||||
69,037 | 74,774 | 54,729 | +26% | Sales | 212,417 | 145,515 | +46% | |||||||
19,420 | 18,737 | 11,180 | +74% | Adjusted EBITDA1 | 55,581 | 28,017 | +98% | |||||||
10,279 | 10,500 | 5,374 | +91% | Adjusted net operating income2 from business segments | 30,237 | 12,893 | x2.3 | |||||||
4,217 | 4,719 | 2,726 | +55% | Exploration & Production | 13,951 | 6,914 | x2 | |||||||
3,649 | 2,555 | 1,608 | x2.3 | Integrated Gas, Renewables & Power | 9,255 | 3,484 | x2.7 | |||||||
1,935 | 2,760 | 602 | x3.2 | Refining & Chemicals | 5,815 | 1,356 | x4.3 | |||||||
478 | 466 | 438 | +9% | Marketing & Services | 1,216 | 1,139 | +7% | |||||||
(108) | (1,546) | 1,377 | ns | Net income (loss) from equity affiliates | (1,611) | 1,578 | ns | |||||||
2.56 | 2.16 | 1.71 | +50% | Fully-diluted earnings per share ($) | 6.57 | 3.74 | +76% | |||||||
2,560 | 2,592 | 2,655 | -4% | Fully-diluted weighted-average shares (millions) | 2,589 | 2,648 | -2% | |||||||
6,626 | 5,692 | 4,645 | +43% | Net income (TotalEnergies share) | 17,262 | 10,195 | +69% | |||||||
3,116 | 2,819 | 2,813 | +11% | Organic investments3 | 7,916 | 7,993 | -1% | |||||||
1,587 | 2,076 | (958) | ns | Net acquisitions4 | 4,585 | 1,029 | x4.5 | |||||||
4,703 | 4,895 | 1,855 | x2.5 | Net investments5 | 12,501 | 9,022 | +39% | |||||||
17,848 | 16,284 | 5,640 | x3.2 | Cash flow from operating activities6 | 41,749 | 18,789 | x2.2 | |||||||
of which: | ||||||||||||||
7,407 | 2,498 | (2,698) | ns | (increase) decrease in working capital | 4,982 | (2,848) | ns | |||||||
(304) | (399) | (330) | ns | financial charges | (1,071) | (1,121) | ns |
1 | Adjusted EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization) corresponds to the adjusted earnings before depreciation, depletion and impairment of tangible and intangible assets and mineral interests, income tax expense and cost of net debt, i.e., all operating income and contribution of equity affiliates to net income. The reconciliation of net income (TotalEnergies share) to adjusted EBITDA is set forth under “Reconciliation Of Net Income (TotalEnergies Share) To Adjusted EBITDA” on page 18 of this exhibit. | |
2 | Adjusted results are defined as income using replacement cost, adjusted for special items, excluding the impact of changes for fair value. See pages 4 et seq. “Analysis of business segment results” below for further details. | |
3 | Organic investments = net investments excluding acquisitions, asset sales and other operations with non-controlling interests. | |
4 | Net acquisitions = acquisitions - assets sales - other transactions with non-controlling interests (see page 18). | |
5 | Net investments = organic investments + net acquisitions (see “Investments – Divestments’” on page 18). | |
6 | See also “C. TotalEnergies results – Cash Flow”. The reconciliation table for different cash flow figures is set forth under “Cash Flow” on page 19 of this exhibit. |
1
Key figures of environment, greenhouse gas emissions and production
Environment* — liquids and gas price realizations, refining margins
3Q22 | 9M22 | |||||||||||||
vs | vs | |||||||||||||
3Q22 | 2Q22 | 3Q21 | 3Q21 | 9M22 | 9M21 | 9M21 | ||||||||
100.8 | 113.9 | 73.5 | +37% | Brent ($/b) | 105.5 | 67.9 | +55% | |||||||
7.9 | 7.5 | 4.3 | +84% | Henry Hub ($/Mbtu) | 6.7 | 3.3 | x2 | |||||||
42.5 | 22.2 | 16.9 | x2.5 | NBP** ($/Mbtu) | 32.4 | 10.8 | x3 | |||||||
46.5 | 27.0 | 18.6 | x2.5 | JKM*** ($/Mbtu) | 34.9 | 12.9 | x2.7 | |||||||
93.6 | 102.9 | 67.1 | +40% | Average price of liquids ($/b) Consolidated subsidiaries |
95.4 | 62.2 | +53% | |||||||
16.83 | 11.01 | 6.33 | x2.7 | Average price of gas ($/Mbtu) Consolidated subsidiaries |
13.28 | 4.95 | x2.7 | |||||||
21.51 | 13.96 | 9.10 | x2.4 | Average price of LNG ($/Mbtu) Consolidated subsidiaries and equity affiliates |
16.26 | 7.25 | x2.2 | |||||||
99.2 | 145.7 | 8.8 | x11.3 | Variable cost margin – Refining Europe, VCM ($/t)**** | 100.3 | 8.0 | x12.5 |
* The indicators are shown on page 21.
** NBP (National Balancing Point) is a virtual natural gas trading point in the United Kingdom for transferring rights in respect of physical gas and which is widely used as a price benchmark for the natural gas markets in Europe. NBP is operated by National Grid Gas plc, the operator of the UK transmission network.
*** JKM (Japan-Korea Marker) measures the prices of spot LNG trades in Asia. It is based on prices reported in spot market trades and/or bids and offers collected after the close of the Asian trading day at 16:30 Singapore time.
****This indicator represents TotalEnergies’ average margin on variable cost for refining in Europe (equal to the difference between TotalEnergies’ European refined product sales and crude oil purchases with associated variable costs divided by volumes refined in tons). 3Q21 and 9M21 data as disclosed in 2021 included the restatement of 3Q21 figures to reflect 2Q21 environment for energy costs.
The average LNG selling price was up 54% in the third quarter compared to the previous quarter, benefiting on a lagged basis from the increase in oil and gas price indexes on long-term contracts as well as high spot gas prices.
Greenhouse gas emissions (GHG)1
3Q22 | 2Q22 | 3Q21 | 3Q22 vs 3Q21 |
GHG emissions (MtCO2e) | 9M22 | 9M21 | 9M22 vs 9M21 | |||||||
10.3 | 9.6 | 9.3 | +10% | Scope 1+2 from operated facilities2 | 29.6 | 27.1 | +9% | |||||||
14.0 | 13.4 | - | ns | Scope 1+2 – equity share | 41.4 | - | ns | |||||||
90 | 94 | 100 | -10% | Scope 3 from Oil & Gas Worldwide3 | 282 | 293 | -4% | |||||||
65 | 65 | 74 | -12% | of which Scope 3 Oil Worldwide4 | 196 | 210 | -7% |
Estimated 2022 quarterly emissions. 2021 quarterly equity share data are not available.
Excluding Covid-19 effect for emissions data from 2Q20 through 2Q22.
1 The six greenhouse gases in the Kyoto protocol, namely CO2, CH4, N2O, HFCs, PFCs and SF6, with their respective GWP (Global Warming Potential) as described in the 2007 IPCC report. HFCs, PFCs and SF6 are virtually absent from the Company’s emissions or are considered as non-material and are therefore not counted.
2 Scope 1+2 GHG emissions of operated facilities are defined as the sum of direct emissions of greenhouse gases from sites or activities that are included in the scope of reporting (as defined in the Company’s 2021 annual report on Form 20-F filed on March 25, 2022) and indirect emissions attributable to brought-in energy (electricity, heat, steam), excluding purchased industrial gases (H2).
3 TotalEnergies reports Scope 3 GHG emissions, category 11, which correspond to indirect GHG emissions related to the use by customers of energy products, i.e., combustion of the products to obtain energy. The Company follows the oil & gas industry reporting guidelines published by IPIECA, which comply with the GHG Protocol methodologies. In order to avoid double counting, this methodology accounts for the largest volume in the oil and gas value chain, i.e., the higher of the two production volumes or sales to end customers. For TotalEnergies, in 2021 and 2022, the calculation of Scope 3 GHG emissions for the oil value chain considers oil products and biofuels sales (higher than production) and for the gas value chain, gas sales either as LNG or as part of direct sales to B2B/B2C customers (higher than or equivalent to marketable gas production).
4 Scope 3 GHG emissions, category 11, which correspond to indirect GHG emissions related to the sale of petroleum products (including biofuels).
3Q22 | 2Q22 | 3Q21 | 3Q22 vs 3Q21 |
Methane emissions (ktCH4) | 9M22 | 9M21 | 9M22 vs 9M21 | |||||||
10 | 10 | 12 | -16% | Methane emissions from operated facilities | 31 | 37 | -16% | |||||||
14 | 13 | - | ns | Methane emissions - equity share | 38 | - | ns |
Estimated 2022 quarterly emissions. 2021 quarterly equity share data are not available
2
The evolution of Scope 1+2 emissions from the operated facilities resulted from the high-capacity utilization of combined-cycle gas turbines (CCGTs) and refineries in Europe, including the restart of the Donges refinery in France.
Production*
3Q22 | 2Q22 | 3Q21 | 3Q22 vs 3Q21 |
Hydrocarbon production | 9M22 | 9M21 | 9M22 vs 9M21 | |||||||
2,669 | 2,738 | 2,814 | -5% | Hydrocarbon production (kboe/d) | 2,750 | 2,808 | -2% | |||||||
1,298 | 1,268 | 1,288 | +1% | Oil (including bitumen) (kb/d) | 1,291 | 1,272 | +1% | |||||||
1,371 | 1,470 | 1,526 | -10% | Gas (including condensates and associated NGL) (kboe/d) | 1,459 | 1,535 | -5% |
2,669 | 2,738 | 2,814 | -5% | Hydrocarbon production (kboe/d) | 2,750 | 2,808 | -2% | |||||||
1,494 | 1,483 | 1,517 | -2% | Liquids (kb/d) | 1,501 | 1,496 | - | |||||||
6,367 | 6,835 | 7,070 | -10% | Gas (Mcf/d) | 6,785 | 7,161 | -5% |
* Company production = production of Exploration & Production segment (EP) + production of Integrated Gas, Renewables & Power segment (iGRP).
Hydrocarbon production was 2,669 thousand barrels of oil equivalent per day (kboe/d) in the third quarter of 2022, down 5% year-on-year, comprised of:
● | +3% due to the start-up and ramp-up of projects including Clov Phase 2 and Zinia Phase 2 in Angola, Mero 1 in Brazil and Ikike in Nigeria, | |
● | +2% due to the increase in OPEC+ production quotas, | |
● | -3% due to higher planned maintenance, particularly on Ichthys, and unplanned shutdowns on Kashagan, | |
● | -3% portfolio effect, notably related to the end of the operating licenses for Qatargas 1 and Bongkot North in Thailand, as well as the effective withdrawal from Myanmar, partially offset by the entry into the Sepia and Atapu producing fields in Brazil, | |
● | -1% due to security-related production cuts in Libya and Nigeria, | |
● | -1% due to the price effect, | |
● | -2% due to the natural decline of the fields. |
Compared to the previous quarter, production was down by 2.5%, mainly due to planned maintenance, notably at Ichthys, and unplanned shutdowns at Kashagan, partially offset by the entry into production fields of Sepia and Atapu and the ramp-up of Mero 1 in Brazil.
3
B. ANALYSIS OF BUSINESS SEGMENT RESULTS
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 TotalEnergies and which is reviewed by the main operational decision-making body of TotalEnergies, namely the Executive Committee.
Due to their unusual nature or particular 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. 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 occur again in following years.
In accordance with IAS 2, TotalEnergies 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. 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 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 TotalEnergies’ 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. TotalEnergies, in its trading activities, enters into storage contracts, the future effects of which are recorded at fair value in TotalEnergies’ internal economic performance. IFRS precludes recognition of this fair value effect. Furthermore, TotalEnergies 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 business segment results (adjusted operating income, adjusted net operating income, adjusted net income) are defined as replacement cost results, adjusted for special items, excluding 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 TotalEnergies’ interim consolidated financial statements, see pages 34 et seq. of this exhibit.
TotalEnergies 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. 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.
4
B.1. Integrated Gas, Renewables & Power segment (iGRP)
1. Production and sales of Liquefied Natural Gas (LNG) and electricity
3Q22 | 2Q22 | 3Q21 | 3Q22 vs 3Q21 |
Hydrocarbon production for LNG | 9M22 | 9M21 | 9M22 vs 9M21 | |||||||
418 | 462 | 533 | -21% | iGRP (kboe/d) | 458 | 518 | -12% | |||||||
40 | 53 | 67 | -41% | Liquids (kb/d) | 51 | 61 | -17% | |||||||
2,067 | 2,233 | 2,527 | -18% | Gas (Mcf/d) | 2,216 | 2,489 | -11% |
3Q22 | 2Q22 | 3Q21 | 3Q22 vs 3Q21 |
Liquefied Natural Gas in Mt | 9M22 | 9M21 | 9M22 vs 9M21 | |||||||
10.4 | 11.7 | 10.0 | +5% | Overall LNG sales | 35.4 | 30.4 | +16% | |||||||
4.0 | 4.1 | 4.3 | -6% | including sales from equity production* | 12.6 | 12.8 | -2% | |||||||
9.2 | 10.2 | 8.3 | +12% | including sales by TotalEnergies from equity production and third-party purchases | 31.4 | 25.0 | +26% |
* The Company’s equity production may be sold by TotalEnergies or by the joint ventures.
Third quarter 2022 LNG production was down 6% year-on-year, mainly due to the end of the Qatargas 1 operating license, planned maintenance on Ichthys LNG in Australia as well as the decrease in gas supply to NLNG in Nigeria for security reasons.
Overall LNG sales were down 10% in the third quarter 2022 compared to the previous quarter, mainly due to the outage at Freeport LNG, planned maintenance at Ichthys LNG, and a shutdown of production at Idku LNG in Egypt due to insufficient gas supply.
Nevertheless, third quarter 2022 overall LNG sales were up 5% year-on-year, mainly due to the increase in spot purchases to maximize the use of the Company's regasification capacity in Europe and to seize opportunities in a volatile market.
3Q22 | 2Q22 | 3Q21 | 3Q22 vs 3Q21 |
Renewables & Electricity | 9M22 | 9M21 | 9M22 vs 9M21 | |||||||
67.8 | 50.7 | 42.7 | +59% | Portfolio of renewable power generation gross capacity (GW)1,2,3 | 67.8 | 42.7 | +59% | |||||||
16.0 | 11.6 | 9.5 | +68% | o/w installed capacity | 16.0 | 9.5 | +68% | |||||||
5.4 | 5.2 | 6.1 | -11% | o/w capacity in construction | 5.4 | 6.1 | -11% | |||||||
46.4 | 33.9 | 27.1 | +71% | o/w capacity in development | 46.4 | 27.1 | +71% | |||||||
33.9 | 26.8 | 26.6 | +28% | Gross renewables capacity with PPA (GW)1,2,3 | 33.9 | 26.6 | +28% | |||||||
45.2 | 38.4 | 31.7 | +43% | Portfolio of renewable power generation net capacity (GW)1,3 | 45.2 | 31.7 | +43% | |||||||
7.4 | 5.8 | 4.7 | +59% | o/w installed capacity | 7.4 | 4.7 | +59% | |||||||
3.5 | 3.7 | 4.0 | -12% | o/w capacity in construction | 3.5 | 4.0 | -12% | |||||||
34.2 | 28.9 | 23.0 | +49% | o/w capacity in development | 34.2 | 23.0 | +49% | |||||||
8.5 | 7.7 | 4.7 | +79% | Net power production (TWh)4 | 23.7 | 14.5 | +64% | |||||||
2.4 | 2.5 | 1.7 | +42% | incl. Power production from renewables | 7.1 | 4.9 | +45% | |||||||
6.3 | 6.2 | 6.0 | +5% | Clients power - BtB and BtC (Million)3 | 6.3 | 6.0 | +5% | |||||||
2.8 | 2.7 | 2.7 | +1% | Clients gas - BtB and BtC (Million)3 | 2.8 | 2.7 | +1% | |||||||
12.1 | 12.3 | 11.7 | +3% | Sales power - BtB and BtC (TWh) | 40.7 | 40.5 | +1% | |||||||
14.2 | 19.1 | 13.2 | +7% | Sales gas - BtB and BtC (TWh) | 68.3 | 70.0 | -3% |
1 Includes 20% of Adani Green Energy Ltd’s (AGEL) gross capacity effective first quarter 2021.
2 Includes 50% of Clearway Energy Group’s gross capacity effective third quarter 2022.
3 End of period data.
4 Solar, wind, biogas, hydroelectric and combined-cycle gas turbine (CCGT) plants.
Gross installed renewable power generation capacity reached 16.0 GW at the end of the third quarter 2022, up 4.4 GW from the previous quarter, including 3.8 GW related to the acquisition of 50% of Clearway Energy Group in the United States and 160 MW related to the start-up of the Seagreen offshore wind farm in Scotland.
Gross power generation capacity in development increased by 12.5 GW quarter-on-quarter, mainly due to the acquisition of 50% of Clearway Energy Group in the United States.
Net electricity generation stood at 8.5 TWh in the third quarter 2022, up 79% year-on-year due to higher utilization rates of flexible power plants (CCGT) as well as growth in electricity generation from renewable sources.
5
2. Results
3Q22 | 2Q22 | 3Q21 | 3Q22 vs 3Q21 |
in millions of dollars | 9M22 | 9M21 | 9M22 vs 9M21 | |||||||
11,495 | 10,281 | 8,482 | x1.4 | External sales | 34,070 | 19,070 | x1.8 | |||||||
2,305 | 846 | 876 | x2.6 | Operating income | 4,963 | 1,936 | x2.6 | |||||||
3,190 | 823 | 782 | x4.1 | Net income (loss) from equity affiliates and other items | 1,513 | 1,464 | +3% | |||||||
(777) | (260) | (208) | x3.7 | Tax on net operating income | (1,331) | (365) | x3.6 | |||||||
4,718 | 1,409 | 1,450 | x3.3 | Net operating income | 5,145 | 3,035 | +70% | |||||||
(1,069) | 1,146 | 158 | ns | Adjustments affecting net operating income | 4,110 | 449 | x9.2 | |||||||
3,649 | 2,555 | 1,608 | x2.3 | Adjusted net operating income* | 9,255 | 3,484 | x2.7 | |||||||
1,888 | 1,219 | 755 | x2.5 | including adjusted income from equity affiliates | 4,537 | 1,375 | x3.3 | |||||||
653 | 341 | 639 | +2% | Organic investments | 1,253 | 2,150 | -42% | |||||||
1,718 | (58) | (941) | ns | Net acquisitions | 2,301 | 1,119 | x2.1 | |||||||
2,371 | 283 | (302) | ns | Net investments | 3,554 | 3,269 | +9% |
*Detail of adjustment items shown in the business segment information starting on page 34 of this exhibit.
Adjusted net operating income for the iGRP segment was:
● | $3,649 million in the third quarter 2022, 2.3 times the same quarter last year, due to higher LNG prices, the performance of gas, LNG and electricity trading activities and the growing contribution of Electricity & Renewables, | |
● | $9,255 million over the first nine months of 2022, 2.7 times the same period last year for the same reasons. |
Adjusted net operating income for the iGRP segment excludes special items. The exclusion of special items had:
● | a negative impact of $1,069 million in the third quarter 2022 on the segment’s adjusted net operating income, compared to a positive impact of $158 million in the third quarter 2021, | |
● | a positive impact of $4,110 million in the first nine months 2022 on the segment’s adjusted net operating income, compared to a positive impact of $449 million in the first nine months 2021. |
The segment’s operating cash flow before working capital changes without financial charges (DACF)1 was:
● | $2,683 million in the third quarter 2022, an increase of 56% compared to $1,720 million in the third quarter 2021, due to higher LNG prices, the performance of gas, LNG and electricity trading activities and the growing contribution of Electricity & Renewables, despite a lag effect on dividends received from equity affiliates, | |
● | $7,628 million over the first nine months of 2022, 2.1 times higher than the first nine months of 2021 for the same reasons. |
The segment’s cash flow from operations excluding financial charges, except those related to leases was:
● | a positive impact of $4,390 million for the third quarter 2022, compared to a negative impact of $463 million in the third quarter 2021 mainly due to the positive impact on working capital requirements of margin call reductions and the seasonality of the gas and electricity supply business, | |
● | $8,675 million for the first nine months of 2022, 9.8 times higher than $884 million in the first nine months of 2021. |
1 DACF= debt adjusted cash flow. Operating cash flow before working capital changes without financial charges of the segment is defined as cash flow from operating activities before changes in working capital at replacement cost, without financial charges except those related to leases, excluding the impact of contracts recognized at fair value for the segment and including capital gains on the sale of renewable projects. For information on the replacement cost method, refer to “B. Analysis of Business Segment Results”, above.
6
B.2. Exploration & Production segment
1. Production
3Q22 | 2Q22 | 3Q21 | 3Q22 vs 3Q21 |
Hydrocarbon production | 9M22 | 9M21 | 9M22 vs 9M21 | |||||||
2,251 | 2,276 | 2,281 | -1% | EP (kboe/d) | 2,292 | 2,290 | - | |||||||
1,454 | 1,430 | 1,450 | - | Liquids (kb/d) | 1,450 | 1,435 | +1% | |||||||
4,300 | 4,602 | 4,543 | -5% | Gas (Mcf/d) | 4,569 | 4,672 | -2% |
2. Results
3Q22 | 2Q22 | 3Q21 | 3Q22 vs 3Q21 |
in millions of dollars, except effective tax rate | 9M22 | 9M21 | 9M22 vs 9M21 | |||||||
2,670 | 2,521 | 1,921 | +39% | External Sales | 7,342 | 5,178 | +42% | |||||||
8,492 | 8,454 | 4,395 | x1.9 | Operating income | 24,546 | 10,416 | x2.4 | |||||||
(2,643) | (3,668) | 139 | ns | Net income (loss) from equity affiliates and other items | (6,069) | (834) | x7,3 | |||||||
55.4% | 47.2% | 46.4% | - | Effective tax rate* | 49.9% | 42.5% | - | |||||||
(5,071) | (3,876) | (2,007) | x2.5 | Tax on net operating income | (12,810) | (4,382) | x2.9 | |||||||
778 | 910 | 2,527 | -69% | Net operating income | 5,667 | 5,200 | +9% | |||||||
3,439 | 3,809 | 199 | x17 | Adjustments affecting net operating income | 8,284 | 1,714 | x4.8 | |||||||
4,217 | 4,719 | 2,726 | +55% | Adjusted net operating income** | 13,951 | 6,914 | x2 | |||||||
377 | 287 | 315 | +20% | including income from equity affiliates | 1,019 | 864 | +18% | |||||||
1,989 | 1,873 | 1,656 | +20% | Organic investments | 5,288 | 4,494 | +18% | |||||||
(126) | 2,225 | (34) | ns | Net acquisitions | 2,415 | (5) | ns | |||||||
1,863 | 4,098 | 1,622 | +15% | Net investments | 7,703 | 4,489 | +72% |
*Effective tax rate = tax on adjusted net operating income / (adjusted net operating income - income from equity affiliates - dividends received from investments - impairment of goodwill + tax on adjusted net operating income).
**Detail of adjustment items shown in the business segment information starting on page 34 of this exhibit.
The Exploration & Production segment’s adjusted net operating income was:
· | $4,217 million in the third quarter 2022, up 55% year-on-year, due to the sharp rise in oil and gas prices, |
· | $13,951 million for the first nine months of 2022, double the same period last year for the same reasons. |
Compared to the second quarter 2022, adjusted net operating income decreased by $502 million in the third quarter 2022 mainly due to the impact of Energy Profits Levy in the United Kingdom for $0.6 billion.
Adjusted net operating income for the Exploration & Production segment excludes special items. The exclusion of special items had:
· | a positive impact of $3,439 million in the third quarter 2022 on the segment’s adjusted net operating income, compared to a positive impact of $199 million in the third quarter 2021, |
· | a positive impact of $8,284 million in the first nine months 2022 on the segment’s adjusted net operating income, compared to a positive impact of $1,714 million in the first nine months 2021. |
In each case the increase in the impact of special items resulted primarily from provisions relating to Russian activities.
The segment’s operating cash flow before working capital changes without financial charges (DACF)2 was:
· | $6,406 million in the third quarter 2022 an increase of 30% compared to $4,943 million in the third quarter 2021, |
· | $21,092 million in the first nine months of 2022, an increase of 62% compared to $13,029 million in the first nine months of 2021, due to the increase in oil and gas prices. |
Compared to the second quarter 2022, operating cash flow before working capital changes without financial charges (DACF)2 decreased by $977 million in the third quarter 2022 mainly due to the impact of the Energy Profits Levy in the United Kingdom for $0.6 billion.
The segment’s cash flow from operations excluding financial charges, except those related to leases was:
· | $9,083 million for the third quarter 2022, an increase of 89% compared to $4,814 million for the third quarter 2021. |
· | $23,619 million in the first nine months of 2022, an increase of 76% compared to $13,385 million in the first nine months of 2021. |
2 DACF= debt adjusted cash flow. Operating cash flow before working capital changes without financial charges of the segment is defined as cash flow from operating activities before changes in working capital at replacement cost, without financial charges except those related to leases. For information on the replacement cost method, refer to “B. Analysis of Business Segment Results”, above.
7
B.3. Downstream (Refining & Chemicals and Marketing & Services segments)
Results
3Q22 | 2Q22 | 3Q21 | 3Q22 vs 3Q21 |
in millions of dollars | 9M22 | 9M21 | 9M22 vs 9M21 | |||||||
54,867 | 61,968 | 44,319 | +24% | External sales | 170,992 | 121,253 | +41% | |||||||
1,769 | 4,958 | 1,682 | +5% | Operating income | 9,724 | 4,770 | x2.0 | |||||||
205 | 447 | 81 | x2.5 | Net income (loss) from equity affiliates and other items | 766 | 315 | x2.4 | |||||||
(408) | (1,162) | (495) | ns | Tax on net operating income | (2,320) | (1,408) | +65% | |||||||
1,566 | 4,243 | 1,268 | +24% | Net operating income | 8,170 | 3,677 | x2.2 | |||||||
847 | (1,017) | (228) | ns | Adjustments affecting net operating income | (1,139) | (1,182) | ns | |||||||
2,413 | 3,226 | 1,040 | x2.3 | Adjusted net operating income* | 7,031 | 2,495 | x2.8 | |||||||
453 | 586 | 506 | -10% | Organic investments | 1,332 | 1,309 | +2% | |||||||
(6) | (91) | 17 | ns | Net acquisitions | (131) | (87) | ns | |||||||
447 | 495 | 523 | -15% | Net investments | 1,201 | 1,222 | -2% |
* Detail of adjustment items shown in the business segment information starting on page 34 of this exhibit.
The Downstream segment’s operating cash flow before working capital changes without financial charges (DACF)3 was:
· | $2,944 million in the third quarter 2022, an increase of 83% compared to $1,611 million in the third quarter 2021, |
· | $8,388 million in the first nine months of 2022, 2.1 times higher than $3,943 million in the first nine months of 2021. |
The Downstream segment’s cash flow from operations excluding financial charges, except those related to leases was:
· | $4,737 million for the third quarter 2022, 2.9 times higher than $1,644 million in the third quarter 2021, |
$10,848 million in the first nine months of 2022, an increase of 82% compared to $5,974 million in the first nine months of 2021.
B.4. Refining & Chemicals segment
1. Refinery and petrochemicals throughput and utilization rates
3Q22 | 2Q22 | 3Q21 | 3Q22 vs 3Q21 |
Refinery throughput and utilization rate* | 9M22 | 9M21 | 9M22 vs 9M21 | |||||||
1,599 | 1,575 | 1,225 | +31% | Total refinery throughput (kb/d) | 1,497 | 1,147 | +31% | |||||||
431 | 395 | 274 | +57% | France | 359 | 179 | x2 | |||||||
656 | 648 | 505 | +30% | Rest of Europe | 637 | 553 | +15% | |||||||
512 | 532 | 446 | +15% | Rest of world | 501 | 415 | +21% | |||||||
88% | 88% | 69% | Utilization rate based on crude only** | 84% | 62% |
* Includes refineries in Africa reported in the Marketing & Services segment.
** Based on distillation capacity at the beginning of the year, excluding Grandpuits (shut down first quarter 2021) from 2021 and Lindsey refinery (divested) from second quarter 2021.
3Q22 | 2Q22 | 3Q21 | 3Q22 vs 3Q21 |
Petrochemicals production and utilization rate |
9M22 | 9M21 | 9M22 vs 9M21 | |||||||
1,299 | 1,206 | 1,486 | -13% | Monomers* (kt) | 3,910 | 4,315 | -9% | |||||||
1,171 | 1,187 | 1,330 | -12% | Polymers (kt) | 3,632 | 3,707 | -2% | |||||||
80% | 71% | 93% | Steam cracker utilization rate** | 79% | 89% |
* Olefins
** Based on olefins production from steam crackers and their treatment capacity at the start of the year.
Refinery throughput:
· | Increased by 31% year-on-year in the third quarter 2022, due to the recovery in demand, particularly in Europe and the United States, the restart of the Donges refinery in France in the second quarter 2022 and the Leuna refinery in Germany, which had a major scheduled turnaround in 2021 |
· | Increased by 31% year-on-year for the first nine months, for the same reasons as well as the restart, in 2021, of the distillation unit at the Normandy refinery in France. |
Monomer production was down 13% in the third quarter 2022, mainly due to lower demand in Asia and unplanned shutdowns at Normandy in France and Antwerp in Belgium.
3 DACF= debt adjusted cash flow. Operating cash flow before working capital changes without financial charges of the segment is defined as cash flow from operating activities before changes in working capital at replacement cost, without financial charges except those related to leases. For information on the replacement cost method, refer to “B. Analysis of Business Segment Results”, above.
8
2. Results
3Q22 | 2Q22 | 3Q21 | 3Q22 vs 3Q21 |
in millions of dollars | 9M22 | 9M21 | 9M22 vs 9M21 | |||||||
28,899 | 35,061 | 22,765 | +27% | External sales | 94,968 | 62,819 | +51% | |||||||
1,296 | 4,029 | 1,006 | +29% | Operating income | 7,627 | 2,954 | x2.6 | |||||||
219 | 349 | 79 | x2.8 | Net income (loss) from equity affiliates and other items | 724 | 290 | x2.5 | |||||||
(255) | (866) | (273) | ns | Tax on net operating income | (1,646) | (834) | x2 | |||||||
1,260 | 3,512 | 812 | x1.6 | Net operating income | 6,705 | 2,410 | x2.8 | |||||||
675 | (752) | (210) | ns | Adjustments affecting net operating income | (890) | (1,054) | ns | |||||||
1,935 | 2,760 | 602 | x3.2 | Adjusted net operating income* | 5,815 | 1,356 | x4.3 | |||||||
224 | 313 | 321 | -30% | Organic investments | 735 | 822 | -11% | |||||||
1 | (34) | (6) | ns | Net acquisitions | (33) | (61) | ns | |||||||
225 | 279 | 315 | -29% | Net investments | 702 | 761 | -8% |
* Detail of adjustment items shown in the business segment information starting on page 34 of this exhibit.
Adjusted net operating income for the Refining & Chemicals segment was:
· | $1,935 million in the third quarter 2022, compared to $602 million in the third quarter 2021, due to high distillate margins in the context of reduced imports of Russian petroleum products, as well as the performance of crude oil and petroleum products trading activities, |
· | $5,815 million over the first nine months of 2022, 4.3 times the same period last year, due to high refining margins in Europe and the United States and better utilization rates, as a result of the restart of the Donges refinery in France in the second quarter 2022 as well as the Leuna refinery in Germany which had a major scheduled turnaround in 2021. |
Compared to the second quarter 2022, adjusted net operating income decreased by $825 million in the third quarter 2022 due to lower gasoline margins in Europe and the United States.
Adjusted net operating income for the Refining & Chemicals segment excludes any after-tax inventory valuation effect and special items. The exclusion of the inventory valuation effect had:
· | a positive impact of $675 million in the third quarter 2022 on the segment’s adjusted net operating income, compared to a negative impact of $285 million in the third quarter 2021, |
· | a negative impact of $922 million in the first nine months 2022 on the segment’s adjusted net operating income, compared to a negative impact of $1,222 million in the first nine months 2021. |
The exclusion of special items had:
· | a nil impact in the third quarter 2022 on the segment’s adjusted net operating income, compared to a positive impact of $75 million in the third quarter 2021, |
· | a positive impact of $32 million in the first nine months 2022 on the segment’s adjusted net operating income, compared to a positive impact of $168 million in the first nine months 2021. |
The segment’s operating cash flow before working capital changes without financial charges (DACF)4 was:
· | $2,164 million in the third quarter 2022, 2.3 times higher than in the third quarter 2021, |
· | $6,560 million in the first nine months of 2022, 3.2 times higher than the first nine months of 2021. |
Compared to the second quarter 2022, operating cash flow before working capital changes without financial charges (DACF)2 decreased by $799 million in the third quarter 2022 due to lower gasoline margins in Europe and the United States.
The segment’s cash flow from operations excluding financial charges, except those related to leases was:
· | $3,798 million for the third quarter 2022, 4.8 times higher than the third quarter 2021, |
· | $8,431 million in the first nine months of 2022, 2.1 higher than the first nine months of 2021. |
4 DACF= debt adjusted cash flow. Operating cash flow before working capital changes without financial charges of the segment is defined as cash flow from operating activities before changes in working capital at replacement cost, without financial charges except those related to leases. For information on the replacement cost method, refer to “B. Analysis of Business Segment Results”, above.
9
B.5. Marketing & Services segment
1. Petroleum product sales
3Q22 | 2Q22 | 3Q21 | 3Q22 vs 3Q21 |
Sales in kb/d* | 9M22 | 9M21 | 9M22 vs 9M21 | |||||||
1,495 | 1,477 | 1,542 | -3% | Total Marketing & Services sales | 1,475 | 1,486 | -1% | |||||||
873 | 817 | 867 | +1% | Europe | 827 | 811 | +2% | |||||||
622 | 660 | 675 | -8% | Rest of world | 648 | 675 | -4% |
* Excludes trading and bulk refining sales.
Sales of petroleum products were down 3% year-on-year in the third quarter 2022, reflecting lower demand due to higher prices of petroleum products, particularly in Africa.
Sales were stable for the first nine months of 2022 compared to a year ago, as the recovery of aviation and network activities worldwide offset the decline in sales to professional and industrial customers, particularly in Europe.
2. Results
3Q22 | 2Q22 | 3Q21 | 3Q22 vs 3Q21 |
in millions of dollars | 9M22 | 9M21 | 9M22 vs 9M21 | |||||||
25,968 | 26,907 | 21,554 | +20% | External sales | 76,024 | 58,434 | +30% | |||||||
473 | 929 | 676 | -30% | Operating income | 2,097 | 1,816 | +15% | |||||||
(14) | 98 | 2 | ns | Net income (loss) from equity affiliates and other items | 42 | 25 | +68% | |||||||
(153) | (296) | (222) | -31% | Tax on net operating income | (674) | (574) | +17% | |||||||
306 | 731 | 456 | -33% | Net operating income | 1,465 | 1,267 | +16% | |||||||
172 | (265) | (18) | ns | Adjustments affecting net operating income | (249) | (128) | ns | |||||||
478 | 466 | 438 | +9% | Adjusted net operating income* | 1,216 | 1,139 | +7% | |||||||
229 | 273 | 185 | +24% | Organic investments | 597 | 487 | +23% | |||||||
(7) | (57) | 23 | ns | Net acquisitions | (98) | (26) | ns | |||||||
222 | 216 | 208 | +7% | Net investments | 499 | 461 | +8% |
* Detail of adjustment items shown in the business segment information starting on page 34 of this exhibit.
Adjusted net operating income for the Marketing & Services segment was:
· | $478 million in the third quarter 2022, up 9% year-on-year, mainly due to the recovery of the network and aviation activities |
· | $1,216 million in the first nine months of 2022, up 7% year-on-year, for the same reasons. |
Adjusted net operating income for the Marketing & Services segment excludes any after-tax inventory valuation effect and special items. The exclusion of the inventory valuation effect had:
· | a positive impact of $172 million in the third quarter 2022 on the segment’s adjusted net operating income, compared to a negative impact of $41 million in the third quarter 2021, |
· | a negative impact of $331 million in the first nine months 2022 on the segment’s adjusted net operating income, compared to a negative impact of $189 million in the first nine months 2021. |
The exclusion of special items had:
· | a nil impact in the third quarter 2022 on the segment’s adjusted net operating income, compared to a positive impact of $23 million in the third quarter 2021, |
· | a positive impact of $82 million in the first nine months 2022 on the segment’s adjusted net operating income, compared to a positive impact of $61 million in the first nine months 2021. |
The segment’s operating cash flow before working capital changes without financial charges (DACF)5 was:
· | $780 million in the third quarter 2022, an increase of 15% compared to $677 million in the third quarter 2021, |
· | $1,828 million in the first nine months of 2022, a decrease of -2% compared to $1,862 million in the first nine months of 2021. |
The segment’s cash flow from operations excluding financial charges, except those related to leases was:
· | $939 million for the third quarter 2022, an increase of 11% compared to $845 million a year earlier, |
· | $2,417 million in the first nine months of 2022, an increase of 24% compared to $1,947 million in the first nine months of 2021. |
5 DACF= debt adjusted cash flow. Operating cash flow before working capital changes without financial charges of the segment is defined as cash flow from operating activities before changes in working capital at replacement cost, without financial charges except those related to leases. For information on the replacement cost method, refer to “B. Analysis of Business Segment Results”, above.
10
C. TOTALENERGIES RESULTS
1. Net income (TotalEnergies share)
Net income (TotalEnergies share) was:
· | $6,626 million in the third quarter 2022, an increase of 43% compared to $4,645 million in the third quarter 2021. |
· | $17,262 million in the first nine months of 2022, an increase of 69% compared to $10,195 million in the first nine months of 2021. |
Adjusted net income (TotalEnergies share) was:
· | $9,863 million in the third quarter 2022 compared to $4,769 million in the third quarter 2021, due to higher oil and gas prices, refining margins and the good performance of trading activities. |
Adjusted net income excludes the after-tax inventory effect, special items and the impact of changes in fair value3.
Total adjustments affecting net income4 were $(3,237) million in the third quarter 2022, notably due to a new impairment of $(3.1) billion related to Russian activities and to an inventory effect of $(0.8) billion, partially offset by the capital gain on the partial sale of SunPower shares and the impact of revaluing the shares held and consolidated under the equity method for $1.4 billion.
2. Fully-diluted shares and share buybacks
The number of fully-diluted shares was 2,543 million on September 30, 2022.
As part of its shareholder return policy, as announced in July 2022, TotalEnergies repurchased 38.9 million shares for cancellation in the third quarter of 2022 for $2 billion. Share buybacks amounted to $5 billion in the first nine month of 2022.
3. Acquisitions - Asset sales
Acquisitions were:
· | $1,716 million in the third quarter 2022, mainly related to the acquisition of 50% of Clearway Energy Group for $1,619 million, |
· | $5,580 million over the first nine months of 2022 including the above item as well as payments related to the award of the Atapu and Sepia Production Sharing Contracts and the bonus related to the New York Bight offshore wind concession in the United States. |
Asset sales were:
· | $129 million in the third quarter 2022, mainly for the sale of the 18% interest in the Sarsang field in Iraq, |
· | $995 million over the first nine months of 2022, including the above item as well as the partial sale of the Landivisiau power generation plant in France, the sale by SunPower of its Enphase shares and a payment related to the sale of interests in the CA1 offshore block in Brunei. |
4. Cash flow
TotalEnergies’ cash flow from operating activities was:
· | $17,848 million in the third quarter 2022, 3.2 times greater than $5,640 million in the third quarter 2021, and |
· | $41,749 million in the first nine months of 2022, 2.2 times greater than $18,789 million in the first nine months of 2021. |
The change in working capital as determined using the replacement cost method excluding the mark-to-market effect of iGRP’s contracts, including capital gain from renewable project sales (effective first quarter 2020) and including organic loan repayment from equity affiliates was a decrease of $6,112 million in the third quarter 2022, compared to an increase of $2,420 million in the third quarter 2021. In the third quarter 2022, the change in working capital was a decrease of $7,407 million in accordance with IFRS. The difference of $1,295 million between IFRS and replacement cost method corresponds to the following adjustments: (i) the pre-tax inventory valuation effect of $1,010 million, (ii) less the mark-to-market effect of iGRP’s contracts of $285 million, (iii) less the capital gains from renewables project sale of $0 million and (iv) plus the organic loan repayments from equity affiliates of $570 million.
3 See “Analysis of business segment results” on page 4 and “Adjustment Items To Net Income (TotalEnergies Share)” on page 18 for further details.
4 Details shown on pages 18 and the notes to the consolidated financial statements for the third quarter 2022.
11
The change in working capital as determined using the replacement cost method excluding the mark-to-market effect of iGRP’s contracts, including capital gain from renewable project sales (effective first quarter 2020) and including organic loan repayment from equity affiliates was a decrease of $5,154 million in the first nine months 2022, compared to an increase of $989 million in the first nine months 2021. In the first nine months 2022, the change in working capital was a decrease of $4,982 million in accordance with IFRS. The difference of $172 million between IFRS and replacement cost method corresponds to the following adjustments: (i) the pre-tax inventory valuation effect of $1,396 million, (ii) plus the mark-to-market effect of iGRP’s contracts of $96 million, (iii) less the capital gains from renewables project sale of $25 million and (iv) less the organic loan repayments from equity affiliates of $1 295 million.
Operating cash flow before working capital changes5 was $11,736 million in the third quarter 2022, an increase of 46% compared to $8,060 million in the third quarter 2021 and $36,595 million in the first nine months of 2022, an increase of 85% compared to $19,778 million in the first nine months of 2021.
Operating cash flow before working capital changes without financial charges (DACF)6 was $12,040 million in the third quarter 2022, an increase of 44% compared to $8,390 million in the third quarter 2021 and $37,665 million in the first nine months of 2022, an increase of 80% compared to $20,901 million in the first nine months of 2021.
The cash flow from operating activities was $17,848 million in the third quarter, compared to cash flow of $11,736 million, reflecting the positive impact of a $6.7 billion decrease in working capital requirement, mainly due to (a) price effect on inventories related to the decrease in oil and petroleum products average prices; (b) increase in tax liabilities related to rising gas prices and the Energy Profits Levy in the United Kingdom; (c) reduction in margin calls; and (d) seasonality of the gas and electricity supply activity.
TotalEnergies’ net cash flow7 was:
· | $7,033 million in the third quarter 2022 compared to $6,205 million a year earlier, reflecting the $3.7 billion increase in operating cash flow before working capital changes and the $2.8 billion increase in net investments to $4,703 million in the third quarter 2022, |
· | $24,094 million in the first nine months of 2022 compared to $10,756 million a year earlier, reflecting the $16.8 billion increase in operating cash flow before working capital changes and the $3.5 billion increase in net investments to $12,501 million in the first nine months of 2022. |
D. PROFITABILITY
Return on equity was 31.4% for the twelve months ended September 30, 2022.
10/01/2021- | 07/01/2021- | 10/01/2020- | ||||
in millions of dollars | 09/30/2022 | 06/30/2022 | 09/30/2021 | |||
Adjusted net income | 35,790 | 30,716 | 12,827 | |||
Average adjusted shareholders' equity | 113,861 | 113,333 | 106,794 | |||
Return on equity (ROE) | 31.4% | 27.1% | 12.0% |
Return on average capital employed was 27.2% for the twelve months ended September 30, 2022.
10/01/2021- | 07/01/2021- | 10/01/2020- | ||||
in millions of dollars | 09/30/2022 | 06/30/2022 | 09/30/2021 | |||
Adjusted net operating income | 37,239 | 32,177 | 14,237 | |||
Average capital employed | 136,902 | 139,377 | 142,180 | |||
ROACE | 27.2% | 23.1% | 10.0% |
5 Operating cash flow before working capital changes is defined as cash flow from operating activities before changes in working capital at replacement cost, excluding the mark-to-market effect of iGRP’s contracts and including capital gain from renewable projects sales. For information on the replacement cost method, refer to “B. Analysis of Business Segment Results”, above. The reconciliation table for different cash flow figures is set forth under “Cash Flow” on page 19 of this exhibit.
6 DACF = debt adjusted cash flow, is defined as cash flow from operating activities before changes in working capital at replacement cost, without financial charges.
7 Net cash flow = operating cash flow before working capital changes - net investments (including other transactions with non-controlling interests).
12
E. 2022 SENSITIVITIES*
Estimated | ||||||
Estimated impact | impact on cash | |||||
on adjusted net | flow from | |||||
Change | operating income | operations | ||||
Dollar | +/- 0.1 $ per € | -/+ 0.1 B$ | ~0 B$ | |||
Average liquids price** | +/- 10$/b | +/- 2.7 B$ | +/- 3.2 B$ | |||
European gas price – NBP / TTF *** | +/- 2 $/Mbtu | +/- 0.5 B$ | +/- 0.5 B$ | |||
Variable cost margin, European refining (VCM) | +/- 10 $/t | +/- 0.4 B$ | +/- 0.5 B$ |
* Sensitivities are revised once per year upon publication of the previous year’s fourth quarter results. Sensitivities are estimates based on assumptions about TotalEnergies’ portfolio in 2022. Actual results could vary significantly from estimates based on the application of these sensitivities. The impact of the $-€ sensitivity on adjusted net operating income is essentially attributable to Refining & Chemicals. Sensitivity to European gas price has been exceptionally updated during this quarter (see ***). Please find the indicators detailed on page 21.
** In a 60 $/b Brent environment.
*** Updated sensitivity, including UK Energy Profits Levy.
Sensitivity +/- 0.4 B$ starting 3Q 2022, related to UK and Norway taxes
F. SUMMARY AND OUTLOOK
The markets for Oil and Gas are marked by strong volatility. Despite anticipated slower global growth in 2023, oil prices are supported notably by the OPEC+ decision to reduce production quotas by 2 Mb/d as well as by the implementation of the European ban on Russian oil effective December 5, 2022. Gas prices should also remain high, driven by the need to import LNG into Europe to replace Russian gas imports. In addition, refining margins, notably for distillates, should remain strong due to the ban on imports of Russian petroleum products into Europe effective February 2023.
TotalEnergies expects fourth quarter 2022 production to reach around 2.8 Mboe/d, due to a reduction in planned maintenance and the re-start of Kashagan production.
Given the evolution of oil and gas prices in recent months and the lag effect on price formulas, TotalEnergies anticipates that its average LNG selling price for the fourth quarter should be above $17/Mbtu.
Given the strong cash flow generation and a gearing ratio of 4%, the Company confirms its strategy of allocating 35-40% of cash flow to its shareholders through the cycles, while accelerating its transformation strategy with net investments of around $16 billion in 2022, including $4 billion in decarbonized energies.
13
FORWARD-LOOKING STATEMENTS
This document may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, notably with respect to the financial condition, results of operations, business activities and industrial strategy of TotalEnergies. This document may also contain statements regarding the perspectives, objectives, areas of improvement and goals of TotalEnergies, including with respect to climate change and carbon neutrality (net zero emissions). An ambition expresses an outcome desired by TotalEnergies, it being specified that the means to be deployed do not depend solely on TotalEnergies. 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 TotalEnergies 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, TotalEnergies 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, you should read the information set forth under “Item 3. -3.1 Risk Factors”, “Item 4. Information on the Company”, “Item 5. Operating and Financial Review and Prospects” and “Item 11. Quantitative and Qualitative Disclosures about Market Risk” in TotalEnergies’ Form 20-F for the year ended December 31, 2021.
14
RESULTS FROM RUSSIAN ASSETS
Russian Upstream Assets (M$) | 3Q22 | 2Q22 | 9M22 | |||
Net income (TotalEnergies share) | (1,907) | (3,202) | (8,113) | |||
Cash flow from operations | 349 | 368 | 748 |
Capital Employed by TotalEnergies in Russia as of September 30, 2022 was $6,110 million, after taking into account an impairment of $3.1 billion in the third quarter of 2022.
OPERATING INFORMATION BY SEGMENT
Company’s production (Exploration & Production + iGRP)
3Q22 | 2Q22 | 3Q21 | 3Q22 vs 3Q21 |
Combined liquids and gas |
9M22 | 9M21 | 9M22 vs 9M21 | |||||||
920 | 965 | 989 | -7% | Europe and Central Asia | 978 | 1,008 | -3% | |||||||
463 | 460 | 537 | -14% | Africa | 473 | 540 | -12% | |||||||
692 | 680 | 681 | +2% | Middle East and North Africa | 681 | 662 | +3% | |||||||
449 | 420 | 372 | +21% | Americas | 419 | 375 | +12% | |||||||
145 | 213 | 235 | -39% | Asia-Pacific | 199 | 223 | -11% | |||||||
2,669 | 2,738 | 2,814 | -5% | Total production | 2,750 | 2,808 | -2% | |||||||
656 | 690 | 711 | -8% | includes equity affiliates | 687 | 730 | +6% |
3Q22 | 2Q22 | 3Q21 | 3Q22 vs 3Q21 |
Liquids production by region (kb/d) | 9M22 | 9M21 | 9M22 vs 9M21 | |||||||
302 | 315 | 362 | -17% | Europe and Central Asia | 329 | 363 | -9% | |||||||
352 | 351 | 401 | -12% | Africa | 358 | 405 | -12% | |||||||
557 | 546 | 530 | +5% | Middle East and North Africa | 547 | 510 | +7% | |||||||
260 | 231 | 179 | +46% | Americas | 231 | 180 | +28% | |||||||
23 | 40 | 45 | -49% | Asia-Pacific | 36 | 38 | -7% | |||||||
1,494 | 1,483 | 1,517 | -2% | Total production | 1,501 | 1,496 | - | |||||||
202 | 201 | 205 | -2% | includes equity affiliates | 204 | 206 | -1% |
3Q22 | 2Q22 | 3Q21 | 3Q22 vs 3Q21 |
Gas production by region (Mcf/d) | 9M22 | 9M21 | 9M22 vs 9M21 | |||||||
3,322 | 3,492 | 3,366 | -1% | Europe and Central Asia | 3,482 | 3,470 | - | |||||||
559 | 545 | 689 | -19% | Africa | 582 | 687 | -15% | |||||||
740 | 742 | 838 | -12% | Middle East and North Africa | 736 | 842 | -13% | |||||||
1,061 | 1,063 | 1,086 | -2% | Americas | 1,055 | 1,094 | -4% | |||||||
685 | 993 | 1,091 | -37% | Asia-Pacific | 930 | 1,068 | -13% | |||||||
6,367 | 6,835 | 7,070 | -10% | Total production | 6,785 | 7,161 | -5% | |||||||
2,444 | 2,633 | 2,730 | -11% | includes equity affiliates | 2,596 | 2,826 | -8% |
15
Downstream (Refining & Chemicals and Marketing & Services)
3Q22 | 2Q22 | 3Q21 | 3Q22 vs 3Q21 |
Petroleum product sales by region (kb/d) | 9M22 | 9M21 | 9M22 vs 9M21 | |||||||
1,816 | 1,814 | 1,579 | +15% | Europe | 1,755 | 1,553 | +13% | |||||||
690 | 734 | 693 | - | Africa | 728 | 674 | +8% | |||||||
907 | 922 | 811 | +12% | Americas | 868 | 794 | +9% | |||||||
569 | 705 | 486 | +17% | Rest of world | 602 | 491 | +23% | |||||||
3,982 | 4,176 | 3,568 | +12% | Total consolidated sales | 3,953 | 3,512 | +13% | |||||||
438 | 409 | 360 | +22% | Includes bulk sales | 419 | 365 | +15% | |||||||
2,049 | 2,290 | 1,666 | +23% | Includes trading | 2,060 | 1,661 | +24% |
3Q22 | 2Q22 | 3Q21 | 3Q22 vs 3Q21 |
Petrochemicals production* (kt) | 9M22 | 9M21 | 9M22 vs 9M21 | |||||||
1,078 | 1,023 | 1,308 | -18% | Europe | 3,361 | 3,820 | -12% | |||||||
670 | 603 | 705 | -5% | Americas | 1,910 | 1,940 | -2% | |||||||
722 | 768 | 802 | -10% | Middle-East and Asia | 2,271 | 2,261 | - |
* Olefins, polymers
RENEWABLES
3Q22 | 2Q22 | |||||||||||||||||||
Onshore | Offshore | Onshore | Offshore | |||||||||||||||||
Installed power generation gross capacity (GW) (1),(2) (3) | Solar | Wind | Wind | Other | Total | Solar | Wind | Wind | Other | Total | ||||||||||
France | 0.7 | 0.6 | 0.0 | 0.1 | 1.4 | 0.7 | 0.5 | 0.0 | 0.1 | 1.3 | ||||||||||
Rest of Europe | 0.2 | 1.1 | 0.2 | 0.0 | 1.4 | 0.2 | 1.1 | 0.0 | 0.0 | 1.3 | ||||||||||
Africa | 0.1 | 0.0 | 0.0 | 0.0 | 0.1 | 0.1 | 0.0 | 0.0 | 0.0 | 0.1 | ||||||||||
Middle East | 0.7 | 0.0 | 0.0 | 0.0 | 0.7 | 0.7 | 0.0 | 0.0 | 0.0 | 0.7 | ||||||||||
North America | 2.9 | 2.1 | 0.0 | 0.0 | 5.0 | 1.1 | 0.0 | 0.0 | 0.0 | 1.1 | ||||||||||
South America | 0.4 | 0.3 | 0.0 | 0.0 | 0.7 | 0.4 | 0.3 | 0.0 | 0.0 | 0.7 | ||||||||||
India | 4.9 | 0.3 | 0.0 | 0.0 | 5.3 | 4.9 | 0.2 | 0.0 | 0.0 | 5.1 | ||||||||||
Asia-Pacific | 1.2 | 0.3 | 0.1 | 0.0 | 1.3 | 1.2 | 0.0 | 0.1 | 0.0 | 1.2 | ||||||||||
Total | 11.1 | 4.4 | 0.3 | 0.2 | 16.0 | 9.2 | 2.1 | 0.1 | 0.2 | 11.6 |
3Q22 | 2Q22 | |||||||||||||||||||
Onshore | Offshore | Onshore | Offshore | |||||||||||||||||
Power generation gross capacity from renewables in
construction (GW) (1),(2) (3) |
Solar | Wind | Wind | Other | Total | Solar | Wind | Wind | Other | Total | ||||||||||
France | 0.2 | 0.1 | 0.0 | 0.1 | 0.5 | 0.2 | 0.2 | 0.0 | 0.1 | 0.4 | ||||||||||
Rest of Europe | 0.1 | 0.0 | 1.0 | 0.0 | 1.1 | 0.0 | 0.0 | 1.1 | 0.0 | 1.1 | ||||||||||
Africa | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||||
Middle East | 0.4 | 0.0 | 0.0 | 0.0 | 0.4 | 0.4 | 0.0 | 0.0 | 0.0 | 0.4 | ||||||||||
North America | 1.6 | 0.0 | 0.0 | 0.2 | 1.7 | 1.3 | 0.0 | 0.0 | 0.0 | 1.3 | ||||||||||
South America | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||||
India | 0.8 | 0.2 | 0.0 | 0.0 | 1.0 | 0.9 | 0.3 | 0.0 | 0.0 | 1.2 | ||||||||||
Asia-Pacific | 0.1 | 0.0 | 0.5 | 0.0 | 0.7 | 0.1 | 0.0 | 0.6 | 0.0 | 0.7 | ||||||||||
Total | 3.3 | 0.3 | 1.5 | 0.2 | 5.4 | 2.8 | 0.5 | 1.7 | 0.1 | 5.2 |
16
3Q22 | 2Q22 | |||||||||||||||||||
Onshore | Offshore | Onshore | Offshore | |||||||||||||||||
Power generation
gross capacity from renewables in development (GW) (1),(2) (3) |
Solar | Wind | Wind | Other | Total | Solar | Wind | Wind | Other | Total | ||||||||||
France | 2.1 | 0.4 | 0.0 | 0.0 | 2.5 | 2.3 | 0.5 | 0.0 | 0.0 | 2.8 | ||||||||||
Rest of Europe | 4.8 | 0.3 | 4.4 | 0.1 | 9.6 | 4.8 | 0.3 | 4.4 | 0.1 | 9.5 | ||||||||||
Africa | 0.6 | 0.1 | 0.0 | 0.1 | 0.9 | 0.6 | 0.1 | 0.0 | 0.1 | 0.8 | ||||||||||
Middle East | 0.5 | 0.0 | 0.0 | 0.0 | 0.5 | 1.8 | 0.0 | 0.0 | 0.0 | 1.8 | ||||||||||
North America | 11.8 | 3.4 | 4.0 | 4.5 | 23.7 | 6.2 | 0.1 | 4.0 | 0.8 | 11.0 | ||||||||||
South America | 0.7 | 0.5 | 0.0 | 0.2 | 1.4 | 0.6 | 0.0 | 0.0 | 0.2 | 0.8 | ||||||||||
India | 3.9 | 0.1 | 0.0 | 0.0 | 4.0 | 3.9 | 0.1 | 0.0 | 0.0 | 4.0 | ||||||||||
Asia-Pacific | 2.0 | 0.3 | 1.2 | 0.3 | 3.7 | 1.7 | 0.2 | 1.2 | 0.1 | 3.2 | ||||||||||
Total | 26.5 | 5.1 | 9.6 | 5.3 | 46.4 | 21.7 | 1.3 | 9.6 | 1.3 | 33.9 |
1 Includes 20% of gross capacity of Adani Green Energy Ltd effective first quarter 2021.
2 Includes 50% of Clearway Energy Group’s gross capacity effective third quarter 2022.
3 End-of-period data.
In operation | In construction | In development | ||||||||||||||||||||||||||||
Gross renewables capacity covered by PPA |
Onshore | Offshore | Onshore | Offshore | Onshore | Offshore | ||||||||||||||||||||||||
at 09/30/2022 (GW) | Solar | Wind | Wind | Other | Total | Solar | Wind | Wind | Other | Total | Solar | Wind | Wind | Other | Total | |||||||||||||||
Europe | 0.9 | 1.6 | X | X | 2.8 | 0.3 | X | 0.7 | X | 1.2 | 4.1 | 0.3 | — | X | 4.5 | |||||||||||||||
Asia | 6.1 | 0.4 | X | X | 6.6 | 0.9 | 0.2 | 0.5 | — | 1.7 | 4.5 | X | — | X | 4.7 | |||||||||||||||
North America | 2.8 | 2.1 | — | X | 5.0 | 1.6 | — | — | X | 1.7 | 1.5 | X | — | 0.8 | 2.5 | |||||||||||||||
Rest of World | 1.2 | 0.3 | — | X | 1.5 | 0.4 | — | — | X | 0.5 | 0.9 | — | — | 0.3 | 1.3 | |||||||||||||||
Total | 11.0 | 4.4 | 0.2 | X | 15.9 | 3.3 | 0.3 | 1.3 | 0.2 | 5.1 | 11.1 | 0.6 | — | 1.2 | 13.0 |
X not specified, capacity < 0.2 GW.
In operation | In construction | In development | ||||||||||||||||||||||||||||
PPA average price at 09/30/2022 |
Onshore | Offshore | Onshore | Offshore | Onshore | Offshore | ||||||||||||||||||||||||
($/MWh) | Solar | Wind | Wind | Other | Total | Solar | Wind | Wind | Other | Total | Solar | Wind | Wind | Other | Total | |||||||||||||||
Europe | 198 | 114 | X | X | 139 | 67 | X | 73 | X | 74 | 75 | 85 | — | X | 80 | |||||||||||||||
Asia | 70 | 52 | X | X | 72 | 55 | 45 | 254 | — | 117 | 39 | X | — | X | 39 | |||||||||||||||
North America | 106 | 54 | — | X | 83 | 28 | — | — | X | 28 | 31 | X | — | - | 43 | |||||||||||||||
Rest of World | 90 | 54 | — | X | 82 | 19 | — | — | X | 19 | 77 | — | — | — | 77 | |||||||||||||||
Total | 91 | 77 | 127 | X | 88 | 38 | 64 | 150 | 95 | 69 | 42 | 80 | — | 145 | 46 |
X not specified, PPA relating to a capacity < 0.2 GW.
ADJUSTMENT ITEMS TO NET INCOME (TOTALENERGIES SHARE)
3Q22 | 2Q22 | 3Q21 | in millions of dollars | 9M22 | 9M21 | |||||
(2,186) | (4,546) | (325) | Special items affecting net income (TotalEnergies share) | (11,725) | (2,255) | |||||
1,391 | - | (177) | Gain (loss) on asset sales | 1,391 | (1,556) | |||||
(17) | (8) | (43) | Restructuring charges | (28) | (314) | |||||
(3,118) | (3,719) | (47) | Impairments | (11,898) | (240) | |||||
(442) | (819) | (58) | Other | (1,190) | (145) | |||||
(827) | 993 | 320 | After-tax inventory effect: FIFO vs. replacement cost | 1,206 | 1,384 | |||||
(224) | (551) | (119) | Effect of changes in fair value | (855) | (169) | |||||
(3,237) | (4,104) | (124) | Total adjustments affecting net income | (11,374) | (1,040) |
17
RECONCILIATION OF NET INCOME (TOTALENERGIES SHARE) TO ADJUSTED EBITDA
3Q22 | 2Q22 | 3Q21 | 3Q22 vs 3Q21 |
in millions of dollars | 9M22 | 9M21 | 9M22 vs 9M21 | |
6,626 | 5,692 | 4,645 | +43% | Net income - TotalEnergies share | 17,262 | 10,195 | +69% | |
3,237 | 4,104 | 124 | x26.1 | Less: adjustment items to net income (TotalEnergies share) | 11,374 | 1,040 | x10.9 | |
9,863 | 9,796 | 4,769 | x2.1 | Adjusted net income - TotalEnergies share | 28,636 | 11,235 | x2.5 | |
- | - | - | Adjusted items | - | - | |||
85 | 89 | 105 | -19% | Add: non-controlling interests | 250 | 252 | -1% | |
6,037 | 5,274 | 2,674 | x2.3 | Add: income taxes | 16,035 | 5,605 | x2.9 | |
2,926 | 3,038 | 3,172 | -8% | Add: depreciation, depletion and impairment of tangible assets and mineral interests | 9,112 | 9,457 | -4% | |
95 | 98 | 85 | +12% | Add: amortization and impairment of intangible assets | 289 | 282 | +2% | |
633 | 572 | 454 | +39% | Add: financial interest on debt | 1,667 | 1,421 | +17% | |
(219) | (130) | (79) | ns | Less: financial income and expense from cash & cash equivalents | (408) | (235) | ns | |
19,420 | 18,737 | 11,180 | +74% | Adjusted EBITDA | 55,581 | 28,017 | +98% |
INVESTMENTS – DIVESTMENTS
3Q22 | 2Q22 | 3Q21 | 3Q22 vs 3Q21 |
in millions of dollars | 9M22 | 9M21 | 9M22 vs 9M21 | |||||||
3,116 | 2,819 | 2,813 | +11% | Organic investments (a) | 7,916 | 7,993 | -1% | |||||||
169 | 98 | 172 | -1% | Capitalized exploration | 381 | 660 | -42% | |||||||
233 | 277 | 211 | +10% | Increase in non-current loans | 744 | 883 | -16% | |||||||
(214) | (174) | (112) | - | Repayment of non-current loans, excluding organic loan repayment from equity affiliates | (823) | (297) | - | |||||||
4 | (190) | 1 | - | Change in debt from renewable projects (TotalEnergies share) | (186) | (170) | - | |||||||
1,716 | 2,464 | 126 | x13.6 | Acquisitions (b) | 5,580 | 2,996 | +86% | |||||||
129 | 388 | 1,084 | -88% | Asset sales (c) | 995 | 1,967 | -49% | |||||||
(4) | 176 | (5) | - | Change in debt from renewable projects (partner share) | 170 | 100 | +70% | |||||||
1,587 | 2,076 | (958) | - | Net acquisitions | 4,585 | 1,029 | x4.5 | |||||||
4,703 | 4,895 | 1,855 | x2.5 | Net investments (a + b - c) | 12,501 | 9,022 | +39% | |||||||
- | - | 757 | - | Other transactions with non-controlling interests (d) | - | 757 | - | |||||||
(570) | (238) | (120) | - | Organic loan repayment from equity affiliates (e) | (1,295) | (228) | - | |||||||
(8) | 366 | (6) | - | Change in debt from renewable projects financing* (f) | 356 | 270 | +32% | |||||||
43 | 37 | 30 | +43% | Capex linked to capitalized leasing contracts (g) | 116 | 77 | +51% | |||||||
7 | 4 | - | - | Expenditures related to carbon credits ( h ) | 11 | - | - | |||||||
4,075 | 4,982 | 2,456 | +66% | Cash flow used in investing activities (a + b - c + d + e + f - g - h) |
11,435 | 9,744 | +17% |
* Change in debt from renewable projects (TotalEnergies share and partner share).
18
CASH FLOW
3Q22 | 2Q22 | 3Q21 | 3Q22 vs 3Q21 |
in millions of dollars | 9M22 | 9M21 | 9M22 vs 9M21 | |||||||
12,040 | 13,631 | 8,390 | +44% | Operating cash flow before working capital changes w/o financial charges (DACF) | 37,665 | 20,901 | +80% | |||||||
(304) | (399) | (330) | - | Financial charges | (1,071) | (1,122) | - | |||||||
11,736 | 13,233 | 8,060 | +46% | Operating cash flow before working capital changes (a)* | 36,595 | 19,778 | +85% | |||||||
7,692 | 2,161 | (2,662) | - | (Increase) decrease in working capital** | 5,078 | (2,403) | - | |||||||
(1,010) | 1,151 | 365 | - | Inventory effect | 1,396 | 1,711 | -18% | |||||||
0 | (23) | (3) | - | Capital gain from renewable projects sales | (25) | (69) | - | |||||||
(570) | (238) | (120) | - | Organic loan repayment from equity affiliates | (1,295) | (228) | - | |||||||
17,848 | 16,284 | 5,640 | x3.2 | Cash flow from operations | 41,749 | 18,789 | x2.2 | |||||||
3,116 | 2,819 | 2,813 | +11% | Organic investments (b) | 7,916 | 7,993 | -1% | |||||||
8,620 | 10,414 | 5,247 | +64% | Free cash flow after organic investments, w/o net asset sales (a - b) | 28,679 | 11,785 | x2.4 | |||||||
4,703 | 4,895 | 1,855 | x2.5 | Net investments (c) | 12,501 | 9,022 | +39% | |||||||
7,033 | 8,338 | 6,205 | +13% | Net cash flow (a - c) | 24,094 | 10,756 | x2.2 |
* Operating cash flow before working capital changes, is defined as cash flow from operating activities before changes in working capital at replacement cost, excluding the mark-to-market effect of iGRP’s contracts and including capital gain from renewable projects sale. Historical data have been restated to cancel the impact of fair valuation of iGRP sector’s contracts.
** Changes in working capital are presented excluding the mark-to-market effect of iGRP’s contracts.
GEARING RATIO
In millions of dollars | 09/30/2022 | 06/30/2022 | 09/30/2021 | |||
Current borrowings1 | 15,556 | 14,589 | 15,184 | |||
Other current financial liabilities | 861 | 401 | 504 | |||
Current financial assets1,2 | (11,532) | (7,697) | (3,821) | |||
Net financial assets classified as held for sale | (36) | (14) | (1) | |||
Non-current financial debt1 | 37,506 | 39,233 | 43,350 | |||
Non-current financial assets1 | (1,406) | (692) | (1,927) | |||
Cash and cash equivalents | (35,941) | (32,848) | (28,971) | |||
Net debt (a) | 5,008 | 12,972 | 24,318 | |||
Shareholders’ equity – TotalEnergies share | 117,821 | 116,688 | 110,016 | |||
Non-controlling interests | 2,851 | 3,309 | 3,211 | |||
Shareholders’ equity (b) | 120,672 | 119,997 | 113,227 | |||
Net-debt-to-capital ratio = a / (a+b) | 4.0% | 9.8% | 17.7% | |||
Leases (c) | 7,669 | 7,963 | 7,786 | |||
Net-debt-to-capital ratio including leases (a+c) / (a+b+c) | 9.5% | 14.9% | 22.1% |
1 Excludes leases receivables and leases debts.
2 Including initial margins held as part of the Company's activities on organized markets.
19
RETURN ON AVERAGE CAPITAL EMPLOYED
Twelve months ended September 30, 2022
Integrated Gas, | ||||||||
Renewables & | Exploration & | Refining & | Marketing | |||||
in millions of dollars | Power | Production | Chemicals | & Services | ||||
Adjusted net operating income | 12,014 | 17,476 | 6,368 | 1,695 | ||||
Capital employed at 9/30/2021* | 52,401 | 75,499 | 9,156 | 8,281 | ||||
Capital employed at 9/30/2022* | 54,923 | 65,041 | 5,801 | 7,141 | ||||
ROACE | 22.4% | 24.9% | 85.2% | 22.2% |
Twelve months ended June 30, 2022
Integrated Gas, | ||||||||
Renewables & | Exploration & | Refining & | Marketing | |||||
in millions of dollars | Power | Production | Chemicals | & Services | ||||
Adjusted net operating income | 9,973 | 15,985 | 5,035 | 1,655 | ||||
Capital employed at 6/30/2021* | 49,831 | 76,013 | 9,285 | 8,439 | ||||
Capital employed at 6/30/2022* | 54,174 | 70,248 | 7,958 | 7,475 | ||||
ROACE | 19.2% | 21.9% | 58.4% | 20.8% |
Twelve months ended September 30, 2021
Integrated Gas, | ||||||||
Renewables & | Exploration & | Refining & | Marketing & | |||||
in millions of dollars | Power | Production | Chemicals | Services | ||||
Adjusted net operating income | 3,738 | 7,982 | 1,526 | 1,471 | ||||
Capital employed at 9/30/2020* | 43,799 | 78,548 | 11,951 | 8,211 | ||||
Capital employed at 9/30/2021* | 52,401 | 75,499 | 9,156 | 8,281 | ||||
ROACE | 7.8% | 10.4% | 14.5% | 17.8% |
* At replacement cost (excluding after-tax inventory effect).
20
MAIN INDICATORS
3Q22 | 2Q22 | 1Q22 | 4Q21 | 3Q21 | ||||||||
€/$ | 1.01 | 1.06 | 1.12 | 1.14 | 1.18 | |||||||
Brent | ($/b) | 100.8 | 113.9 | 102.2 | 79.8 | 73.5 | ||||||
Average liquids price* | ($/b) | 93.6 | 102.9 | 90.1 | 72.6 | 67.1 | ||||||
Average gas price* (1) | ($/Mbtu) | 16.83 | 11.01 | 12.27 | 11.38 | 6.33 | ||||||
Average LNG price** (1) | ($/Mbtu) | 21.51 | 13.96 | 13.60 | 13.12 | 9.10 | ||||||
Variable Cost Margin, European refining*** | ($/t) | 99.2 | 145.7 | 46.3 | 16.7 | 8.8 |
* Sales in $ / sales in volume for consolidated affiliates.
** Sales in $ / sales in volume for consolidated and equity affiliates.
*** This indicator represents the average margin on variable costs realized by TotalEnergies’ European refining business (equal to the difference between the sales of refined products realized by TotalEnergies’ European refining and the crude purchases as well as associated variable costs, divided by refinery throughput in tons).
(1) Does not take into account gas and LNG trading activities, respectively.
Disclaimer: Data is based on TotalEnergies’ reporting and is not audited.
21
CONSOLIDATED STATEMENT OF INCOME
TotalEnergies
(unaudited)
3rd quarter | 2nd quarter | 3rd quarter | ||||
(M$)(a) | 2022 | 2022 | 2021 | |||
Sales | 69,037 | 74,774 | 54,729 | |||
Excise taxes | (4,075) | (4,329) | (5,659) | |||
Revenues from sales | 64,962 | 70,445 | 49,070 | |||
Purchases, net of inventory variation | (42,802) | (45,443) | (32,344) | |||
Other operating expenses | (6,771) | (8,041) | (6,617) | |||
Exploration costs | (71) | (117) | (127) | |||
Depreciation, depletion and impairment of tangible assets and mineral interests | (2,935) | (3,102) | (3,191) | |||
Other income | 1,693 | 429 | 195 | |||
Other expense | (921) | (1,305) | (605) | |||
Financial interest on debt | (633) | (572) | (454) | |||
Financial income and expense from cash & cash equivalents | 327 | 245 | 87 | |||
Cost of net debt | (306) | (327) | (367) | |||
Other financial income | 196 | 231 | 193 | |||
Other financial expense | (112) | (136) | (140) | |||
Net income (loss) from equity affiliates | (108) | (1,546) | 1,377 | |||
Income taxes | (6,077) | (5,284) | (2,692) | |||
Consolidated net income | 6,748 | 5,804 | 4,752 | |||
TotalEnergies share | 6,626 | 5,692 | 4,645 | |||
Non-controlling interests | 122 | 112 | 107 | |||
Earnings per share ($) | 2.58 | 2.18 | 1.72 | |||
Fully-diluted earnings per share ($) | 2.56 | 2.16 | 1.71 |
(a) Except for per share amounts.
22
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
TotalEnergies
(unaudited)
3rd quarter | 2nd quarter | 3rd quarter | |||
(M$) | 2022 | 2022 | 2021 | ||
Consolidated net income | 6,748 | 5,804 | 4,752 | ||
Other comprehensive income | |||||
Actuarial gains and losses | (17) | 204 | (3) | ||
Change in fair value of investments in equity instruments | 131 | (20) | (95) | ||
Tax effect | 2 | (53) | 5 | ||
Currency translation adjustment generated by the parent company | (4,639) | (5,387) | (2,368) | ||
Items not potentially reclassifiable to profit and loss | (4,523) | (5,256) | (2,461) | ||
Currency translation adjustment | 1,871 | 2,523 | 1,260 | ||
Cash flow hedge | 1,258 | 3,222 | 424 | ||
Variation of foreign currency basis spread | 9 | 21 | 2 | ||
share of other comprehensive income of equity affiliates, net amount | 191 | 2,548 | 184 | ||
Other | (18) | (1) | 1 | ||
Tax effect | (424) | (1,112) | (100) | ||
Items potentially reclassifiable to profit and loss | 2,887 | 7,201 | 1,771 | ||
Total other comprehensive income (net amount) | (1,636) | 1,945 | (690) | ||
Comprehensive income | 5,112 | 7,749 | 4,062 | ||
TotalEnergies share | 4,969 | 7,705 | 4,014 | ||
Non-controlling interests | 143 | 44 | 48 |
23
CONSOLIDATED STATEMENT OF INCOME
TotalEnergies
(unaudited)
9 months | 9 months | |||
(M$)(a) | 2022 | 2021 | ||
Sales | 212,417 | 145,515 | ||
Excise taxes | (13,060) | (16,179) | ||
Revenues from sales | 199,357 | 129,336 | ||
Purchases, net of inventory variation | (127,893) | (82,461) | ||
Other operating expenses | (22,435) | (20,214) | ||
Exploration costs | (1,049) | (417) | ||
Depreciation, depletion and impairment of tangible assets and mineral interests | (9,716) | (9,637) | ||
Other income | 2,265 | 776 | ||
Other expense | (4,516) | (1,562) | ||
Financial interest on debt | (1,667) | (1,421) | ||
Financial income and expense from cash & cash equivalents | 786 | 259 | ||
Cost of net debt | (881) | (1,162) | ||
Other financial income | 630 | 567 | ||
Other financial expense | (383) | (401) | ||
Net income (loss) from equity affiliates | (1,611) | 1,578 | ||
Income taxes | (16,165) | (5,940) | ||
Consolidated net income | 17,603 | 10,463 | ||
TotalEnergies share | 17,262 | 10,195 | ||
Non-controlling interests | 341 | 268 | ||
Earnings per share ($) | 6.61 | 3.77 | ||
Fully-diluted earnings per share ($) | 6.57 | 3.74 |
(a) Except for per share amounts.
24
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
TotalEnergies
(unaudited)
9 months | 9 months | ||
(M$) | 2022 | 2021 | |
Consolidated net income | 17,603 | 10,463 | |
Other comprehensive income | |||
Actuarial gains and losses | 187 | 446 | |
Change in fair value of investments in equity instruments | 114 | (27) | |
Tax effect | (40) | (149) | |
Currency translation adjustment generated by the parent company | (11,776) | (5,302) | |
Items not potentially reclassifiable to profit and loss | (11,515) | (5,032) | |
Currency translation adjustment | 5,406 | 3,037 | |
Cash flow hedge | 4,217 | 504 | |
Variation of foreign currency basis spread | 79 | (2) | |
share of other comprehensive income of equity affiliates, net amount | 2,655 | 635 | |
Other | (19) | 1 | |
Tax effect | (1,483) | (157) | |
Items potentially reclassifiable to profit and loss | 10,855 | 4,018 | |
Total other comprehensive income (net amount) | (660) | (1,014) | |
Comprehensive income | 16,943 | 9,449 | |
TotalEnergies share | 16,627 | 9,226 | |
Non-controlling interests | 316 | 223 |
25
CONSOLIDATED BALANCE SHEET
TotalEnergies
September 30, 2022 |
June 30, 2022 |
December 31, 2021 |
September
30, 2021 | ||||
(M$) | (unaudited) | (unaudited) | (unaudited) | ||||
ASSETS | |||||||
Non-current assets | |||||||
Intangible assets, net | 36,376 | 37,020 | 32,484 | 32,895 | |||
Property, plant and equipment, net | 99,700 | 101,454 | 106,559 | 105,902 | |||
Equity affiliates : investments and loans | 28,743 | 28,210 | 31,053 | 30,467 | |||
Other investments | 1,149 | 1,383 | 1,625 | 1,688 | |||
Non-current financial assets | 2,341 | 1,612 | 2,404 | 2,799 | |||
Deferred income taxes | 4,434 | 4,737 | 5,400 | 6,452 | |||
Other non-current assets | 2,930 | 3,075 | 2,797 | 2,530 | |||
Total non-current assets | 175,673 | 177,491 | 182,322 | 182,733 | |||
Current assets | |||||||
Inventories, net | 24,420 | 28,542 | 19,952 | 19,601 | |||
Accounts receivable, net | 28,191 | 30,796 | 21,983 | 19,865 | |||
Other current assets | 73,453 | 55,553 | 35,144 | 39,967 | |||
Current financial assets | 11,688 | 7,863 | 12,315 | 3,910 | |||
Cash and cash equivalents | 35,941 | 32,848 | 21,342 | 28,971 | |||
Assets classified as held for sale | 349 | 313 | 400 | 633 | |||
Total current assets | 174,042 | 155,915 | 111,136 | 112,947 | |||
Total assets | 349,715 | 333,406 | 293,458 | 295,680 |
LIABILITIES & SHAREHOLDERS' EQUITY | |||||||
Shareholders' equity | |||||||
Common shares | 8,163 | 8,163 | 8,224 | 8,224 | |||
Paid-in surplus and retained earnings | 131,382 | 125,554 | 117,849 | 113,795 | |||
Currency translation adjustment | (16,720) | (14,019) | (12,671) | (11,995) | |||
Treasury shares | (5,004) | (3,010) | (1,666) | (8) | |||
Total shareholders' equity - TotalEnergies share | 117,821 | 116,688 | 111,736 | 110,016 | |||
Non-controlling interests | 2,851 | 3,309 | 3,263 | 3,211 | |||
Total shareholders' equity | 120,672 | 119,997 | 114,999 | 113,227 | |||
Non-current liabilities | |||||||
Deferred income taxes | 12,576 | 12,169 | 10,904 | 11,161 | |||
Employee benefits | 2,207 | 2,341 | 2,672 | 3,218 | |||
Provisions and other non-current liabilities | 22,133 | 23,373 | 20,269 | 20,355 | |||
Non-current financial debt | 44,899 | 46,868 | 49,512 | 50,810 | |||
Total non-current liabilities | 81,815 | 84,751 | 83,357 | 85,544 | |||
Current liabilities | |||||||
Accounts payable | 48,942 | 49,700 | 36,837 | 34,149 | |||
Other creditors and accrued liabilities | 80,468 | 62,498 | 42,800 | 45,476 | |||
Current borrowings | 16,923 | 16,003 | 15,035 | 16,471 | |||
Other current financial liabilities | 861 | 401 | 372 | 504 | |||
Liabilities directly associated with the assets classified as held for sale | 34 | 56 | 58 | 309 | |||
Total current liabilities | 147,228 | 128,658 | 95,102 | 96,909 | |||
Total liabilities & shareholders' equity | 349,715 | 333,406 | 293,458 | 295,680 |
26
CONSOLIDATED STATEMENT OF CASH FLOW
TotalEnergies
(unaudited)
3rd quarter | 2nd quarter | 3rd quarter | |||
(M$) | 2022 | 2022 | 2021 | ||
CASH FLOW FROM OPERATING ACTIVITIES | |||||
Consolidated net income | 6,748 | 5,804 | 4,752 | ||
Depreciation, depletion, amortization and impairment | 3,032 | 3,321 | 3,361 | ||
Non-current liabilities, valuation allowances and deferred taxes | 704 | 1,427 | 479 | ||
(Gains) losses on disposals of assets | (1,645) | (165) | 100 | ||
Undistributed affiliates' equity earnings | 1,290 | 2,999 | (506) | ||
(Increase) decrease in working capital | 7,407 | 2,498 | (2,698) | ||
Other changes, net | 312 | 400 | 152 | ||
Cash flow from operating activities | 17,848 | 16,284 | 5,640 |
CASH FLOW USED IN INVESTING ACTIVITIES | |||||
Intangible assets and property, plant and equipment additions | (2,986) | (5,150) | (2,718) | ||
Acquisitions of subsidiaries, net of cash acquired | (8) | (82) | (23) | ||
Investments in equity affiliates and other securities | (2,557) | (136) | (67) | ||
Increase in non-current loans | (246) | (278) | (219) | ||
Total expenditures | (5,797) | (5,646) | (3,027) | ||
Proceeds from disposals of intangible assets and property, plant and equipment | 97 | 153 | 150 | ||
Proceeds from disposals of subsidiaries, net of cash sold | 524 | 63 | 4 | ||
Proceeds from disposals of non-current investments | 304 | 35 | 177 | ||
Repayment of non-current loans | 797 | 413 | 240 | ||
Total divestments | 1,722 | 664 | 571 | ||
Cash flow used in investing activities | (4,075) | (4,982) | (2,456) |
CASH FLOW USED IN FINANCING ACTIVITIES | |||||
Issuance (repayment) of shares: | |||||
- Parent company shareholders | (1) | 371 | - | ||
- Treasury shares | (1,996) | (1,988) | - | ||
Dividends paid: | |||||
- Parent company shareholders | (1,877) | (1,825) | (2,053) | ||
- Non-controlling interests | (405) | (97) | (41) | ||
Net issuance (repayment) of perpetual subordinated notes | - | (1,958) | - | ||
Payments on perpetual subordinated notes | (14) | (138) | (22) | ||
Other transactions with non-controlling interests | 38 | (10) | 721 | ||
Net issuance (repayment) of non-current debt | 141 | 508 | 133 | ||
Increase (decrease) in current borrowings | (527) | (2,703) | (1,457) | ||
Increase (decrease) in current financial assets and liabilities | (4,473) | (731) | 513 | ||
Cash flow from (used in) financing activities | (9,114) | (8,571) | (2,206) | ||
Net increase (decrease) in cash and cash equivalents | 4,659 | 2,731 | 978 | ||
Effect of exchange rates | (1,566) | (1,159) | (650) | ||
Cash and cash equivalents at the beginning of the period | 32,848 | 31,276 | 28,643 | ||
Cash and cash equivalents at the end of the period | 35,941 | 32,848 | 28,971 |
27
CONSOLIDATED STATEMENT OF CASH FLOW
TotalEnergies
(unaudited)
9 months | 9 months | ||
(M$) | 2022 | 2021 | |
CASH FLOW FROM OPERATING ACTIVITIES | |||
Consolidated net income | 17,603 | 10,463 | |
Depreciation, depletion, amortization and impairment | 10,931 | 10,121 | |
Non-current liabilities, valuation allowances and deferred taxes | 4,669 | 810 | |
(Gains) losses on disposals of assets | (1,823) | (270) | |
Undistributed affiliates' equity earnings | 4,551 | 176 | |
(Increase) decrease in working capital | 4,982 | (2,848) | |
Other changes, net | 836 | 337 | |
Cash flow from operating activities | 41,749 | 18,789 | |
CASH FLOW USED IN INVESTING ACTIVITIES | |||
Intangible assets and property, plant and equipment additions | (11,593) | (7,803) | |
Acquisitions of subsidiaries, net of cash acquired | (90) | (193) | |
Investments in equity affiliates and other securities | (2,782) | (2,500) | |
Increase in non-current loans | (765) | (899) | |
Total expenditures | (15,230) | (11,395) | |
Proceeds from disposals of intangible assets and property, plant and equipment | 427 | 421 | |
Proceeds from disposals of subsidiaries, net of cash sold | 675 | 233 | |
Proceeds from disposals of non-current investments | 554 | 456 | |
Repayment of non-current loans | 2,139 | 541 | |
Total divestments | 3,795 | 1,651 | |
Cash flow used in investing activities | (11,435) | (9,744) | |
CASH FLOW USED IN FINANCING ACTIVITIES | |||
Issuance (repayment) of shares: | |||
- Parent company shareholders | 370 | 381 | |
- Treasury shares | (5,160) | (165) | |
Dividends paid: | |||
- Parent company shareholders | (5,630) | (6,237) | |
- Non-controlling interests | (524) | (104) | |
Net issuance (repayment) of perpetual subordinated notes | - | 3,248 | |
Payments on perpetual subordinated notes | (288) | (256) | |
Other transactions with non-controlling interests | 33 | 666 | |
Net issuance (repayment) of non-current debt | 683 | (706) | |
Increase (decrease) in current borrowings | (2,573) | (7,488) | |
Increase (decrease) in current financial assets and liabilities | 390 | 298 | |
Cash flow from (used in) financing activities | (12,699) | (10,363) | |
Net increase (decrease) in cash and cash equivalents | 17,615 | (1,318) | |
Effect of exchange rates | (3,016) | (979) | |
Cash and cash equivalents at the beginning of the period | 21,342 | 31,268 | |
Cash and cash equivalents at the end of the period | 35,941 | 28,971 |
28
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
TotalEnergies
(unaudited)
Common shares issued | Paid-in | Currency | Treasury shares | Shareholders’ | Non- | Total | ||||||
surplus and | translation | equity - | controlling | shareholders’ | ||||||||
retained | adjustment | TotalEnergies | interests | equity | ||||||||
(M$) | Number | Amount | earnings | Number | Amount | Share | ||||||
As of January 1, 2021 | 2,653,124,025 | 8,267 | 107,078 | (10,256) | (24,392,703) | (1,387) | 103,702 | 2,383 | 106,085 | |||
Net income of the first nine months 2021 | - | - | 10,195 | - | - | - | 10,195 | 268 | 10,463 | |||
Other comprehensive income | - | - | 762 | (1,731) | - | - | (969) | (45) | (1,014) | |||
Comprehensive Income | - | - | 10,957 | (1,731) | - | - | 9,226 | 223 | 9,449 | |||
Dividend | - | - | (6,236) | - | - | - | (6,236) | (104) | (6,340) | |||
Issuance of common shares | 10,589,713 | 31 | 350 | - | - | - | 381 | - | 381 | |||
Purchase of treasury shares | - | - | - | - | (3,636,351) | (165) | (165) | - | (165) | |||
Sale of treasury shares(a) | - | - | (216) | - | 4,571,235 | 216 | - | - | - | |||
Share-based payments | - | - | 103 | - | - | - | 103 | - | 103 | |||
Share cancellation | (23,284,409) | (74) | (1,254) | - | 23,284,409 | 1,328 | - | - | - | |||
Net issuance (repayment) of perpetual subordinated notes | - | - | 3,254 | - | - | - | 3,254 | - | 3,254 | |||
Payments on perpetual subordinated notes | - | - | (278) | - | - | - | (278) | - | (278) | |||
Other operations with non-controlling interests |
- | - | 26 | (6) | - | - | 20 | 701 | 721 | |||
Other items | - | - | 11 | (2) | - | - | 9 | 8 | 17 | |||
As of September 30, 2021 | 2,640,429,329 | 8,224 | 113,795 | (11,995) | (173,410) | (8) | 110,016 | 3,211 | 113,227 | |||
Net income of the fourth quarter 2021 | - | - | 5,837 | - | - | - | 5,837 | 66 | 5,903 | |||
Other comprehensive income | - | - | 229 | (676) | - | - | (447) | 15 | (432) | |||
Comprehensive Income | - | - | 6,066 | (676) | - | - | 5,390 | 81 | 5,471 | |||
Dividend | - | - | (1,964) | - | - | - | (1,964) | (20) | (1,984) | |||
Issuance of common shares | - | - | - | - | - | - | - | - | - | |||
Purchase of treasury shares | - | - | - | - | (33,669,654) | (1,658) | (1,658) | - | (1,658) | |||
Sale of treasury shares(a) | - | - | - | - | 1,960 | - | - | - | - | |||
Share-based payments | - | - | 40 | - | - | - | 40 | - | 40 | |||
Share cancellation | - | - | - | - | - | - | - | - | - | |||
Net issuance (repayment) of perpetual subordinated notes | - | - | - | - | - | - | - | - | - | |||
Payments on perpetual subordinated notes | - | - | (90) | - | - | - | (90) | - | (90) | |||
Other operations with non-controlling interests |
- | - | 4 | - | - | - | 4 | (12) | (8) | |||
Other items | - | - | (2) | - | - | - | (2) | 3 | 1 | |||
As of December 31, 2021 | 2,640,429,329 | 8,224 | 117,849 | (12,671) | (33,841,104) | (1,666) | 111,736 | 3,263 | 114,999 | |||
Net income of the first nine months 2022 | - | - | 17,262 | - | - | - | 17,262 | 341 | 17,603 | |||
Other comprehensive income | - | - | 3,421 | (4,056) | - | - | (635) | (25) | (660) | |||
Comprehensive Income | - | - | 20,683 | (4,056) | - | - | 16,627 | 316 | 16,943 | |||
Dividend | - | - | (5,653) | - | - | - | (5,653) | (524) | (6,177) | |||
Issuance of common shares | 9,367,482 | 26 | 344 | - | - | - | 370 | - | 370 | |||
Purchase of treasury shares | - | - | - | - | (97,376,124) | (5,160) | (5,160) | - | (5,160) | |||
Sale of treasury shares(a) | - | - | (317) | - | 6,193,921 | 317 | - | - | - | |||
Share-based payments | - | - | 191 | - | - | - | 191 | - | 191 | |||
Share cancellation | (30,665,526) | (87) | (1,418) | - | 30,665,526 | 1,505 | - | - | - | |||
Net issuance (repayment) of perpetual subordinated notes | - | - | (44) | - | - | - | (44) | - | (44) | |||
Payments on perpetual subordinated notes | - | - | (255) | - | - | - | (255) | - | (255) | |||
Other operations with non-controlling interests |
- | - | 41 | 7 | - | - | 48 | 124 | 172 | |||
Other items | - | - | (39) | - | - | - | (39) | (328) | (367) | |||
As of September 30, 2022 | 2,619,131,285 | 8,163 | 131,382 | (16,720) | (94,357,781) | (5,004) | 117,821 | 2,851 | 120,672 |
(a)Treasury shares related to the performance share grants.
29
TotalEnergies
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FIRST NINE MONTHS 2022
(unaudited)
1) Basis of preparation of the consolidated financial statements
The consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and IFRS as published by the International Accounting Standards Board (IASB).
The interim consolidated financial statements of TotalEnergies SE and its subsidiaries (the Company) as of September 30, 2022, are presented in U.S. dollars and have been prepared in accordance with International Accounting Standard (IAS) 34 “Interim Financial Reporting”.
The accounting principles applied for the consolidated financial statements at September 30, 2022, are consistent with those used for the financial statements at December 31, 2021. Since January 1, 2020, the Company has 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.
The preparation of financial statements in accordance with IFRS for the closing as of September 30, 2022 requires the General 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 General Management and therefore could be revised as circumstances change or as a result of new information.
The main estimates, judgments and assumptions relate to the estimation of hydrocarbon reserves in application of the successful efforts method for the oil and gas activities, asset impairments, employee benefits, asset retirement obligations and income taxes. These estimates and assumptions are described in the Notes to the Consolidated Financial Statements as of December 31, 2021.
The interim consolidated financial statements are impacted by the Russian-Ukrainian conflict described in paragraph 7 Other risks and commitments. The Company has taken this environment into account in its estimates and recorded in its accounts as of March 31, 2022, an impairment of $(4,095) million, concerning notably Arctic LNG 2. As of June 30, 2022, TotalEnergies recorded in its accounts an impairment of $(3,513) million, related mainly to the potential impact of international sanctions on the value of its Novatek stake and as of September 30 2022, TotalEnergies recorded in its accounts an additional impairment of $(3,056) million.
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.
Furthermore, when the accounting treatment of a specific transaction is not addressed by any accounting standard or interpretation, the General Management of the Company applies its judgment to define and apply accounting policies that provide information consistent with the general IFRS concepts: faithful representation, relevance and materiality.
2) Changes in the Company structure
2.1) Main acquisitions and divestments
⮚ | Integrated Gas, Renewables & Power |
· | On February 28, 2022, TotalEnergies has successfully been named a winner of maritime lease area OCS-A 0538 by the BOEM (Bureau of Ocean Energy Management) in the New York Bight auction in United States. |
30
This bid for the development of an offshore wind farm off the U.S. East Coast was won for a consideration of $795 million (100%) by both TotalEnergies and EnBW.
Located up to 47 nautical miles (87 kilometers) from the coast, the lease covers a 132 square miles (341 square kilometer) area that could accommodate a generation capacity of at least 3 GW, enough to provide power to about one million homes. The project is expected to come online by 2028.
· | In September 2022, TotalEnergies finalized the acquisition of 50% of Clearway Energy Group (CEG), the 5th US renewable energy player, with Global Infrastructure Partners (GIP). |
In the frame of this transaction, GIP received $1.6 billion in cash and an interest of 50% minus one share in the TotalEnergies subsidiary that holds a 50.5% ownership in SunPower Corporation, leader in residential solar in the U.S.
These transactions had an impact of $1,391 million on TotalEnergies' net income and as of September 30, 2022, TotalEnergies' interests in Clearway Energy Group (CEG) and in TotalEnergies' subsidiary that holds a 50.5% ownership in SunPower are accounted for using the equity method. This impact is treated as an adjustment item.
⮚ | Exploration & Production |
· | In January 2022, TotalEnergies has decided to initiate the contractual process of withdrawing from the Yadana field and from MGTC in Myanmar, both as operator and as shareholder, without any financial compensation for TotalEnergies. |
As a result, TotalEnergies registered an impairment of assets of $(201) million in operational result and of $(305) million in TotalEnergies’ share net result in the financial statements as of December 31, 2021.
This withdrawal became effective on 20 July 2022.
· | In February 2022, TotalEnergies announced its decision not to sanction and so to withdraw from the North Platte deepwater project in the US Gulf of Mexico. |
The decision not to continue with the project was taken as TotalEnergies has better opportunities of allocation of its capital within its global portfolio.
An impairment of the project’s assets has been recorded in the consolidated financial statements of the first quarter of 2022, for an amount of $(957) million in net income, TotalEnergies’ share.
· | In April 2022, TotalEnergies finalized the acquisition of the Atapu and Sepia pre-salt oil fields offered by Brazil’s National Agency of Petroleum, Natural Gas and Biofuels (ANP) in the Transfer of Rights (ToR) Surplus bidding round, that took place in December 2021. |
The details of the acquisition are presented in Note 2.2 to the consolidated financial statements.
2.2) Major business combinations
⮚ | Exploration & Production |
· | Transfer of rights in the Atapu and Sepia fields in Brazil |
On 26 April 2022, Petrobras transferred to TotalEnergies 22.5% of the rights of the pre-salt Atapu oil field. Production started in 2020 and has reached a plateau of 160,000 barrels per day with a first Floating, Production, Storage and Offloading unit (FPSO). A second FPSO is planned to be sanctioned, which would increase the overall oil production of the field to around 350,000 b/d.
On 27 April 2022, Petrobras also transferred to TotalEnergies 28% of the rights of the pre-salt Sepia oil field. Production started in 2021 and is targeting a plateau of 180,000 barrels per day with a first Floating, Production, Storage and Offloading unit (FPSO). A second FPSO is planned to be sanctioned, which would increase the overall oil production of the field to around 350,000 b/d.
In accordance with IFRS 3, TotalEnergies 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.
31
2.3) Divestment projects
As of September 30, 2022, there is no material divestment project recorded in “assets held for sale”.
3) Business segment information
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 TotalEnergies and which is reviewed by the main operational decision-making body of the Company, 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 organization of the Company's activities is structured around the four followings segments:
- | An Integrated Gas, Renewables & Power segment comprising integrated gas (including LNG) and low carbon electricity businesses. It includes the upstream and midstream LNG activity; |
- | An Exploration & Production segment; Starting September 2021, it notably includes the carbon neutrality activity that was previously reported in the Integrated Gas, Renewables & Power segment; |
- | A Refining & Chemicals segment constituting a major industrial hub comprising the activities of refining, petrochemicals and specialty chemicals. This segment also includes the activities of oil Supply, Trading and marine Shipping; |
- | A Marketing & Services segment including the global activities of supply and marketing in the field of petroleum products; |
In addition the Corporate segment includes holdings operating and financial activities.
32
Adjustment items
Performance indicators excluding the adjustment items, such as adjusted operating income, adjusted net operating income, and adjusted net income are meant to facilitate the analysis of the financial performance and the comparison of income between periods.
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 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 TotalEnergies’s management 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.
TotalEnergies, in its trading activities, enters into storage contracts, whose future effects are recorded at fair value in the Company’s internal economic performance. IFRS precludes recognition of this fair value effect.
Furthermore, TotalEnergies 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.
33
3.1) Information by business segment
9 months 2022
(M$) |
Integrated Gas, Renewables & Power |
Exploration & Production |
Refining & Chemicals |
Marketing & Services |
Corporate | Intercompany | Total |
External sales | 34,070 | 7,342 | 94,968 | 76,024 | 13 | - | 212,417 |
Intersegment sales | 5,113 | 42,324 | 34,127 | 1,159 | 185 | (82,908) | - |
Excise taxes | - | - | (538) | (12,522) | - | - | (13,060) |
Revenues from sales | 39,183 | 49,666 | 128,557 | 64,661 | 198 | (82,908) | 199,357 |
Operating expenses | (33,277) | (18,348) | (119,790) | (61,807) | (1,063) | 82,908 | (151,377) |
Depreciation, depletion and impairment of tangible assets and mineral interests | (943) | (6,772) | (1,140) | (757) | (104) | - | (9,716) |
Operating income | 4,963 | 24,546 | 7,627 | 2,097 | (969) | - | 38,264 |
Net income (loss) from equity affiliates and other items | 1,513 | (6,069) | 724 | 42 | 175 | - | (3,615) |
Tax on net operating income | (1,331) | (12,810) | (1,646) | (674) | 259 | - | (16,202) |
Net operating income | 5,145 | 5,667 | 6,705 | 1,465 | (535) | - | 18,447 |
Net cost of net debt | (844) | ||||||
Non-controlling interests | (341) | ||||||
Net income - TotalEnergies share | 17,262 | ||||||
9 months 2022 (adjustments)(a)
(M$) |
Integrated Gas, Renewables & Power |
Exploration & Production |
Refining & Chemicals |
Marketing & Services |
Corporate | Intercompany | Total |
External sales | 35 | - | - | - | - | - | 35 |
Intersegment sales | - | - | - | - | - | - | - |
Excise taxes | - | - | - | - | - | - | - |
Revenues from sales | 35 | - | - | - | - | - | 35 |
Operating expenses | (1,014) | (877) | 951 | 411 | (512) | - | (1,041) |
Depreciation, depletion and impairment of tangible assets and mineral interests | (14) | (546) | - | (35) | (9) | - | (604) |
Operating income (b) | (993) | (1,423) | 951 | 376 | (521) | - | (1,610) |
Net income (loss) from equity affiliates and other items | (3,182) | (6,900) | 69 | (14) | 106 | - | (9,921) |
Tax on net operating income | 65 | 39 | (130) | (113) | 118 | - | (21) |
Net operating income (b) | (4,110) | (8,284) | 890 | 249 | (297) | - | (11,552) |
Net cost of net debt | 269 | ||||||
Non-controlling interests | (91) | ||||||
Net income - TotalEnergies share | (11,374) | ||||||
(a) Adjustments include special items, inventory valuation effect and the effect of changes in fair value. | |||||||
(b) Of which inventory valuation effect | |||||||
- On operating income | - | - | 951 | 445 | - | ||
- On net operating income | - | - | 922 | 331 | - | ||
9 months 2022 (adjusted)
(M$) |
Integrated Gas, Renewables & Power |
Exploration & Production |
Refining & Chemicals |
Marketing & Services |
Corporate | Intercompany | Total |
External sales | 34,035 | 7,342 | 94,968 | 76,024 | 13 | - | 212,382 |
Intersegment sales | 5,113 | 42,324 | 34,127 | 1,159 | 185 | (82,908) | - |
Excise taxes | - | - | (538) | (12,522) | - | - | (13,060) |
Revenues from sales | 39,148 | 49,666 | 128,557 | 64,661 | 198 | (82,908) | 199,322 |
Operating expenses | (32,263) | (17,471) | (120,741) | (62,218) | (551) | 82,908 | (150,336) |
Depreciation, depletion and impairment of tangible assets and mineral interests | (929) | (6,226) | (1,140) | (722) | (95) | - | (9,112) |
Adjusted operating income | 5,956 | 25,969 | 6,676 | 1,721 | (448) | - | 39,874 |
Net income (loss) from equity affiliates and other items | 4,695 | 831 | 655 | 56 | 69 | - | 6,306 |
Tax on net operating income | (1,396) | (12,849) | (1,516) | (561) | 141 | - | (16,181) |
Adjusted net operating income | 9,255 | 13,951 | 5,815 | 1,216 | (238) | - | 29,999 |
Net cost of net debt | (1,113) | ||||||
Non-controlling interests | (250) | ||||||
Adjusted net income - TotalEnergies share | 28,636 | ||||||
9 months 2022
(M$) |
Integrated Gas, Renewables & Power |
Exploration & Production |
Refining & Chemicals |
Marketing & Services |
Corporate | Intercompany | Total |
Total expenditures | 5,525 | 8,168 | 803 | 679 | 55 | 15,230 | |
Total divestments | 2,922 | 592 | 89 | 180 | 12 | 3,795 | |
Cash flow from operating activities | 8,675 | 23,619 | 8,431 | 2,417 | (1,393) | 41,749 |
34
9 months 2021 | Integrated Gas, |
Exploration |
Refining |
Marketing |
|||
(M$) | Renewables & Power |
& Production |
& Chemicals |
& Services |
Corporate
|
Intercompany
|
Total
|
External sales | 19,070 | 5,178 | 62,819 | 58,434 | 14 | - | 145,515 |
Intersegment sales | 2,794 | 23,021 | 18,921 | 296 | 106 | (45,138) | - |
Excise taxes | - | - | (870) | (15,309) | - | - | (16,179) |
Revenues from sales | 21,864 | 28,199 | 80,870 | 43,421 | 120 | (45,138) | 129,336 |
Operating expenses | (18,823) | (11,310) | (76,732) | (40,812) | (553) | 45,138 | (103,092) |
Depreciation, depletion and impairment of tangible assets and mineral interests | (1,105) | (6,473) | (1,184) | (793) | (82) | - | (9,637) |
Operating income | 1,936 | 10,416 | 2,954 | 1,816 | (515) | - | 16,607 |
Net income (loss) from equity affiliates and other items | 1,464 | (834) | 290 | 25 | 13 | - | 958 |
Tax on net operating income | (365) | (4,382) | (834) | (574) | 77 | - | (6,078) |
Net operating income | 3,035 | 5,200 | 2,410 | 1,267 | (425) | - | 11,487 |
Net cost of net debt | (1,024) | ||||||
Non-controlling interests | (268) | ||||||
Net income - TotalEnergies share | 10,195 |
9 months 2021 (adjustments)(a) | Integrated Gas, |
Exploration |
Refining |
Marketing |
|||
(M$) | Renewables & Power |
& Production |
& Chemicals |
& Services |
Corporate
|
Intercompany
|
Total
|
External sales | (44) | - | - | - | - | - | (44) |
Intersegment sales | - | - | - | - | - | - | - |
Excise taxes | - | - | - | - | - | - | - |
Revenues from sales | (44) | - | - | - | - | - | (44) |
Operating expenses | (214) | (55) | 1,432 | 257 | - | - | 1,420 |
Depreciation, depletion and impairment of tangible assets and mineral interests | (155) | - | (25) | - | - | - | (180) |
Operating income (b) | (413) | (55) | 1,407 | 257 | - | - | 1,196 |
Net income (loss) from equity affiliates and other items | (99) | (1,728) | 33 | (55) | (60) | - | (1,909) |
Tax on net operating income | 63 | 69 | (386) | (74) | 2 | - | (326) |
Net operating income (b) | (449) | (1,714) | 1,054 | 128 | (58) | - | (1,039) |
Net cost of net debt | 15 | ||||||
Non-controlling interests | (16) | ||||||
Net income - TotalEnergies share | (1,040) |
(a) Adjustments include special items, inventory valuation effect and the effect of changes in fair value. | |||||||
(b) Of which inventory valuation effect | |||||||
- On operating income | - | - | 1,449 | 262 | - | ||
- On net operating income | - | - | 1,222 | 189 | - |
9 months 2021 (adjusted) | Integrated Gas, |
Exploration |
Refining |
Marketing |
|||
(M$) | Renewables & Power |
& Production |
& Chemicals |
& Services |
Corporate
|
Intercompany
|
Total
|
External sales | 19,114 | 5,178 | 62,819 | 58,434 | 14 | - | 145,559 |
Intersegment sales | 2,794 | 23,021 | 18,921 | 296 | 106 | (45,138) | - |
Excise taxes | - | - | (870) | (15,309) | - | - | (16,179) |
Revenues from sales | 21,908 | 28,199 | 80,870 | 43,421 | 120 | (45,138) | 129,380 |
Operating expenses | (18,609) | (11,255) | (78,164) | (41,069) | (553) | 45,138 | (104,512) |
Depreciation, depletion and impairment of tangible assets and mineral interests | (950) | (6,473) | (1,159) | (793) | (82) | - | (9,457) |
Adjusted operating income | 2,349 | 10,471 | 1,547 | 1,559 | (515) | - | 15,411 |
Net income (loss) from equity affiliates and other items | 1,563 | 894 | 257 | 80 | 73 | - | 2,867 |
Tax on net operating income | (428) | (4,451) | (448) | (500) | 75 | - | (5,752) |
Adjusted net operating income | 3,484 | 6,914 | 1,356 | 1,139 | (367) | - | 12,526 |
Net cost of net debt | (1,039) | ||||||
Non-controlling interests | (252) | ||||||
Adjusted net income - TotalEnergies share | 11,235 |
9 months 2021 | Integrated Gas, |
Exploration |
Refining |
Marketing |
|||
(M$) | Renewables & Power |
& Production |
& Chemicals |
& Services |
Corporate
|
Intercompany
|
Total
|
Total expenditures | 4,870 | 4,949 | 915 | 599 | 62 | 11,395 | |
Total divestments | 810 | 537 | 146 | 138 | 20 | 1,651 | |
Cash flow from operating activities | 884 | 13,385 | 4,027 | 1,947 | (1,454) | 18,789 |
35
3rd quarter 2022 | Integrated Gas, | Exploration | Refining | Marketing | |||
(M$) | Renewables & Power |
& Production |
& Chemicals |
& Services |
Corporate
|
Intercompany
|
Total
|
External sales | 11,495 | 2,670 | 28,899 | 25,968 | 5 | - | 69,037 |
Intersegment sales | 1,753 | 14,701 | 12,065 | 176 | 52 | (28,747) | - |
Excise taxes | - | - | (160) | (3,915) | - | - | (4,075) |
Revenues from sales | 13,248 | 17,371 | 40,804 | 22,229 | 57 | (28,747) | 64,962 |
Operating expenses | (10,648) | (6,880) | (39,137) | (21,513) | (213) | 28,747 | (49,644) |
Depreciation, depletion and impairment of tangible assets and mineral interests | (295) | (1,999) | (371) | (243) | (27) | - | (2,935) |
Operating income | 2,305 | 8,492 | 1,296 | 473 | (183) | - | 12,383 |
Net income (loss) from equity affiliates and other items | 3,190 | (2,643) | 219 | (14) | (4) | - | 748 |
Tax on net operating income | (777) | (5,071) | (255) | (153) | 162 | - | (6,094) |
Net operating income | 4,718 | 778 | 1,260 | 306 | (25) | - | 7,037 |
Net cost of net debt | (289) | ||||||
Non-controlling interests | (122) | ||||||
Net income - TotalEnergies share | 6,626 |
3rd quarter 2022 (adjustments)(a) | Integrated Gas, | Exploration | Refining | Marketing | |||
(M$) | Renewables & Power |
& Production |
& Chemicals |
& Services |
Corporate
|
Intercompany
|
Total
|
External sales | 38 | - | - | - | - | - | 38 |
Intersegment sales | - | - | - | - | - | - | - |
Excise taxes | - | - | - | - | - | - | - |
Revenues from sales | 38 | - | - | - | - | - | 38 |
Operating expenses | (291) | (4) | (771) | (230) | (79) | - | (1,375) |
Depreciation, depletion and impairment of tangible assets and mineral interests | - | (7) | - | (2) | - | - | (9) |
Operating income (b) | (253) | (11) | (771) | (232) | (79) | - | (1,346) |
Net income (loss) from equity affiliates and other items | 1,315 | (3,130) | (100) | (7) | - | - | (1,922) |
Tax on net operating income | 7 | (298) | 196 | 67 | 20 | - | (8) |
Net operating income (b) | 1,069 | (3,439) | (675) | (172) | (59) | - | (3,276) |
Net cost of net debt | 76 | ||||||
Non-controlling interests | (37) | ||||||
Net income - TotalEnergies share | (3,237) | ||||||
(a) Adjustments include special items, inventory valuation effect and the effect of changes in fair value. | |||||||
(b) Of which inventory valuation effect | |||||||
- On operating income | - | - | (771) | (239) | - | ||
- On net operating income | - | - | (675) | (172) | - |
3rd quarter 2022 (adjusted) | Integrated Gas, | Exploration | Refining | Marketing | |||
(M$) | Renewables & Power |
& Production |
& Chemicals |
& Services |
Corporate
|
Intercompany
|
Total
|
External sales | 11,457 | 2,670 | 28,899 | 25,968 | 5 | - | 68,999 |
Intersegment sales | 1,753 | 14,701 | 12,065 | 176 | 52 | (28,747) | - |
Excise taxes | - | - | (160) | (3,915) | - | - | (4,075) |
Revenues from sales | 13,210 | 17,371 | 40,804 | 22,229 | 57 | (28,747) | 64,924 |
Operating expenses | (10,357) | (6,876) | (38,366) | (21,283) | (134) | 28,747 | (48,269) |
Depreciation, depletion and impairment of tangible assets and mineral interests | (295) | (1,992) | (371) | (241) | (27) | - | (2,926) |
Adjusted operating income | 2,558 | 8,503 | 2,067 | 705 | (104) | - | 13,729 |
Net income (loss) from equity affiliates and other items | 1,875 | 487 | 319 | (7) | (4) | - | 2,670 |
Tax on net operating income | (784) | (4,773) | (451) | (220) | 142 | - | (6,086) |
Adjusted net operating income | 3,649 | 4,217 | 1,935 | 478 | 34 | - | 10,313 |
Net cost of net debt | (365) | ||||||
Non-controlling interests | (85) | ||||||
Adjusted net income - TotalEnergies share | 9,863 |
3rd quarter 2022 | Integrated Gas, | Exploration | Refining | Marketing | |||
(M$) | Renewables & Power |
& Production |
& Chemicals |
& Services |
Corporate
|
Intercompany
|
Total
|
Total expenditures | 3,214 | 2,069 | 242 | 251 | 21 | 5,797 | |
Total divestments | 1,441 | 246 | 6 | 29 | - | 1,722 | |
Cash flow from operating activities | 4,390 | 9,083 | 3,798 | 939 | (362) | 17,848 |
36
3rd quarter 2021 | Integrated Gas, | Exploration | Refining | Marketing | |||
Renewables | & | & | & | Corporate | Intercompany | Total | |
(M$) | & Power | Production | Chemicals | Services | |||
External sales | 8,482 | 1,921 | 22,765 | 21,554 | 7 | - | 54,729 |
Intersegment sales | 1,239 | 8,588 | 7,031 | 110 | 38 | (17,006) | - |
Excise taxes | - | - | (240) | (5,419) | - | - | (5,659) |
Revenues from sales | 9,721 | 10,509 | 29,556 | 16,245 | 45 | (17,006) | 49,070 |
Operating expenses | (8,502) | (3,958) | (28,153) | (15,302) | (179) | 17,006 | (39,088) |
Depreciation, depletion and impairment of tangible assets and mineral interests | (343) | (2,156) | (397) | (267) | (28) | - | (3,191) |
Operating income | 876 | 4,395 | 1,006 | 676 | (162) | - | 6,791 |
Net income (loss) from equity affiliates and other items | 782 | 139 | 79 | 2 | 18 | - | 1,020 |
Tax on net operating income | (208) | (2,007) | (273) | (222) | 23 | - | (2,687) |
Net operating income | 1,450 | 2,527 | 812 | 456 | (121) | - | 5,124 |
Net cost of net debt | (372) | ||||||
Non-controlling interests | (107) | ||||||
Net income - TotalEnergies share | 4,645 |
3rd quarter 2021 (adjustments)(a) | Integrated Gas, | Exploration | Refining | Marketing | |||
Renewables | & | & | & | Corporate | Intercompany | Total | |
(M$) | & Power | Production | Chemicals | Services | |||
External sales | - | - | - | - | - | - | - |
Intersegment sales | - | - | - | - | - | - | - |
Excise taxes | - | - | - | - | - | - | - |
Revenues from sales | - | - | - | - | - | - | - |
Operating expenses | (152) | (32) | 301 | 44 | - | - | 161 |
Depreciation, depletion and impairment of tangible assets and mineral interests | (7) | - | (12) | - | - | - | (19) |
Operating income (b) | (159) | (32) | 289 | 44 | - | - | 142 |
Net income (loss) from equity affiliates and other items | (3) | (246) | 5 | (12) | 2 | - | (254) |
Tax on net operating income | 4 | 79 | (84) | (14) | - | - | (15) |
Net operating income (b) | (158) | (199) | 210 | 18 | 2 | - | (127) |
Net cost of net debt | 5 | ||||||
Non-controlling interests | (2) | ||||||
Net income - TotalEnergies share | (124) | ||||||
(a) Adjustments include special items, inventory valuation effect and the effect of changes in fair value. | |||||||
(b) Of which inventory valuation effect | |||||||
- On operating income | - | - | 309 | 56 | - | ||
- On net operating income | - | - | 285 | 41 | - |
3rd quarter 2021 (adjusted) | Integrated Gas, | Exploration | Refining | Marketing | |||
Renewables | & | & | & | Corporate | Intercompany | Total | |
(M$) | & Power | Production | Chemicals | Services | |||
External sales | 8,482 | 1,921 | 22,765 | 21,554 | 7 | - | 54,729 |
Intersegment sales | 1,239 | 8,588 | 7,031 | 110 | 38 | (17,006) | - |
Excise taxes | - | - | (240) | (5,419) | - | - | (5,659) |
Revenues from sales | 9,721 | 10,509 | 29,556 | 16,245 | 45 | (17,006) | 49,070 |
Operating expenses | (8,350) | (3,926) | (28,454) | (15,346) | (179) | 17,006 | (39,249) |
Depreciation, depletion and impairment of tangible assets and mineral interests | (336) | (2,156) | (385) | (267) | (28) | - | (3,172) |
Adjusted operating income | 1,035 | 4,427 | 717 | 632 | (162) | - | 6,649 |
Net income (loss) from equity affiliates and other items | 785 | 385 | 74 | 14 | 16 | - | 1,274 |
Tax on net operating income | (212) | (2,086) | (189) | (208) | 23 | - | (2,672) |
Adjusted net operating income | 1,608 | 2,726 | 602 | 438 | (123) | - | 5,251 |
Net cost of net debt | (377) | ||||||
Non-controlling interests | (105) | ||||||
Adjusted net income - TotalEnergies share | 4,769 |
3rd quarter 2021 | Integrated Gas, | Exploration | Refining | Marketing | |||
Renewables | & | & | & | Corporate | Intercompany | Total | |
(M$) | & Power | Production | Chemicals | Services | |||
Total expenditures | 683 | 1,754 | 337 | 239 | 14 | 3,027 | |
Total divestments | 358 | 163 | 17 | 31 | 2 | 571 | |
Cash flow from operating activities | (463) | 4,814 | 799 | 845 | (355) | 5,640 |
37
3.2) Reconciliation of the information by business segment with consolidated financial statements
Consolidated | ||||||||||||
9 months 2022 | statement of | |||||||||||
(M$) | Adjusted | Adjustments(a) | income | |||||||||
Sales | 212,382 | 35 | 212,417 | |||||||||
Excise taxes | (13,060 | ) | - | (13,060 | ) | |||||||
Revenues from sales | 199,322 | 35 | 199,357 | |||||||||
Purchases net of inventory variation | (128,294 | ) | 401 | (127,893 | ) | |||||||
Other operating expenses | (21,718 | ) | (717 | ) | (22,435 | ) | ||||||
Exploration costs | (324 | ) | (725 | ) | (1,049 | ) | ||||||
Depreciation, depletion and impairment of tangible assets and mineral interests | (9,112 | ) | (604 | ) | (9,716 | ) | ||||||
Other income | 713 | 1,552 | 2,265 | |||||||||
Other expense | (951 | ) | (3,565 | ) | (4,516 | ) | ||||||
Financial interest on debt | (1,667 | ) | - | (1,667 | ) | |||||||
Financial income and expense from cash & cash equivalents | 408 | 378 | 786 | |||||||||
Cost of net debt | (1,259 | ) | 378 | (881 | ) | |||||||
Other financial income | 546 | 84 | 630 | |||||||||
Other financial expense | (383 | ) | - | (383 | ) | |||||||
Net income (loss) from equity affiliates | 6,381 | (7,992 | ) | (1,611 | ) | |||||||
Income taxes | (16,035 | ) | (130 | ) | (16,165 | ) | ||||||
Consolidated net income | 28,886 | (11,283 | ) | 17,603 | ||||||||
TotalEnergies share | 28,636 | (11,374 | ) | 17,262 | ||||||||
Non-controlling interests | 250 | 91 | 341 |
(a) Adjustments include special items, inventory valuation effect and the effect of changes in fair value.
Consolidated | ||||||||||||
9 months 2021 | statement of | |||||||||||
(M$) | Adjusted | Adjustments(a) | income | |||||||||
Sales | 145,559 | (44 | ) | 145,515 | ||||||||
Excise taxes | (16,179 | ) | - | (16,179 | ) | |||||||
Revenues from sales | 129,380 | (44 | ) | 129,336 | ||||||||
Purchases net of inventory variation | (83,971 | ) | 1,510 | (82,461 | ) | |||||||
Other operating expenses | (20,124 | ) | (90 | ) | (20,214 | ) | ||||||
Exploration costs | (417 | ) | - | (417 | ) | |||||||
Depreciation, depletion and impairment of tangible assets and mineral interests | (9,457 | ) | (180 | ) | (9,637 | ) | ||||||
Other income | 749 | 27 | 776 | |||||||||
Other expense | (451 | ) | (1,111 | ) | (1,562 | ) | ||||||
Financial interest on debt | (1,421 | ) | - | (1,421 | ) | |||||||
Financial income and expense from cash & cash equivalents | 235 | 24 | 259 | |||||||||
Cost of net debt | (1,186 | ) | 24 | (1,162 | ) | |||||||
Other financial income | 567 | - | 567 | |||||||||
Other financial expense | (401 | ) | - | (401 | ) | |||||||
Net income (loss) from equity affiliates | 2,403 | (825 | ) | 1,578 | ||||||||
Income taxes | (5,605 | ) | (335 | ) | (5,940 | ) | ||||||
Consolidated net income | 11,487 | (1,024 | ) | 10,463 | ||||||||
TotalEnergies share | 11,235 | (1,040 | ) | 10,195 | ||||||||
Non-controlling interests | 252 | 16 | 268 |
(a) Adjustments include special items, inventory valuation effect and the effect of changes in fair value.
38
Consolidated | ||||||||||||
3rd quarter 2022 | statement | |||||||||||
(M$) | Adjusted | Adjustments(a) | of income | |||||||||
Sales | 68,999 | 38 | 69,037 | |||||||||
Excise taxes | (4,075 | ) | - | (4,075 | ) | |||||||
Revenues from sales | 64,924 | 38 | 64,962 | |||||||||
Purchases net of inventory variation | (41,509 | ) | (1,293 | ) | (42,802 | ) | ||||||
Other operating expenses | (6,689 | ) | (82 | ) | (6,771 | ) | ||||||
Exploration costs | (71 | ) | - | (71 | ) | |||||||
Depreciation, depletion and impairment of tangible assets and mineral interests | (2,926 | ) | (9 | ) | (2,935 | ) | ||||||
Other income | 163 | 1,530 | 1,693 | |||||||||
Other expense | (153 | ) | (768 | ) | (921 | ) | ||||||
Financial interest on debt | (633 | ) | - | (633 | ) | |||||||
Financial income and expense from cash & cash equivalents | 219 | 108 | 327 | |||||||||
Cost of net debt | (414 | ) | 108 | (306 | ) | |||||||
Other financial income | 196 | - | 196 | |||||||||
Other financial expense | (112 | ) | - | (112 | ) | |||||||
Net income (loss) from equity affiliates | 2,576 | (2,684 | ) | (108 | ) | |||||||
Income taxes | (6,037 | ) | (40 | ) | (6,077 | ) | ||||||
Consolidated net income | 9,948 | (3,200 | ) | 6,748 | ||||||||
TotalEnergies share | 9,863 | (3,237 | ) | 6,626 | ||||||||
Non-controlling interests | 85 | 37 | 122 |
(a) Adjustments include special items, inventory valuation effect and the effect of changes in fair value.
Consolidated | ||||||||||||
3rd quarter 2021 | statement | |||||||||||
(M$) | Adjusted | Adjustments(a) | of income | |||||||||
Sales | 54,729 | - | 54,729 | |||||||||
Excise taxes | (5,659 | ) | - | (5,659 | ) | |||||||
Revenues from sales | 49,070 | - | 49,070 | |||||||||
Purchases net of inventory variation | (32,574 | ) | 230 | (32,344 | ) | |||||||
Other operating expenses | (6,548 | ) | (69 | ) | (6,617 | ) | ||||||
Exploration costs | (127 | ) | - | (127 | ) | |||||||
Depreciation, depletion and impairment of tangible assets and mineral interests | (3,172 | ) | (19 | ) | (3,191 | ) | ||||||
Other income | 195 | - | 195 | |||||||||
Other expense | (117 | ) | (488 | ) | (605 | ) | ||||||
Financial interest on debt | (454 | ) | - | (454 | ) | |||||||
Financial income and expense from cash & cash equivalents | 79 | 8 | 87 | |||||||||
Cost of net debt | (375 | ) | 8 | (367 | ) | |||||||
Other financial income | 193 | - | 193 | |||||||||
Other financial expense | (140 | ) | - | (140 | ) | |||||||
Net income (loss) from equity affiliates | 1,143 | 234 | 1,377 | |||||||||
Income taxes | (2,674 | ) | (18 | ) | (2,692 | ) | ||||||
Consolidated net income | 4,874 | (122 | ) | 4,752 | ||||||||
TotalEnergies share | 4,769 | (124 | ) | 4,645 | ||||||||
Non-controlling interests | 105 | 2 | 107 |
(a) Adjustments include special items, inventory valuation effect and the effect of changes in fair value.
39
3.3) Adjustment items
The main adjustment items of the period are the following exceptional impairments and provisions related to the Russian-Ukrainian conflict:
· | In the first quarter, an impairment of $(4,095) million in net result concerning notably Arctic LNG 2. | |
· | In the second quarter, an impairment of $(3,513) million in net result related to the potential impact of international sanctions on the value of Novatek stake and in the third quarter, an additional impairment of $(3,056) million in net income. |
The adjustment items also include a $1,391 million gain on the partial disposal of TotalEnergies' interest in its subsidiary which owns 50.5% of Sunpower and on the revaluation of its retained interest which is accounted for using the equity method.
The detail of the adjustment items is presented in the table below.
ADJUSTMENTS TO OPERATING INCOME | |||||||||||
(M$) |
Integrated Gas, Renewables & Power |
Exploration & Production |
Refining & Chemicals |
Marketing & Services |
Corporate | Total | |||||
3rd quarter 2022 | Inventory valuation effect | - | - | (771) | (239) | - | (1,010) | ||||
Effect of changes in fair value | (241) | - | - | - | - | (241) | |||||
Restructuring charges | (8) | - | - | - | - | (8) | |||||
Asset impairment and provisions charges | - | (7) | - | 7 | - | - | |||||
Other items | (4) | (4) | - | - | (79) | (87) | |||||
Total | (253) | (11) | (771) | (232) | (79) | (1,346) | |||||
3rd quarter 2021 | Inventory valuation effect | - | - | 309 | 56 | - | 365 | ||||
Effect of changes in fair value | (122) | - | - | - | - | (122) | |||||
Restructuring charges | (3) | (36) | (8) | - | - | (47) | |||||
Asset impairment and provisions charges | (7) | - | (12) | - | - | (19) | |||||
Other items | (27) | 4 | - | (12) | - | (35) | |||||
Total | (159) | (32) | 289 | 44 | - | 142 | |||||
9 months 2022 | Inventory valuation effect | - | - | 951 | 445 | - | 1,396 | ||||
Effect of changes in fair value | (926) | - | - | - | - | (926) | |||||
Restructuring charges | (30) | - | - | - | - | (30) | |||||
Asset impairment and provisions charges | (18) | (1,337) | - | (58) | (9) | (1,422) | |||||
Other items | (19) | (86) | - | (11) | (512) | (628) | |||||
Total | (993) | (1,423) | 951 | 376 | (521) | (1,610) | |||||
9 months 2021 | Inventory valuation effect | - | - | 1,449 | 262 | - | 1,711 | ||||
Effect of changes in fair value | (180) | - | - | - | - | (180) | |||||
Restructuring charges | (13) | (36) | (16) | - | - | (65) | |||||
Asset impairment and provisions charges | (155) | - | (25) | - | - | (180) | |||||
Other items | (65) | (19) | (1) | (5) | - | (90) | |||||
Total | (413) | (55) | 1,407 | 257 | - | 1,196 |
40
ADJUSTMENTS TO NET INCOME, TotalEnergies SHARE | |||||||||||||
(M$) |
Integrated Gas, Renewables & Power |
Exploration & Production |
Refining & Chemicals |
Marketing & Services |
Corporate | Total | |||||||
3rd quarter 2022 | Inventory valuation effect | - | - | (671) | (156) | - | (827) | ||||||
Effect of changes in fair value | (224) | - | - | - | - | (224) | |||||||
Restructuring charges | (17) | - | - | - | - | (17) | |||||||
Asset impairment and provisions charges | (149) | (2,969) | - | - | - | (3,118) | |||||||
Gains (losses) on disposals of assets | 1,391 | - | - | - | - | 1,391 | |||||||
Other items | 11 | (438) | - | - | (15) | (442) | |||||||
Total | 1,012 | (3,407) | (671) | (156) | (15) | (3,237) | |||||||
- | |||||||||||||
3rd quarter 2021 | Inventory valuation effect | - | - | 282 | 38 | - | 320 | ||||||
Effect of changes in fair value | (119) | - | - | - | - | (119) | |||||||
Restructuring charges | (2) | 2 | (46) | 1 | 2 | (43) | |||||||
Asset impairment and provisions charges | (5) | - | (29) | (13) | - | (47) | |||||||
Gains (losses) on disposals of assets | - | (177) | - | - | - | (177) | |||||||
Other items | (28) | (19) | - | (11) | - | (58) | |||||||
Total | (154) | (194) | 207 | 15 | 2 | (124) | |||||||
9 months 2022 | Inventory valuation effect | - | - | 902 | 304 | - | 1,206 | ||||||
Effect of changes in fair value | (855) | - | - | - | - | (855) | |||||||
Restructuring charges | (28) | - | - | - | - | (28) | |||||||
Asset impairment and provisions charges | (4,323) | (7,494) | - | (72) | (9) | (11,898) | |||||||
Gains (losses) on disposals of assets | 1,391 | - | - | - | - | 1,391 | |||||||
Other items | (341) | (710) | (32) | (8) | (99) | (1,190) | |||||||
Total | (4,156) | (8,204) | 870 | 224 | (108) | (11,374) | |||||||
- | |||||||||||||
9 months 2021 | Inventory valuation effect | - | - | 1,208 | 176 | - | 1,384 | ||||||
Effect of changes in fair value | (169) | - | - | - | - | (169) | |||||||
Restructuring charges | (14) | (83) | (117) | (42) | (58) | (314) | |||||||
Asset impairment and provisions charges | (185) | - | (42) | (13) | - | (240) | |||||||
Gains (losses) on disposals of assets | - | (1,556)* | - | - | - | (1,556) | |||||||
Other items | (70) | (60) | (9) | (6) | - | (145) | |||||||
Total | (438) | (1,699) | 1,040 | 115 | (58) | (1,040) |
*Of which $1,379 million related to the impact of the TotalEnergies' interest sale of Petrocedeño to PDVSA.
41
4) Shareholders’ equity
Treasury shares (TotalEnergies shares held directly by TotalEnergies SE)
December 31, 2021 | September 30, 2022 | |
Number of treasury shares | 33,841,104 | 94,357,781 |
Percentage of share capital | 1.28% | 3.60% |
Of which shares acquired with the intention to cancel them | 30,665,526 | 94,177,672 |
Of which shares allocated to TotalEnergies share performance plans for Company employees | 3,103,018 | 91,335 |
Of which shares intended to be allocated to new share performance or purchase options plans | 72,560 | 88,774 |
Dividend
The Board of Directors of April 27, 2022 decided to increase interim dividends by 5% and consequently set the first interim dividend for the fiscal year 2022 at €0.69 per share. The ex-dividend date of this intermin dividend was September 21, 2022 and it was paid in cash on October 3, 2022.
Moreover, the Board of Directors of July 27, 2022 decided to set the amount of the second interim dividend for the 2022 fiscal year at 0.69 euro per share, i.e an amount equal to the aforementioned first interim dividend. The ex-dividend date of the second interim dividend will be January 2, 2023 and it will be paid in cash on January 12, 2023.
Furthermore, the Board of Directors of October 26, 2022 decided to set the amount of the third interim dividend for the 2022 fiscal year at 0.69 euro per share, i.e an amount equal to the first and second interim dividends for the same fiscal year. The ex-dividend date of the third interim dividend will be March 22, 2023 and it will be paid in cash on April 3, 2023.
Dividend 2022 | First interim | Second interim | Third interim |
Amount per share | €0.69 | €0.69 | €0.69 |
Set date | April 27, 2022 | July 27, 2022 | October 26, 2022 |
Ex-dividend date | September 21, 2022 | January 2, 2023 | March 22, 2023 |
Payment date | October 3, 2022 | January 12, 2023 | April 3, 2023 |
Finally, following its decisions of September 28, 2022, the Board of Directors of October 26, 2022 confirmed the distribution of a special interim dividend of €1 per share. The ex-dividend date of the special interim dividend will be December 6, 2022 and it will be paid in cash on December 16, 2022.
Special interim dividend | |
Amount per share | €1 |
Ex-dividend date | December 6, 2022 |
Payment date | December 16, 2022 |
Earnings per share in Euro
Earnings per share in Euro, calculated from the earnings per share in U.S. dollars converted at the average Euro/USD exchange rate for the period, amounted to €2.52 per share for the 3rd quarter 2022 (€2.03 per share for the 2nd quarter 2022 and €1.46 per share for the 3rd quarter 2021). Diluted earnings per share calculated using the same method amounted to €2.50 per share for the 3rd quarter 2022 (€2.03 per share for the 2nd quarter 2022 and €1.44 per share for the 3rd quarter 2021).
Earnings per share are calculated after remuneration of perpetual subordinated notes.
42
Perpetual subordinated notes
On January 17, 2022, TotalEnergies SE issued perpetual subordinated notes:
- | Perpetual subordinated notes 2.000% callable in April 2027, or in anticipation in January 2027 (€1,000 million); and |
- | Perpetual subordinated notes 3.250% callable in January 2037, or in anticipation in July 2036 (€750 million). |
On May 18, 2022, TotalEnergies SE fully reimbursed the residual nominal amount of €1,750 million of its perpetual subordinated notes 3.875% issued in May 2016, on their first call date.
43
Other comprehensive income
Detail of other comprehensive income is presented in the table below:
(M$) | 9 months 2022 | 9 months 2021 | |||
Actuarial gains and losses | 187 | 446 | |||
Change in fair value of investments in equity instruments | 114 | (27) | |||
Tax effect | (40) | (149) | |||
Currency translation adjustment generated by the parent company | (11,776) | (5,302) | |||
Sub-total items not potentially reclassifiable to profit and loss | (11,515) | (5,032) | |||
Currency translation adjustment | 5,406 | 3,037 | |||
- unrealized gain/(loss) of the period | 5,499 | 3,198 | |||
- less gain/(loss) included in net income | 93 | 161 | |||
Cash flow hedge | 4,217 | 504 | |||
- unrealized gain/(loss) of the period | 4,801 | 337 | |||
- less gain/(loss) included in net income | 584 | (167) | |||
Variation of foreign currency basis spread | 79 | (2) | |||
- unrealized gain/(loss) of the period | 49 | (39) | |||
- less gain/(loss) included in net income | (30) | (37) | |||
Share of other comprehensive income of equity affiliates, net amount |
2,655 | 635 | |||
- unrealized gain/(loss) of the period | 2,609 | 634 | |||
- less gain/(loss) included in net income | (46) | (1) | |||
Other | (19) | 1 | |||
Tax effect | (1,483) | (157) | |||
Sub-total items potentially reclassifiable to profit and loss | 10,855 | 4,018 | |||
Total other comprehensive income (net amount) | (660) | (1,014) |
44
Tax effects relating to each component of other comprehensive income are as follows:
9 months 2022 | 9 months 2021 | |||||
(M$) | Pre-tax amount |
Tax effect | Net amount | Pre-tax amount |
Tax effect | Net amount |
Actuarial gains and losses | 187 | (49) | 138 | 446 | (141) | 305 |
Change in fair value of investments in equity instruments | 114 | 9 | 123 | (27) | (8) | (35) |
Currency translation adjustment generated by the parent company | (11,776) | - | (11,776) | (5,302) | - | (5,302) |
Sub-total items not potentially reclassifiable to profit and loss | (11,475) | (40) | (11,515) | (4,883) | (149) | (5,032) |
Currency translation adjustment | 5,406 | - | 5,406 | 3,037 | - | 3,037 |
Cash flow hedge | 4,217 | (1,463) | 2,754 | 504 | (155) | 349 |
Variation of foreign currency basis spread | 79 | (20) | 59 | (2) | (2) | (4) |
Share of other comprehensive income of equity affiliates, net amount | 2,655 | - | 2,655 | 635 | - | 635 |
Other | (19) | - | (19) | 1 | - | 1 |
Sub-total items potentially reclassifiable to profit and loss | 12,338 | (1,483) | 10,855 | 4,175 | (157) | 4,018 |
Total other comprehensive income | 863 | (1,523) | (660) | (708) | (306) | (1,014) |
5) Financial debt
The Company has not issued any new senior bond during the first nine months of 2022.
The Company reimbursed four senior bonds during the first nine months of 2022:
- | Bond 2.875% issued by TotalEnergies Capital International in 2012 and maturing in February 2022 ($1,000 million) |
- | Bond 1.125% issued by TotalEnergies Capital Canada in 2014 and maturing in March 2022 (€1,000 million) |
- | Bond 2.250% issued by TotalEnergies Capital International in 2015 and maturing in June 2022 (£400 million) |
- | Bond 3.125% issued by TotalEnergies Capital in 2010 and maturing in September 2022 (€500 million). |
On March 4, 2022, the Company put in place a committed syndicated credit line with banks for an amount of $8,000 million and with a 12-month tenor (with the option to extend its maturity twice by a further 6 months at TotalEnergies SE’ hand).
6) Related parties
The related parties are mainly equity affiliates and non-consolidated investments.
There were no major changes concerning transactions with related parties during the first nine months of 2022.
The impact of the Russian-Ukrainian conflict on transactions with related parties in Russia is described in paragraph 7 Other risks and commitments.
45
7) Other risks and contingent liabilities
TotalEnergies 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 TotalEnergies, other than those mentioned below.
Yemen
In Yemen, the deterioration of security conditions in the vicinity of the Balhaf site caused the company Yemen LNG, in which TotalEnergies holds a stake of 39.62%, to stop its commercial production and export of LNG and to declare force majeure to its various stakeholders in 2015. The plant has been put in preservation mode.
Mozambique
Considering the evolution of the security situation in the north of the Cabo Delgado province in Mozambique, TotalEnergies has confirmed on April 26, 2021, the withdrawal of all Mozambique LNG project personnel from the Afungi site. This situation led TotalEnergies, as operator of Mozambique LNG project, to declare force majeure.
Russian-Ukrainian conflict
Since the month of February 2022, Russia's invasion of Ukraine led European and American authorities to adopt several sets of sanctions measures targeting Russian and Belarusian persons and entities, as well as the financial sector.
TotalEnergies holds investments in this country in major LNG projects (Yamal LNG and Arctic LNG 2) both directly and through its holding in the company PAO Novatek, whose production and sale of LNG are not materially impacted by the sanctions adopted as of the date hereof.
Depending on the developments of the Russian-Ukrainian conflict and the measures that the European and American authorities could be required to take, the activities of TotalEnergies in Russia could be affected in the future.
TotalEnergies announced on March 1, 2022, that it condemned Russia's military aggression against Ukraine, and that sanctions that will be implemented by the Company regardless of the consequences on its asset management.
On March 22, 2022, TotalEnergies announced that, given the uncertainty created by the technological and financial sanctions on the ability to carry out the Arctic LNG 2 project currently under construction and their probable tightening with the worsening conflict, TotalEnergies SE had decided to no longer book proved reserves for the Arctic LNG 2 project.
Since then, on April 8,2022, new sanctions have effectively been adopted by the European authorities, notably prohibiting export from European Union countries of goods and technology for use in the liquefaction of natural gas benefitting a Russian company. It appears that these new prohibitions constitute additional risks on the execution of the Arctic LNG 2 project.
As a result, TotalEnergies recorded, in its accounts as of March 31, 2022, an impairment of $(4,095) million, concerning notably Arctic LNG 2.
The potential impact of international sanctions on the value of TotalEnergies’ stake in Novatek led the Company to identify indications of impairment. The impairment tests performed as of June 30, 2022 and then as of September 30, 2022 in order to determine the value in use based on future cash flows, taking into account assumptions reflecting the impact of sanctions on future cash flows, led TotalEnergies to record an impairment charge of $(3,513) million as of June 30, 2022 and an additional impairment charge of $(3,056) million as of September 30, 2022.
On July 18, 2022, TotalEnergies agreed to sell to Novatek TotalEnergies' 49% interest in Terneftegaz, which operates the Termokarstovoye gas and condensates field in Russia, on economic terms enabling TotalEnergies to recover the outstanding amounts invested in the field. This transfer was finalized on September 15, 2022.
46
The table below presents the contribution of Russian assets to the key income and cash flow indicators:
Russian Upstream Assets (M$) | 3rd quarter 2022 | 2nd quarter 2022 | 9 months 2022 | 2021 |
Net income (TotalEnergies share) | (1,907) | (3,202) | (8,113) | 1,995 |
Cash flow from operations | 349 | 368 | 748 | 1,163 |
Capital Employed1 by TotalEnergies in Russia as of September 30, 2022 was $6,110 million after taking into account the $(3,056) million impairment in the third quarter 2022.
8) Subsequent events
There are no post-balance sheet events that could have a material impact on the Company’s financial statements.
1 Capital Employed consists of non-current assets and working capital, at replacement cost, net of deferred income taxes and non-current liabilities.
47
EXHIBIT 99.2
RECENT DEVELOPMENTS
The term “TotalEnergies” in this exhibit is used to designate TotalEnergies SE and the consolidated entities that are directly or indirectly controlled by TotalEnergies SE. The entities in which TotalEnergies SE directly or indirectly owns a shareholding are separate and independent legal entities.
Third 2022 interim dividend of €0.69/share, an increase of 5% compared to 2021, and announcement of the ex-dividend and payment dates of the special interim dividend of €1/share
The Board of Directors of TotalEnergies SE, meeting on October 26, 2022 under the chairmanship of Mr. Patrick Pouyanné, Chairman and Chief Executive Officer, declared the distribution of the third 2022 interim dividend at €0.69/share, equal to the first and second 2022 interim dividends and an increase of 5% from the interim and the final dividends paid for the 2021 financial year and sets the ex-dividend interim at €1/share. This increase is in line with the shareholder return policy for the financial year 2022 as announced during the investor day on September 28.
These interim dividends will be paid in cash exclusively, according to the following timetable:
Ex-dividend date | Payment date | |
Special interim dividend | ||
Shareholders | December 6, 2022 | December 16, 2022 |
ADS holders | December 2, 2022 | December 28, 2022 |
Third 2022 interim dividend | ||
Shareholders | March 22, 2023 | April 3, 2023 |
ADS holders | March 20, 2023 | April 14, 2023 |
Brazil: TotalEnergies partners with Casa dos Ventos with the aim of jointly developing a 12 GW renewable energy portfolio
On October 26, 2022, TotalEnergies and Casa dos Ventos (CDV), Brazil's leading renewable energy developer, announced the creation of a 34%( TotalEnergies)/66%(CDV) joint venture with the aim of jointly developing, building and operating the renewable portfolio of Casa Dos Ventos.
This portfolio includes 700 MW of onshore wind capacity in operation, 1 GW of onshore wind under construction, 2.8 GW of onshore wind, and 1.6 GW of solar projects under development.
The newly formed joint venture is expected to have the right to acquire the current and new projects that are or will be developed by CDV as they reach the execution stage. The joint venture will thus be able to jointly foster its growth by accessing an additional portfolio of at least 6 GW, that CDV is expected to continue to expand.
TotalEnergies is expected to pay a cash consideration of $550 million (R$ 2,920 million) and up to $30 million (R$ 159 million) in earn-out to complete the acquisition. In addition, TotalEnergies will have the option to acquire an additional 15% equity share in the joint venture after 5 years.
TotalEnergies is expected to support the joint venture accelerating its growth due to its global presence in the Corporate PPA market, its purchasing power resulting from its worldwide size, its trading expertise well suited to the Brazilian merchant market and its strong balance sheet, allowing the joint venture to improve its financing cost. CDV, which has developed approximately 25% of the onshore wind assets in operation today in Brazil, aims to bring to the joint venture its knowledge of the Brazilian market and a very high-quality portfolio while shifting from a developer to a producer business model.
TotalEnergies reaches 500 MW of onsite B2B Solar Distributed Generation for the self-consumption of its Customers Worldwide
On October 25, 2022, TotalEnergies announced it reached the milestone of 500 MW of onsite business to business (B2B) solar distributed generation in operation. More than 300 sites of its industrial and commercial customers have been equipped with solar panels in Asia, the Middle East, Europe and the United States.
TotalEnergies sells to its B2B customers green electricity produced directly on their sites through long-term onsite Power Purchase Agreements (PPAs). It develops, finances, builds, and operates the solar installations on these roofs, carports, as well as on available industrial land.
These solar solutions may enable companies to produce clean energy directly at their sites and may benefit from savings on their current cost of electricity, as well as potentially enable them to reduce their carbon footprints.
Qatar: TotalEnergies announces the startup of Al Kharsaah (800 megawatts peak (MWp)), one of the largest solar power plants in the Middle East
On October 18, 2022, the Al Kharsaah solar power plant developed by TotalEnergies and its partners QatarEnergy and Marubeni was inaugurated by His Highness Sheikh Tamim bin Hamad Al Thani.
The ceremony marked the completion of the construction works and the startup of the plant, which is connected to the national grid.
Located 80 km West of Doha, the Al Kharsaah plant is one of the first large scale photovoltaic plant in Qatar with 800 MWp installed solar capacity. The plant was constructed on a 1,000-hectare terrain, equivalent to approximately 1,400 football pitches, and integrates 2 million high-efficiency bifacial modules mounted on single-axis trackers. These panels, equipped with photovoltaic cells on the front and back, capture the sun's direct rays on one side, and capture the rays reflected on the ground thanks to the other side, thus aiming to optimize electricity production.
Al Kharsaah is expected to supply 10% of the country's peak power consumption and is expected to avoid 26 million tons of CO2 emissions during its lifetime.
The power plant has been developed and is operated by Siraj 1, which is jointly owned 40% by the Consortium formed by TotalEnergies (49%) and Marubeni (51%) and 60% by QatarEnergy Renewable Solutions. The project includes a 25-year Power Purchase Agreement between Siraj 1 and the power grid operator Kahramaa.
The inauguration of the Al Kharsaah plant follows the recent selection of TotalEnergies as QatarEnergy's first international partner for the North Field East (NFE) and North Field South (NFS) liquefied natural gas (LNG) projects.
Duty of Vigilance: TotalEnergies Regrets NGOs' Refusal of the Mediation Process Proposed by the Paris Civil Court
On October 12, 2022, in connection with the hearings scheduled before the Paris Civil court, TotalEnergies regrets that the NGOs involved in the proceedings have refused to participate in the mediation process proposed by the court and accepted by TotalEnergies. Following this refusal, the court decided that the pleadings would take place on December 7, 2022.
In October 2019, some NGOs brought proceedings against TotalEnergies SE in the Nanterre Civil court based on France's "duty of vigilance" law, claiming that the Company had insufficiently identified and managed the social and environmental impacts of the Tilenga and EACOP projects in Uganda and Tanzania. France's "duty of vigilance" law, which came into effect in 2017, requires companies of a certain size to publish in their management report a vigilance plan on the reasonable measures taken to identify risks and prevent potential serious violations of human rights and fundamental freedoms, human and environmental health and safety, not only in relation to the company's own activities but also those of its subcontractors and suppliers with whom it has an established commercial relationship.
The mediation process proposed by the court and accepted by TotalEnergies could have provided an opportunity to initiate a constructive dialogue with the NGOs that brought the proceedings, similar to the dialogue that TotalEnergies affiliates in Uganda and Tanzania have maintained with the majority of local associations since the projects began.
TotalEnergies regrets this refusal by the NGOs party to the proceedings and now intends to argue before the court that its vigilance plan has been implemented effectively and that it has properly checked that its Ugandan and Tanzanian affiliates have applied the appropriate action plans to respect the rights of local communities and ensure respect for biodiversity, within the framework of National Interest Projects decided by the governments of Uganda and Tanzania.
In this respect, the TotalEnergies affiliates involved in the projects commissioned third-party experts to monitor the situations of the people affected by the project. Their feedback is the following:
Payment of compensation:
· | The Tilenga project in Uganda concerns 4,929 households: |
o | 92% of compensation agreements have been signed, | |
o | 88% of compensation has been paid. |
· | The EACOP project in Uganda concerns 3,648 households: |
o | 74% of compensation agreements have been signed. | |
o | Almost 60% of people have received their compensation. |
· | The EACOP project in Tanzania, where the process began later, concerns 9,510 households: | |
· | 67% have signed the compensation agreement, | |
· | 15% have received their compensation to date. |
In cases where payment has not been received, the members of the households concerned continue to access and enjoy full disposal of their homes and the land, which belongs to them or which they farm.
Households whose main residence is affected:
· | For the two projects, 723 households, numbering some 5,000 people, will be relocated. | |
· | All the households concerned continue to live on their land and to farm it until they have received the full amount of their compensation, at which time they will be relocated. |
Societal measures implemented:
· | In addition to the compensation agreed, additional measures will be implemented with the aim of promoting employment, education, and women’s rights. | |
· | Along with the other aspects of the project, TotalEnergies adheres strictly to local regulations and international standards (IFC). |
Households in the field:
· | The people concerned by the projects are expected to be monitored for at least three years. An annual survey of the people concerned by the Tilenga project who have received cash compensation, carried out by a third party, showed that: |
o | 70% of respondents said that their life had improved since receiving their compensation, | |
o | and 28% said that their life was unchanged. |
The preservation of biodiversity:
· | Within the framework of these two projects, and in line with its biodiversity commitments, TotalEnergies SE has undertaken to implement action plans designed to achieve a net positive impact on biodiversity. |
· | For the Tilenga project, for example: |
o | The footprint of the facilities in the Murchison Falls National Park has been minimized to less than 0,03% of its surface. |
o | 1,000 hectares of forest are expected to be restored to allow chimpanzees to move freely, |
o | 10,000 hectares of forest are expected to be preserved, | |
o | a program is being designed that aims to increase the population of lions and elephants in Murchison Falls National Park by 25%, | |
o | a project is being designed with the aim of reintroducing iconic species, such as the black rhinoceros. |
Decarbonizing Heavy Industry: TotalEnergies and Holcim Join Forces to Study Solutions for a Carbon-Free Cement Plant in Belgium
On October 4, 2022, TotalEnergies and Holcim in Belgium signed a Memorandum of Understanding (MoU) to work together on the full decarbonization of a cement production facility being upgraded by Holcim in Obourg, Belgium. Various energies and technologies are expected to be assessed for the efficient carbon capture, utilization, and sequestration (CCUS) of approximately 1.3 million metric tons of CO2 emitted by the facility every year.
Each partner is expected to contribute its best-in-class technologies and its know-how to explore and develop the project.
TotalEnergies is expected to assess the development of renewable projects to power a new electrolyzer, which would generate the green hydrogen needed to produce e-fuels. This new renewable energy production capacity could also power Holcim’s new oxyfuel kiln, thus contributing to the decarbonization of the cement plant. Finally, the oxygen emitted by the electrolyzer is expected to be used to fuel the new kiln.
Grandpuits Zero-Crude Platform: TotalEnergies and SARIA Join Forces to Produce Sustainable Aviation Fuels
On September 26, 2022, TotalEnergies and SARIA, a prominent player on the European market for the collection and valorization of organic materials into sustainable products, have concluded an agreement to develop sustainable aviation fuel (SAF) production on the Grandpuits (Seine-et-Marne) zero-crude platform.
This agreement is a step in securing feedstock supply (used cooking oils and animal fats) eligible to produce SAF and is expected to enable the SAF production capacity to reach approximately 210,000 tons per year, 25% higher than the estimation foreseen in the initial project announced in 2020.
Under this agreement, TotalEnergies will take 50% of a production activity of SARIA, that will supply animal fat esters to Grandpuits. Pursuant to this same agreement, SARIA will take an equivalent stake in the biofuels business of the Grandpuits biorefinery, which will remain operated by TotalEnergies. SARIA will also directly supply used cooking oils.
The project is subject to the legal process for notifying and consulting TotalEnergies’ employee representatives and the approval of the competent authorities.
Qatar: TotalEnergies Selected as QatarEnergy’s First Partner in the North Field South LNG project
On September 24, 2022, following its selection as the first partner for the expected 32 million ton per annum (Mtpa) North Field East (NFE) liquefied natural gas (LNG) project, TotalEnergies has been selected as the first international partner in the 16 Mtpa North Field South (NFS) LNG project. Pursuant to the agreement, TotalEnergies will obtain a 9.375% participating interest in the NFS project – out of a total 25% interest available for international partners – while the national company QatarEnergy will hold the remaining 75%.
Through its combined participating interests in NFE (6.25%) and NFS, TotalEnergies is expected to add approximately 3.5 Mtpa of LNG production to its worldwide LNG portfolio by 2028.
Together, NFE and NFS form the North Field Expansion project with the aim of increasing LNG production from the North Field, adding approximately 48 Mtpa to Qatar’s export capacity and bringing it to approximately 126 Mtpa by 2028. NFS is expected to benefit from synergies with NFE, expecting to be a cost-competitive LNG project.
Just like NFE, NFS intends to apply standards to reduce the intensity of its GHG emissions. Native CO2 from natural gas production would be captured and sequestered, and the plant is expected to be connected to Qatar’s electrical grid, which ought to supply it with a portion of renewable electricity - in line with Qatar’s climate ambitions – thanks to the 800 MWp Al Kharsaah solar power plant project in partnership with TotalEnergies as well as QatarEnergy’s new solar power plant, currently under construction in Ras Laffan with TotalEnergies’ support.
Argentina: Launch of the Fenix Offshore Gas Project
On September 19, 2022, TotalEnergies announced the approval of the final investment decision for the Fenix gas development, located 60 km off the coast of Tierra del Fuego in southern Argentina.
Through its Total Austral affiliate, TotalEnergies operates the project with a 37.5% interest, in partnership with WintershallDea (37.5%) and Pan American Sur (25%).
The Fenix field will be developed through three horizontal wells, drilled from a new unmanned platform in 70 meters water depth. The gas is expected to be transported through a 35 km pipeline to the TotalEnergies-operated Véga Pleyade platform and treated onshore at the Rio Cullen and Cañadon Alfa plants, also operated by the Company. At production start-up, expected early 2025, Fenix is expected to produce 10 million cubic meters per day of natural gas (70,000 barrels of oil equivalent per day). This development represents an investment of approximately $706 million.
On April 18, 2022, the national authorities granted the CMA-1 concession, including Fenix, an extension for 10 years until April 30, 2041. As a new gas project in Tierra del Fuego, the national authorities also granted Fenix the benefits provided for under Law 19640’s special tax regime.
Oman: TotalEnergies signs Exploration and Production Sharing Agreement for onshore Block 11
On September 16, 2022, TotalEnergies announced that it signed, along with its partners, an Exploration and Production Sharing Agreement (EPSA) with the Ministry of Energy and Minerals (MEM) of the Sultanate of Oman in the onshore Block 11. The first stage of the EPSA activities is expected to see seismic acquisition in late 2022, with a first exploration well planned to be drilled in 2023.
TotalEnergies will hold a 22.5% interest in the block, OQ 10% and Shell with 67.5% will be the operator. Block 11 is expected to contain undeveloped discoveries and exploration potential.
Iraq: TotalEnergies sells its non-operated interest in the Sarsang oil field
On September 15, 2022, TotalEnergies announced the completion of the divestment of its 18% interest in the onshore Sarsang oil field in the Kurdistan region of Iraq, to ShaMaran Petroleum Corp., a company listed in Canada and Sweden and focused on oil exploration and development in Kurdistan, for a firm consideration of $155 million. An additional contingent consideration of $15 million is payable in the future depending on production and oil prices.
The Sarsang field, discovered in 2011, is operated by HKN Energy Ltd (62%), with the Kurdistan Regional Government (KRG) owning a 20% interest. TotalEnergies' share of production was around 3,500 barrels per day in 2021.
Research: TotalEnergies and the Technical University of Denmark create a center of excellence in decarbonized energies
On September 13, 2022, TotalEnergies announced that during a trip to Denmark, Patrick Pouyanné , Chairman and CEO, signed an agreement with the President of the Technical University of Denmark (DTU) for the creation of the DTU-TotalEnergies Excellence Center of Clean Energy. This advanced research center aims to focus on developing reliable, profitable, and low-emission energy solutions that ought to reduce the intermittence of renewables and accelerate the decarbonization of industrial facilities.
Located at the Risø campus, to the west of Copenhagen, the new center will be housed on the premises of the DTU, which is recognized in particular for its advanced research into offshore wind energy. The creation of this center is expected to pave the way for synergies with TotalEnergies, which has already
established a global portfolio of offshore wind farms with total capacity of over 11 gigawatts (GW) (3/4 fixed and 1/4 floating).
The DTU-TotalEnergies Excellence Center of Clean Energy consists of three primary aspirations:
• | The construction of a next-generation hybrid electric platform. This pilot scheme at the Risø power plant aims to test different systems to optimize the production of wind energy with battery storage systems and the production of green hydrogen. The scientific data from the pilot scheme will then be used for research programs. | |
• | Multi-energy training for employees. Training is an essential driver for TotalEnergies’ successful transformation into a multi-energy company. The DTU aims to provide training for employees, with online masterclasses and specially designed courses on electricity and clean energy. | |
• | Research partnerships. TotalEnergies plans to have its own researchers and engineers work with the DTU's teaching staff, researchers, and students on research programs for the joint development of technological solutions, with a focus on next-generation wind technologies and floating wind farms. |
Belgium: TotalEnergies selected to install 4,400 EV charging stations for electric vehicles in Flanders
On August 31, 2022, TotalEnergies announced that, on the recommendation of the Department of Mobility and Public Works of the Flemish Region, the Flemish government tasked TotalEnergies with the installation and commercial operation of a charging service for electric vehicles in the West Flanders (Westhoek, Kortrijk and Bruges) and Flemish Brabant (Brussels Periphery, Leuven) regions. TotalEnergies intends to install up to 4,400 public charge points over the next two years. The new 22 kilovolt-ampere (kVA) charging stations are expected to be operated under the TotalEnergies brand for a period of twelve years and are meant to be supplied with 100% renewable electricity generated by offshore wind power in the North Sea off the coast of Belgium.
In order to enable TotalEnergies and its various partners (Fluvius, road infrastructure managers, etc.) to more effectively process the requests for charge points’ installation users and local municipalities, the Department of Mobility and Public Works developed a collaborative internet platform that will make it possible to install charging stations as of September 2022. This concession is part of Flanders' many initiatives to promote the electrification of the vehicle fleet, including a target of 35,000 installed charge points by 2025.
TotalEnergies is also developing an offer of High-Power Charging service (HPC - up to 350 kW) for major roads and motorways at its service stations and is proposing to install charge points across the country for professionals and individuals to whom it supplies electricity.
Norway: Northern Lights project signs commercial agreement on cross-border CO2 transport and storage
On August 29, 2022, TotalEnergies announced the signature of a commercial agreement between Northern Lights and Yara to transport and store CO2 captured from Yara Sluiskil, an ammonia and fertilizer plant in the Netherlands.
From early 2025, an estimated 800,000 tons of CO2 per year is expected to be captured, compressed, and liquefied in the Netherlands and then transported to the Northern Lights site to be permanently stored in geological layers approximately 2,600 meters under the seabed off the coast of Øygarden, in Norway.
This agreement is expected to be a major milestone in the decarbonization of heavy industry in Europe, aiming to pave the way for international CO2 transport and storage as a service. It intends to set a new standard for European industrial companies looking to use Northern Lights solutions as part of their decarbonization strategies.
Russia
On July 18, 2022, TotalEnergies agreed to sell to Novatek TotalEnergies' 49% interest in Terneftegaz, which operates the Termokarstovoye gas and condensates field in Russia, in economic terms enabling TotalEnergies to recover the outstanding amounts invested in the field. TotalEnergies has been a minority shareholder (49% interest) of Terneftegaz since December 2009 alongside Novatek (51% interest). Novatek is a non-State-owned Russian company that has partnered with TotalEnergies on several projects and in which TotalEnergies holds a minority 19.4% interest. TotalEnergies does not operate Terneftegaz's facilities. They are operated by Novatek staff within Terneftegaz. Terneftegaz self-finances its operations. TotalEnergies SE has not provided any capital to Terneftegaz since 2015 and it has not received any dividend from Terneftegaz since February 2022.
All of the gas condensate produced by Terneftegaz is sold to Novatek, in accordance with the contracts put in place since the beginning of the project. Novatek uses these condensates, along with crude and condensate from its other sources, to supply a wholly-owned refinery, the output of which it sells independently. TotalEnergies does not take part in Novatek's decisions concerning the processing and sale of condensate.
Under the Terneftegaz framework agreements, all gas and liquids produced are sold to Novatek, an independent non-State-owned company. These products are entered into Novatek's general input stream and are processed and sold together with its other oil and condensate output. Terneftegaz's production represents 7% of Novatek's marketed volume. Novatek refines all of its liquid feedstock (including gas condensate) in a refinery it owns in Russia to make fuel that it sells on the Russian market. TotalEnergies has neither information on nor control over the sales made independently by Novatek on the Russian market.
Pursuant to Russian regulations, a request to authorize this transaction was addressed to the Russian authorities on August 8, 2022. On August 25, 2022, Russian authorities issued their agreement to the proposed sale. As a result, on August 26, 2022, TotalEnergies and Novatek signed the final sale and purchase agreement of TotalEnergies’ 49% interest in Terneftegaz. Closing happened in September 2022, subject to customary conditions.
Terneftegaz's gas condensate is a co-product of natural gas production. Since the divestment of its stake in the Kharyaga oil field, TotalEnergies' interests in Russia have mainly focused on the production of liquefied natural gas for export via Yamal LNG. These activities are not targeted by European sanctions.
TotalEnergies has three long-term contracts for the purchase of liquefied natural gas. Two were signed between TotalEnergies and Yamal LNG, a non-State-owned company held by Novatek, itself an independent non-State-owned company, PetroChina and TotalEnergies. The third was signed between TotalEnergies and Novatek. The Russian authorities are not a party to these contracts.
The force majeure clauses that are usually included in contracts apply when exceptional events arise, such as a war or economic sanctions, and when these events directly affect the obligations of the parties to the contract. As things stand today, with the situation created by the war conducted by Russia in Ukraine and the absence of sanctions by the European Union, neither Yamal LNG's obligations as seller nor TotalEnergies' obligations as buyer are directly affected since Yamal LNG is still able to produce LNG and TotalEnergies is not legally barred from buying it.
On July 6, 2022, in line with its principles of conduct for Russian related business published in March 2022, TotalEnergies announced the sale of its remaining 20% interest in the Kharyaga oil project to Zarubezhneft. This transfer was finalized on August 3, 2022.
Australia: TotalEnergies, INPEX and Woodside joined forces to develop a major offshore CO2 sequestration project
On August 24, 2022, TotalEnergies announced that the Bonaparte CCS Assessment joint venture between TotalEnergies (26%), INPEX (53%, Operator) and Woodside (21%) was awarded a Greenhouse Gas Storage Assessment Permit, off the northwest coast of Australia, to carry out evaluation and appraisal work on block G-7-AP, which is considered a promising area for geological storage of CO2 . Appraisal work is expected to begin in 2023.
In aiming to enable permanent CO2 sequestration in the region, this project complements existing solutions to avoid and reduce greenhouse gas emissions from Ichthys LNG, a nearby natural gas
liquefaction and export terminal of which TotalEnergies (26%) is a founding partner. The project’s objective is also consistent with TotalEnergies' initiatives intended to promote and develop CCS (carbon capture and storage).
Scotland: First power generation at one of Scotland’s largest offshore wind farms
On August 23, 2022, TotalEnergies and its partner SSE Renewables announced the first power generation from the Seagreen offshore wind farm, 27 km off the coast of Angus in Scotland.
The first turbine of a total of 114, was commissioned in the early hours of Monday morning. The aim is for the 1,075 megawatts (MW) farm to be fully operational by the first half of 2023. The $4.3 billion Seagreen project will be one of Scotland’s largest offshore wind farms and one of the world’s deepest fixed bottom wind farms, as it is being developed in 59 meters of water depth.
TotalEnergies entered into an agreement with SSE Renewables to acquire a 51% stake in the Seagreen project in June 2020. Seagreen has a capacity of 1,075 MW.
When fully operational, the site is expected to produce around 5 terawatt hours (TWh) of renewable electricity per year, enough to power an estimated equivalent of 1.6 million households.
Cyprus: Offshore gas discovery in Block 6
On August 22, 2022, TotalEnergies announced that TotalEnergies and Eni (operator) made a gas discovery at the Cronos-1 well, in Block 6, offshore Cyprus. This discovery follows the Calypso1 discovery made on the same Block in 2018.
Located at approximately 160 km southwest of the Cyprus coast, Cronos-1 encountered several carbonate reservoir intervals.
The drilling of another exploration well on Block 6 is planned, in order to investigate significant additional resource upside and to evaluate the best development options.
TotalEnergies holds a 50% interest in Block 6, where Eni is the operator (50%). In Cyprus, TotalEnergies is also present in offshore Block 11 (50%, operator), 7 (50%, operator), 2 (20%), 3 (30%), 8 (40%) and 9 (20%).
Floating Offshore Wind in France: TotalEnergies, Corio Generation and Qair join forces to bid for Mediterranean tender
On August 3, 2022, TotalEnergies announced that a consortium of TotalEnergies, Corio Generation and Qair had been pre-selected by the French Directorate General for Energy and Climate (DGEC) to participate in a competitive tender to develop two floating windfarms in the Mediterranean Sea.
The two projects of about 250 MW each could supply enough clean energy to meet the annual electricity consumption of almost one million people.
The partners intend to support the development of a local Mediterranean industrial value chain for offshore wind power. To this end, the consortium plans to consult regional stakeholders, promote the local economy and ensure communities benefit from employment opportunities.
TotalEnergies and ADNOC partner in fuel distribution in Egypt
On July 29, 2022, TotalEnergies announced that the partnership between TotalEnergies and ADNOC was further strengthened following the signing by ADNOC Distribution of an agreement to acquire a 50% stake in TotalEnergies Marketing Egypt LLC for a consideration of approximately $200 million. This new transaction follows the signing of the strategic partnership agreement signed by TotalEnergies and ADNOC on the occasion of the state visit in Paris of His Highness Sheikh, Mohamed bin Zayed Al Nahyan, President of the United Arab Emirates.
Established in 1998, TotalEnergies Egypt operates about 7% of service stations in Egypt. The contemplated partnership between TotalEnergies and ADNOC Distribution includes a portfolio
comprising 240 fuel retail stations, as well as wholesale fuel activities, an aviation fuel business, and lubricants sales.
The acquisition is expected to be completed in the first quarter 2023, pending satisfaction of certain conditions, including customary regulatory approvals.
Angola: TotalEnergies rolls out its multi-energy strategy by launching three projects in oil, gas and solar energy
On July 28, 2022, as part of the rollout of its multi-energy strategy in Angola, TotalEnergies announced the launch of the Begonia oil field, and Quiluma and Maboqueiro gas fields developments, as well as its first photovoltaic project in the country, with an estimated capacity of 35 megawatts peak (MWp) and the possibility of adding 45 MWp in a second phase.
Begonia, the first development on Block 17/06
TotalEnergies announced the final investment decision for Begonia, the first development of block 17/06, located 150 km off the Angolan coast, in agreement with concession holder Agência Nacional de Petróleo, Gás e Biocombustíveis (ANPG) and its partners on Block 17/06. The Begonia development consists of five wells tied back to the Pazflor FPSO (floating production, storage and offloading unit), already in operation on Block 17. After commissioning, expected in late 2024, it is expected to add 30,000 barrels a day to the FPSO's production.
After CLOV Phase 3, another satellite project that produces 30,000 barrels a day and was launched on Block 17 in June 2022, Begonia is the second TotalEnergies-operated project in Angola to use a standardized subsea production system, and is estimated to save up to 20% on costs and to shorten lead times for equipment delivery.
The project represents an investment of $850 million and 1.3 million man-hours of work, 70% of which is expected to be carried out in Angola.
Quiluma and Maboqueiro, Angola's first non-associated natural gas projects
TotalEnergies also announced the final investment decision for the “Non-Associated Gas 1” (NAG1) project, in which the Company holds an 11.8% interest alongside its partners, Eni (operator with 25.6%), Chevron (31%), Sonangol P&P (19.8%) and bp (11.8%).
NAG1 is one of the first non-associated natural gas projects developed in Angola. Gas produced from the Quiluma and Maboqueiro offshore fields is expected to supply the Angola LNG plant, with the aim of improving Angola's LNG production capacity and the availability of domestic gas for the country's industrial development. Production is scheduled to start in mid-2026.
Quilemba, Angola's first TotalEnergies solar plant
TotalEnergies, alongside the Ministry of Energy and Water and its partners Sonangol and Greentech, was also awarded by the Angolan authorities the concession for the construction of the Quilemba photovoltaic plant, with an estimated initial capacity of 35 MWp and the possibility of adding 45 MWp in a second phase. The plant will be located in the southern city of Lubango and should come on stream at the end of 2023. It is expected to contribute to the decarbonization of Angola’s energy mix and, through a fixed-price Power Purchase Agreement (PPA), deliver significant savings for the Angolan government compared to the fuel used in existing power plants. TotalEnergies holds a 51% interest in Quilemba solar, alongside affiliates of Sonangol EP (30%), and Angola Environment Technology (Greentech, 19%).
FORWARD-LOOKING STATEMENTS
This document may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, notably with respect to the financial condition, results of operations, business activities and industrial strategy of TotalEnergies. This document may also contain statements regarding the perspectives, objectives, areas of improvement and goals of TotalEnergies, including with respect to climate change and carbon neutrality (net zero emissions). An ambition expresses an outcome desired by TotalEnergies, it being specified that the means to be deployed do not depend solely on TotalEnergies. 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, TotalEnergies 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, you should read the information set forth under “Item 3. -3.1 Risk Factors”, “Item 4. Information on the Company”, “Item 5. Operating and Financial Review and Prospects” and “Item 11. Quantitative and Qualitative Disclosures about Market Risk” in TotalEnergies’ Form 20-F for the year ended December 31, 2021.
Exhibit 99.3
CAPITALIZATION AND INDEBTEDNESS OF TOTALENERGIES
(unaudited)
The following table sets out the unaudited consolidated capitalization and long-term indebtedness, as well as short-term indebtedness, of TotalEnergies SE and the consolidated entities directly or indirectly controlled by TotalEnergies SE (collectively, “TotalEnergies”) as of September 30, 2022, prepared on the basis of IFRS. Currency amounts are expressed in U.S. dollars (“dollars” or “$”) or in euros (“euros” or “€”).
At September 30, | |||
2022 | |||
(in millions of dollars) | |||
Current financial debt, including current portion of non-current financial debt | |||
Current portion of non-current financial debt | 6,629 | ||
Current financial debt | 10,294 | ||
Current portion of financial instruments for interest rate swaps liabilities | 469 | ||
Other current financial instruments — liabilities | 392 | ||
Financial liabilities directly associated with assets held for sale | 10 | ||
Total current financial debt | 17,794 | ||
Non-current financial debt | 44,899 | ||
Non-controlling interests | 2,851 | ||
Shareholders’ equity | |||
Common shares | 8,163 | ||
Paid-in surplus and retained earnings | 131,382 | ||
Currency translation adjustment | (16,720 | ) | |
Treasury shares | (5,004 | ) | |
Total shareholders’ equity — TotalEnergies share | 117,821 | ||
Total capitalization and non-current indebtedness | 165,571 |
As of September 30, 2022, TotalEnergies SE had an authorized share capital of 3,664,966,081 ordinary shares with a par value of €2.50 per share, and an issued share capital of 2,619,131,285 ordinary shares, of which 94,357,781 treasury shares. For more information on the delegations of authority and powers granted to the Board of Directors with respect to share capital increases and authorization for share cancellation, see Exhibit 15.1 (section 4.4.2, chapter 4) to the Annual Report on Form 20-F for the year ended December 31, 2021, filed with the Securities and Exchange Commission on March 25, 2022.
As of September 30, 2022, approximately $7,428 million of TotalEnergies’ non-current financial debt was secured and $37,471 million was unsecured, and all of TotalEnergies’ current financial debt of $17,794 million was unsecured. As of September 30, 2022, TotalEnergies had no outstanding guarantees from third parties relating to its consolidated indebtedness.
For more information about TotalEnergies’ off-balance sheet commitments and contingencies, see Note 13.1 of the Notes to TotalEnergies’ audited Consolidated Financial Statements in its Annual Report on Form 20-F for the year ended December 31, 2021, filed with the Securities and Exchange Commission on March 25, 2022.
Except as disclosed herein, there have been no material changes in the consolidated capitalization, indebtedness and contingent liabilities of TotalEnergies since September 30, 2022.